Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 28, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | Atomera Inc | |
Entity Central Index Key | 0001420520 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity's Reporting Status Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 17,116,654 | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2019 | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Transition Period | true | |
Interactive Data Current | Yes | |
Entity Incorporation State Country Code | DE | |
Entity File Number | 001-37850 |
Condensed Balance Sheets (Unaud
Condensed Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current Assets: | ||
Cash and cash equivalents | $ 16,800 | $ 18,933 |
Accounts receivable | 187 | 185 |
Prepaid expenses and other current assets | 179 | 170 |
Total current assets | 17,166 | 19,288 |
Property and equipment, net | 74 | 56 |
Operating lease right-of-use asset | 196 | 0 |
Security deposit | 13 | 13 |
Total assets | 17,449 | 19,357 |
Current liabilities: | ||
Accounts payable | 205 | 348 |
Accrued expenses | 266 | 224 |
Accrued payroll related expenses | 622 | 984 |
Current operating lease liability | 147 | 0 |
Deferred revenue | 0 | 55 |
Total current liabilities | 1,240 | 1,611 |
Long term operating lease liability | 40 | 0 |
Total Liabilities | 1,280 | 1,611 |
Commitments and contingencies (see Note 8) | ||
Stockholders' equity: | ||
Preferred stock, $0.001 par value, authorized 2,500 shares; none issued and outstanding at September 30, 2019 and December 31, 2018. | 0 | 0 |
Common stock, $0.001 par value, authorized 47,500 shares; 17,074 and 15,034 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively. | 17 | 15 |
Additional paid-in capital | 148,368 | 139,693 |
Accumulated deficit | (132,216) | (121,962) |
Total stockholders' equity | 16,169 | 17,746 |
Total liabilities and stockholders' equity | $ 17,449 | $ 19,357 |
Condensed Balance Sheets (Una_2
Condensed Balance Sheets (Unaudited) (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Preferred stock, authorized | 2,500 | 2,500 |
Preferred stock, issued | 0 | 0 |
Preferred stock, outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, authorized | 47,500 | 47,500 |
Common stock, issued | 17,074 | 15,034 |
Common stock, oustanding | 17,074 | 15,034 |
Condensed Statements of Operati
Condensed Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenue | $ 254 | $ 0 | $ 395 | $ 96 |
Cost of revenue | (204) | 0 | (224) | (113) |
Gross margin | 50 | 0 | 171 | (17) |
Operating Expenses: | ||||
Research and development | 1,746 | 1,922 | 5,930 | 5,350 |
General and administrative | 1,239 | 1,324 | 4,048 | 3,781 |
Selling and marketing | 240 | 237 | 712 | 695 |
Total operating expenses | 3,225 | 3,483 | 10,690 | 9,826 |
Loss from operations | (3,175) | (3,483) | (10,519) | (9,843) |
Other income: | ||||
Interest income | 89 | 48 | 265 | 145 |
Total other income | 89 | 48 | 265 | 145 |
Net loss | $ (3,086) | $ (3,435) | $ (10,254) | $ (9,698) |
Net loss per common share, basic and diluted | $ (0.19) | $ (0.28) | $ (0.66) | $ (0.80) |
Weighted average number of common shares outstanding, basic and diluted | 16,567 | 12,117 | 15,597 | 12,079 |
Statement of Stockholders' Equi
Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Beginning balance, shares at Dec. 31, 2017 | 12,161 | |||
Beginning balance, value at Dec. 31, 2017 | $ 12 | $ 125,911 | $ (109,065) | $ 16,858 |
Stock-based compensation, shares | 200 | |||
Stock-based compensation | 546 | 546 | ||
Net loss | (3,092) | (3,092) | ||
Ending balance, shares at Mar. 31, 2018 | 12,361 | |||
Ending balance, value at Mar. 31, 2018 | $ 12 | 126,457 | (112,157) | 14,312 |
Beginning balance, shares at Dec. 31, 2017 | 12,161 | |||
Beginning balance, value at Dec. 31, 2017 | $ 12 | 125,911 | (109,065) | 16,858 |
Net loss | (9,698) | |||
Ending balance, shares at Sep. 30, 2018 | 12,409 | |||
Ending balance, value at Sep. 30, 2018 | $ 12 | 127,708 | (118,763) | 8,957 |
Beginning balance, shares at Mar. 31, 2018 | 12,361 | |||
Beginning balance, value at Mar. 31, 2018 | $ 12 | 126,457 | (112,157) | 14,312 |
Stock-based compensation, shares | 48 | |||
Stock-based compensation | 621 | 621 | ||
Net loss | (3,171) | (3,171) | ||
Ending balance, shares at Jun. 30, 2018 | 12,409 | |||
Ending balance, value at Jun. 30, 2018 | $ 12 | 127,078 | (115,328) | 11,762 |
Stock-based compensation | 630 | 630 | ||
Net loss | (3,435) | (3,435) | ||
Ending balance, shares at Sep. 30, 2018 | 12,409 | |||
Ending balance, value at Sep. 30, 2018 | $ 12 | 127,708 | (118,763) | 8,957 |
Beginning balance, shares at Dec. 31, 2018 | 15,034 | |||
Beginning balance, value at Dec. 31, 2018 | $ 15 | 139,693 | (121,962) | 17,746 |
Stock-based compensation, shares | 298 | |||
Stock-based compensation | 694 | 694 | ||
Net loss | (3,534) | (3,534) | ||
Ending balance, shares at Mar. 31, 2019 | 15,332 | |||
Ending balance, value at Mar. 31, 2019 | $ 15 | 140,387 | (125,496) | 14,906 |
Beginning balance, shares at Dec. 31, 2018 | 15,034 | |||
Beginning balance, value at Dec. 31, 2018 | $ 15 | 139,693 | (121,962) | 17,746 |
Net loss | (10,254) | |||
Ending balance, shares at Sep. 30, 2019 | 17,074 | |||
Ending balance, value at Sep. 30, 2019 | $ 17 | 148,368 | (132,216) | 16,169 |
Beginning balance, shares at Mar. 31, 2019 | 15,332 | |||
Beginning balance, value at Mar. 31, 2019 | $ 15 | 140,387 | (125,496) | 14,906 |
Registered direct offering of common stock, net of commissions and other offering expenses, shares | 1,675 | |||
Registered direct offering of common stock, net of commissions and other offering expenses, value | $ 2 | 6,395 | 6,397 | |
Stock-based compensation, shares | 67 | |||
Stock-based compensation | 788 | 788 | ||
Net loss | (3,634) | (3,634) | ||
Ending balance, shares at Jun. 30, 2019 | 17,074 | |||
Ending balance, value at Jun. 30, 2019 | $ 17 | 147,570 | (129,130) | 18,457 |
Stock-based compensation | 798 | 798 | ||
Net loss | (3,086) | (3,086) | ||
Ending balance, shares at Sep. 30, 2019 | 17,074 | |||
Ending balance, value at Sep. 30, 2019 | $ 17 | $ 148,368 | $ (132,216) | $ 16,169 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net Loss | $ (10,254) | $ (9,698) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 33 | 24 |
Stock-based compensation | 2,280 | 1,796 |
Loss on disposal of equipment | 0 | 1 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (2) | 35 |
Prepaid expenses and other current assets | (22) | 21 |
Accounts payable | (143) | 141 |
Accrued expenses | 46 | 58 |
Accrued payroll expenses | (362) | 191 |
Deferred revenue | (55) | 75 |
Net cash used in operating activities | (8,479) | (7,356) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Acquisition of property and equipment | (51) | (21) |
Net cash used in investing activities | (51) | (21) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from registered direct offering of common stock, net | 6,397 | 0 |
Payment of offering costs | 0 | (35) |
Net cash provided by/ (used in) financing activities | 6,397 | (35) |
Net decrease in cash and cash equivalents | (2,133) | (7,412) |
Cash and cash equivalents at beginning of period | 18,933 | 17,369 |
Cash and cash equivalents at end of period | 16,800 | 9,957 |
Supplemental Information: | ||
Cash paid for interest | 0 | 0 |
Cash paid for taxes | 0 | 0 |
Non-cash financing activity: | ||
Accrued offering costs | $ 0 | $ 38 |
1. NATURE OF OPERATIONS
1. NATURE OF OPERATIONS | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
NATURE OF OPERATIONS | 1. NATURE OF OPERATIONS Atomera Incorporated (“Atomera” or the “Company”) was incorporated in the state of Delaware in March 2007 under the name MEARS Technologies, Inc. and is engaged in the development, commercialization and licensing of proprietary processes and technologies for the semiconductor industry. On January 12, 2016, the Company changed its name to Atomera Incorporated. The Company is in the development stage, having only recently begun limited revenue-generating activities, and is devoting substantially all of its efforts toward technology research and development and to obtaining initial customers. The Company has primarily financed operations through private placements of equity and debt securities and the Company’s Initial Public Offering (the “IPO”) which was consummated on August 10, 2016, its underwritten public offering of common stock consummated on October 15, 2018 and a registered direct offering of common stock consummated on May 30, 2019. |
2. LIQUIDITY AND MANAGEMENT PLA
2. LIQUIDITY AND MANAGEMENT PLANS | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
LIQUIDITY AND MANAGEMENT PLANS | 2. LIQUIDITY AND MANAGEMENT PLANS At September 30, 2019, the Company had cash and cash equivalents of approximately $16.8 million and working capital of approximately $15.9 million. The Company has only generated limited revenues since inception and has incurred recurring operating losses. At September 30, 2019, the Company had an accumulated deficit of approximately $132.2 million. The Company’s operating plans for the next 12 months include increased research and development headcount and increased spending on outsourced fabrication and testing. Based on the funds it has available as of the date of the filing of this report, the Company believes that it has sufficient capital to fund its current business plans and obligations over, at least, 12 months from the date that these financial statements have been issued. However, as the Company has generated only limited revenue from its principal operations, it is subject to all the risks inherent in the initial organization, financing, expenditures, complications and delays in a new business. Accordingly, the Company may require additional capital, the receipt of which cannot be assured. In the event the Company requires additional capital, there can be no guarantee that funds will be available on commercially reasonable terms, if at all. |
3. SUMMARY OF SIGNIFICANT ACCOU
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Significant accounting policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 11, 2019 except those noted below under the caption “Adoption of recent accounting standards”. Basis of presentation of unaudited condensed financial information The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2019 and 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2018 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2019. These financial statements should be read in conjunction with that report. Adoption of recent accounting standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2016-02, Leases (Topic 842) Leases In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
4. REVENUE
4. REVENUE | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE | 4. REVENUE The Company recognizes revenue when it satisfies a performance obligation by transferring the product or service to the customer, either at a point in time or over time. The Company usually recognizes revenue from integration service agreements at a point in time and integration license agreements over a period of time. Disaggregation of revenue: The following table provides information about disaggregated revenue by primary geographical markets and timing of revenue recognition for the three and nine months ended September 30, 2019 (in thousands): Integration Services Three Months Ended Nine Months Ended Primary geographic markets North America $ 50 $ 50 Europe 104 187 Asia Pacific 100 158 Total $ 254 $ 395 Timing of revenue recognition Products and services transferred at a point in time $ 222 $ 240 Products and services transferred over time 32 155 Total $ 254 $ 395 Unbilled contracts receivable and deferred revenue : Timing of revenue recognition may differ from the timing of invoicing customers. Accounts receivable includes amounts billed and currently due from customers. Unbilled contracts receivable represents unbilled amounts expected to be received from customers in future periods, where the revenue recognized to date exceeds the amount billed, and the right to receive payment is subject to the underlying contractual terms. Unbilled contracts receivable amounts may not exceed their net realizable value and are classified as long-term assets if the payments are expected to be received more than one year from the reporting date. The Company records deferred revenue when revenue will be recognized after invoicing. During the three and nine months ended September 30, 2019, the Company recognized approximately $16,000 and $55,000, respectively, of revenue that was included in deferred revenue as of December 31, 2018. |
5. BASIC AND DILUTED LOSS PER S
5. BASIC AND DILUTED LOSS PER SHARE | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
BASIC AND DILUTED LOSS PER SHARE | 5. BASIC AND DILUTED LOSS PER SHARE Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares outstanding for the period. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the sum of the weighted average number of shares of common stock outstanding and the dilutive common stock equivalent shares outstanding during the period. The Company’s potentially dilutive common stock equivalent shares, which include incremental common shares issuable upon (i) the exercise of outstanding stock options and warrants and (ii) vesting of restricted stock units and restricted stock awards, are only included in the calculation of diluted net loss per share when their effect is dilutive. Since the Company has had net losses for all periods presented, all potentially dilutive securities are anti-dilutive. Accordingly, basic and diluted net loss per share are equal. The following potential common stock equivalents were not included in the calculation of diluted net loss per common share because the inclusion thereof would be anti-dilutive (in thousands): Three and Nine Months Ended September 30, 2019 2018 Stock Options 2,935 2,477 Unvested restricted stock 480 276 Warrants 765 765 Total 4,180 3,518 |
6. LEASES
6. LEASES | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 6. LEASES The Company leases corporate office space in Los Gatos, California. This lease has a remaining term of 16 months as of September 30, 2019. This lease is accounted for under ASC Topic 842 and as a result, the most significant impact was the recognition of the operating lease right-of-use assets and the liability for operating leases. Upon adoption the Company recorded an operating lease right-of-use asset and the related lease liability. The lease liability is based on the present value of the remaining minimum lease payments, discounted using the Company’s estimated incremental borrowing rate of 10% at the effective date of January 1, 2019. As permitted under ASC Topic 842, the Company elected several practical expedients that permit it to not reassess (1) whether a contract is or contains a lease, (2) the classification of existing leases, and (3) whether previously capitalized costs continue to qualify as initial indirect costs. The impact of the adoption of ASC Topic 842 on the balance sheet at January 1, 2019 was (in thousands): As reported December 31, 2018 Adoption of ASC Topic 842 Balance January 1, 2019 Prepaid expenses and other current assets $ 170 $ (13 ) $ 157 Operating lease of right-of-use assets $ – $ 295 $ 295 Total assets $ 19,357 $ 282 $ 19,639 Other current liabilities $ 1,611 $ 129 $ 1,740 Long-term liabilities operating leases $ – $ 153 $ 153 Total liabilities $ 1,611 $ 282 $ 1,893 The current lease accounted for under ASC Topic 842 contains escalating payments on the anniversary of the commencement. These additional lease components are included in the measurement of the initial lease liability. Additional payments based on a change in the Company’s share of the operating expenses, including real estate taxes and insurance, are recorded as a period expense when incurred. Lease modifications result in remeasurement of the lease liability. Lease expense for operating leases consists of the lease payments plus any initial direct costs, primarily brokerage commissions, and is recognized on a straight-line basis over the lease term. Future minimum payments under non-cancellable leases as of September 30, 2019 were as follows (in thousands): For the Year Ended December 31, Amount Remaining 2019 $ 27 2020 165 2021 14 Total future minimum lease payments 206 Less imputed interest (19 ) Total lease liability $ 187 The below table provides supplemental information and non-cash activity related to the Company’s operating leases are as follows (in thousands): Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 40 $ 120 Non-cash activity: Right-of-use assets obtained in exchange for the lease obligations (1) $ – $ 295 _________________________ (1) Represents the initial right-of-use asset valuation of the Los Gatos lease on January 1, 2019 In October 2016, the Company entered into lease agreement for approximately 200 square feet of office space in Cambridge, Massachusetts. The lease, with monthly payments of $2,074 per month, commenced on October 24, 2016. The lease rate increased to $2,619 on January 1, 2019 and will increase to $2,942 on January 1, 2020. Because the lease is month to month and can be cancelled with a 30-day notice, the future lease payments are not included in the Company’s lease accounting under ASC Topic 842. |
7. STOCK BASED COMPENSATION
7. STOCK BASED COMPENSATION | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
STOCK BASED COMPENSATION | 7. STOCK BASED COMPENSATION In May 2017, the Company’s shareholders approved its 2017 Stock Incentive Plan (“2017 Plan”) after its 2007 Stock Incentive Plan (“2007 Plan”) had expired in March 2017. The 2017 Plan provides for the grant of non-qualified stock options and incentive stock options to purchase shares of the Company’s common stock and for the grant of restricted and unrestricted shares. The 2017 Plan provides for the issuance of 3,750,000 shares of common stock. All of the Company’s employees and any subsidiary employees (including officers and directors who are also employees), as well as all of the Company’s nonemployee directors and other consultants, advisors and other persons who provide services to the Company are eligible to receive incentive awards under the 2017 Plan. Generally, stock options and restricted stock vest over a one to four-year period from the date of grant under the 2017 Plan. The following table summarizes the stock-based compensation expense recorded in the Company’s results of operations during the three and nine months ended September 30, 2019 and 2018 for stock options and restricted stock granted under the 2017 Plan and the 2007 Plan (in thousands): Three Months Ended Nine Months Ended 2019 2018 2019 2018 Research and development $ 223 $ 149 $ 622 $ 409 General and administrative 541 449 1,557 1,291 Selling and Marketing 34 32 101 96 $ 798 $ 630 $ 2,280 $ 1,796 As September 30, 2019, there was approximately $4.6 million of total unrecognized compensation expense related to unvested share-based compensation arrangements that are expected to vest. This cost is expected to be recognized over a weighted-average period of 2.5 years. The weighted average grant date fair value per share of the options granted under the Company’s 2017 Plan was $2.50 and $3.63 for the nine months ended September 30, 2019 and 2018, respectively. The following table summarizes stock option activity during the nine months ended September 30, 2019 (in thousands except exercise prices and contractual terms): Number of Shares Weighted- Average Exercise Prices Weighted- Remaining Contractual Term (In Years) Intrinsic Outstanding at January 1, 2019 2,477 $ 6.81 – Granted 458 $ 3.90 – Outstanding at September 30, 2019 2,935 $ 6.36 7.18 $ – Exercisable at September 30, 2019 2,023 $ 6.84 6.61 $ – During the nine months ended September 30, 2019 the Company granted options under the 2017 Plan to purchase approximately 458,000 shares of its common stock to its employees. The fair value of these options was approximately $1.1 million at the time of grant. The Company issues restricted stock to employees, directors and consultants and estimates the fair value based on the closing price on the day of grant. The following table summarizes all restricted stock activity during the nine months ended September 30, 2019 (in thousands except per share data): Number of Shares Weighted- Average Grant Date Outstanding at January 1, 2019 258 $ 6.04 Granted 365 $ 3.95 Vested (143 ) $ 5.50 Outstanding non-vested shares at September 30, 2019 480 $ 4.61 During the nine months ended September 30, 2019 the Company granted approximately 365,000 restricted stock awards under the 2017 Plan to its employees and directors. The fair value of these awards was approximately $1.4 million at the time of grant. |
8. COMMITMENTS AND CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | 8. COMMITMENTS AND CONTINGENCIES Litigation, Claims and Assessments The Company may be subject to periodic lawsuits, investigations and claims that arise in the ordinary course of business. The Company is not party to any material litigation as of September 30, 2019, or through the date these financial statements have been issued. |
9. SUBSEQUENT EVENTS
9. SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | 9. SUBSEQUENT EVENTS Management has evaluated subsequent events and transactions through the date these financial statements were issued. On October 9, 2019, the Company entered into an agreement to lease a tool for use in the development of the Company’s technology. The lease is for five years at $150,000 per month. The lease commencement date is anticipated to be March 1, 2020. |
3. SUMMARY OF SIGNIFICANT ACC_2
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation of unaudited condensed financial information | Basis of presentation of unaudited condensed financial information The unaudited condensed financial statements of the Company for the three and nine months ended September 30, 2019 and 2018 have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for the fair presentation of the Company’s financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2018 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the SEC on March 11, 2019. These financial statements should be read in conjunction with that report. |
Adoption of recent accounting standards | Adoption of recent accounting standards In February 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No 2016-02, Leases (Topic 842) Leases In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting |
4. REVENUE (Tables)
4. REVENUE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue by geographical region | Integration Services Three Months Ended Nine Months Ended Primary geographic markets North America $ 50 $ 50 Europe 104 187 Asia Pacific 100 158 Total $ 254 $ 395 Timing of revenue recognition Products and services transferred at a point in time $ 222 $ 240 Products and services transferred over time 32 155 Total $ 254 $ 395 |
5. BASIC AND DILUTED LOSS PER_2
5. BASIC AND DILUTED LOSS PER SHARE (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of potential common stock equivalents not included in the calculation of diluted net loss per common share | Three and Nine Months Ended September 30, 2019 2018 Stock Options 2,935 2,477 Unvested restricted stock 480 276 Warrants 765 765 Total 4,180 3,518 |
6. LEASES (Tables)
6. LEASES (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Impact of ASC Topic 842 | As reported December 31, 2018 Adoption of ASC Topic 842 Balance January 1, 2019 Prepaid expenses and other current assets $ 170 $ (13 ) $ 157 Operating lease of right-of-use assets $ – $ 295 $ 295 Total assets $ 19,357 $ 282 $ 19,639 Other current liabilities $ 1,611 $ 129 $ 1,740 Long-term liabilities operating leases $ – $ 153 $ 153 Total liabilities $ 1,611 $ 282 $ 1,893 |
Schedule of future minimum lease payments | For the Year Ended December 31, Amount Remaining 2019 $ 27 2020 165 2021 14 Total future minimum lease payments 206 Less imputed interest (19 ) Total lease liability $ 187 |
Supplemental non-cash actiity related to operating leases | Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Operating cash flow information: Cash paid for amounts included in the measurement of lease liabilities $ 40 $ 120 Non-cash activity: Right-of-use assets obtained in exchange for the lease obligations (1) $ – $ 295 _________________________ (1) Represents the initial right-of-use asset valuation of the Los Gatos lease on January 1, 2019 |
7. STOCK BASED COMPENSATION (Ta
7. STOCK BASED COMPENSATION (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of stock-based compensation expense | Three Months Ended Nine Months Ended 2019 2018 2019 2018 Research and development $ 223 $ 149 $ 622 $ 409 General and administrative 541 449 1,557 1,291 Selling and Marketing 34 32 101 96 $ 798 $ 630 $ 2,280 $ 1,796 |
Schedule of stock option activity | Number of Shares Weighted- Average Exercise Prices Weighted- Remaining Contractual Term (In Years) Intrinsic Outstanding at January 1, 2019 2,477 $ 6.81 – Granted 458 $ 3.90 – Outstanding at September 30, 2019 2,935 $ 6.36 7.18 $ – Exercisable at September 30, 2019 2,023 $ 6.84 6.61 $ – |
Schedule of restricted stock option activity | Number of Shares Weighted- Average Grant Date Outstanding at January 1, 2019 258 $ 6.04 Granted 365 $ 3.95 Vested (143 ) $ 5.50 Outstanding non-vested shares at September 30, 2019 480 $ 4.61 |
2. LIQUIDITY AND MANAGEMENT P_2
2. LIQUIDITY AND MANAGEMENT PLANS (Details Narrative) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 16,800 | $ 18,933 | $ 9,957 | $ 17,369 |
Working capital | 15,900 | |||
Accumulated deficit | $ (132,216) | $ (121,962) |
4. REVENUE (Details)
4. REVENUE (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenue | $ 254 | $ 0 | $ 395 | $ 96 |
Transferred at Point in Time [Member] | ||||
Revenue | 222 | 240 | ||
Transferred Over Time [Member] | ||||
Revenue | 32 | 155 | ||
North America [Member] | ||||
Revenue | 50 | 50 | ||
Europe [Member] | ||||
Revenue | 104 | 187 | ||
Asia Pacific [Member] | ||||
Revenue | $ 100 | $ 158 |
4. REVENUE (Details Narrative)
4. REVENUE (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue recognized that was previously included in deferred revenue | $ 16 | $ 55 |
5. BASIC AND DILUTED LOSS PER_3
5. BASIC AND DILUTED LOSS PER SHARE (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Potential common stock equivalents | 4,180 | 3,518 | 4,180 | 3,518 |
Stock Options [Member] | ||||
Potential common stock equivalents | 2,935 | 2,477 | 2,935 | 2,477 |
Unvested Restricted Stock [Member] | ||||
Potential common stock equivalents | 480 | 276 | 480 | 276 |
Warrants [Member] | ||||
Potential common stock equivalents | 765 | 765 | 765 | 765 |
6. LEASES (Details - Adoption o
6. LEASES (Details - Adoption of ASC 842) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Prepaid expenses and other current assets | $ 179 | $ 170 | |
Operating lease of right-of-use assets | 196 | 0 | |
Total assets | 17,449 | 19,357 | |
Other current liabilities | 1,611 | ||
Long-term liabilities operating leases | 40 | 0 | |
Total liabilities | $ 1,280 | 1,611 | |
Balance January 1, 2019 [Member] | |||
Prepaid expenses and other current assets | $ 157 | ||
Operating lease of right-of-use assets | 295 | ||
Total assets | 19,639 | ||
Other current liabilities | 1,740 | ||
Long-term liabilities operating leases | 153 | ||
Total liabilities | $ 1,893 | ||
Adoption of ASC Topic 842 [Member] | |||
Prepaid expenses and other current assets | (13) | ||
Operating lease of right-of-use assets | 295 | ||
Total assets | 282 | ||
Other current liabilities | 129 | ||
Long-term liabilities operating leases | 153 | ||
Total liabilities | $ 282 |
6. LEASES (Details - Minimum le
6. LEASES (Details - Minimum lease payments) $ in Thousands | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Remaining period in 2019 | $ 27 |
2020 | 165 |
2021 | 14 |
Total future minimum payments due | 206 |
Less imputed interest | (19) |
Total lease liability | $ 187 |
6. LEASES (Details - Cash flow
6. LEASES (Details - Cash flow effect) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2019 | |
Operating cash flow information: | ||
Cash paid for amounts included in the measurement of lease liabilities | $ 40 | $ 120 |
Non-cash activity: | ||
Right-of-use assets obtained in exchange for the lease obligations | $ 0 | $ 295 |
6. LEASES (Details Narrative)
6. LEASES (Details Narrative) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)ft² | |
Leases Details Narrative Abstract | |
Lease office space | ft² | 200 |
Monthly payments | $ | $ 2,619 |
Option to terminate lease | Cancelled with a 30-day notice |
Incremental borrowing rate | 10.00% |
7. STOCK BASED COMPENSATION (De
7. STOCK BASED COMPENSATION (Details - Compensation Expense) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Allocated stock-based compensation | $ 798 | $ 630 | $ 2,280 | $ 1,796 |
Research and Development [Member] | ||||
Allocated stock-based compensation | 223 | 149 | 622 | 409 |
General and Administrative [Member] | ||||
Allocated stock-based compensation | 541 | 449 | 1,557 | 1,291 |
Selling and Marketing [Member] | ||||
Allocated stock-based compensation | $ 34 | $ 32 | $ 101 | $ 96 |
7. STOCK BASED COMPENSATION (_2
7. STOCK BASED COMPENSATION (Details - Stock Option Activity) - Options [Member] $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Options outstanding, beginning balance | shares | 2,477 |
Options granted | shares | 458 |
Options outstanding, ending balance | shares | 2,935 |
Options exercisable | shares | 2,023 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Prices [Roll Forward] | |
Weighted average exercise price, options outstanding beginning balance | $ / shares | $ 6.81 |
Weighted average exercise price, options granted | $ / shares | 3.90 |
Weighted average exercise price, options outstanding, ending balance | $ / shares | 6.36 |
Weighted average exercise price, options exercisable | $ / shares | $ 6.84 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Weighted-Average Remaining Contractual Term [Roll Forward] | |
Weighted average remaining contractual term, options outstanding | 7 years 2 months 5 days |
Weighted average remaining contractual term, options exercisable | 6 years 7 months 10 days |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Roll Forward] | |
Intrinsic value, options outstanding ending balance | $ | $ 0 |
Intrinsic value, options exercisable | $ | $ 0 |
7. STOCK BASED COMPENSATION (_3
7. STOCK BASED COMPENSATION (Details - Restricted stock) - Restricted Stock [Member] shares in Thousands | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Number of shares | |
Restricted stock outstanding, beginning balance | shares | 258 |
Restricted stock granted | shares | 365 |
Restricted stock vested | shares | (143) |
Restricted stock outstanding, ending balance | shares | 480 |
Weighted-Average Grant Date Fair Value | |
Restricted stock outstanding, beginning balance | $ / shares | $ 6.04 |
Restricted stock granted | $ / shares | 3.95 |
Restricted stock vested | $ / shares | 5.50 |
Restricted stock outstanding, ending balance | $ / shares | $ 4.61 |
7. STOCK BASED COMPENSATION (_4
7. STOCK BASED COMPENSATION (Details Narrative) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
2017 Plan [Member] | ||
Shares authorized for issuance | 3,750 | |
Restricted Stock [Member] | ||
Restricted stock granted | 365 | |
Fair value of restricted stock granted | $ 1,400 | |
Options [Member] | ||
Unrecognized compensation expense | $ 4,600 | |
Unrecognized compensation weighted average period | 2 years 6 months | |
Options granted | 458 | |
Fair value of options granted | $ 1,100 | |
Weighted average grant date fair value per share | $ 2.50 | $ 3.63 |