Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 11, 2016 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | MBII | |
Entity Registrant Name | MARRONE BIO INNOVATIONS INC | |
Entity Central Index Key | 1,441,693 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 24,583,831 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 9,824 | $ 19,838 |
Restricted cash, current portion | 1,856 | 1,856 |
Accounts receivable | 4,694 | 2,347 |
Inventories, net | 8,560 | 9,064 |
Deferred cost of product revenues, including deferred cost of product revenues to related parties of $0 and $79 as of March 31, 2016 and December 31, 2015, respectively | 2,232 | 1,596 |
Prepaid expenses and other current assets | 930 | 1,211 |
Total current assets | 28,096 | 35,912 |
Property, plant and equipment, net | 19,077 | 18,445 |
Restricted cash, less current portion | 16,560 | 16,560 |
Other assets | 284 | 284 |
Total assets | 64,017 | 71,201 |
Current liabilities: | ||
Accounts payable | 2,604 | 2,007 |
Accrued liabilities | 4,634 | 5,689 |
Accrued interest due to related parties | 804 | 1,175 |
Deferred revenue, current portion | 4,396 | 2,919 |
Deferred revenue from related parties | 168 | |
Capital lease obligations, current portion | 763 | 647 |
Debt, current portion | 242 | 244 |
Total current liabilities | 13,443 | 12,849 |
Deferred revenue, less current portion | 1,929 | 2,021 |
Capital lease obligations, less current portion | 694 | 18 |
Debt, less current portion | 21,458 | 21,509 |
Debt due to related parties | 35,799 | 35,512 |
Other liabilities | 1,359 | 1,314 |
Total liabilities | $ 74,682 | $ 73,223 |
Commitments and contingencies (Note 8) | ||
Stockholders' deficit: | ||
Common stock: $0.00001 par value; 250,000 shares authorized, 24,584 shares issued and outstanding as of March 31, 2016 and 24,536 as of December 31, 2015 | $ 0 | $ 0 |
Additional paid in capital | 202,187 | 201,554 |
Accumulated deficit | (212,852) | (203,576) |
Total stockholders' deficit | (10,665) | (2,022) |
Total liabilities and stockholders' deficit | $ 64,017 | $ 71,201 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Deferred cost of product revenues to related parties | $ 0 | $ 79,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 24,584,000 | 24,536,000 |
Common stock, shares outstanding | 24,584,000 | 24,536,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||
Product | $ 2,577 | $ 1,774 |
License | 92 | 83 |
Related party | 199 | |
Total revenues | 2,669 | 2,056 |
Cost of product revenues, including cost of product revenues to related parties of $0 and $82 for the three months ended March 31, 2016 and 2015, respectively | 2,269 | 1,998 |
Gross profit | 400 | 58 |
Operating Expenses: | ||
Research, development and patent | 2,322 | 3,422 |
Selling, general and administrative | 5,530 | 7,887 |
Total operating expenses | 7,852 | 11,309 |
Loss from operations | (7,452) | (11,251) |
Other income (expense): | ||
Interest income | 15 | 9 |
Interest expense | (1,037) | (669) |
Interest expense to related parties | (796) | |
Other income (expense), net | (6) | (3) |
Total other expense, net | (1,824) | (663) |
Loss before income taxes | (9,276) | (11,914) |
Income taxes | 0 | 0 |
Net loss | $ (9,276) | $ (11,914) |
Basic and diluted net loss per common share | $ (0.38) | $ (0.49) |
Weighted-average shares outstanding used in computing net loss per common share | 24,569 | 24,465 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Cost of product revenues to related parties | $ 0 | $ 82 |
Condensed Consolidated Stateme6
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (9,276) | $ (11,914) |
Other comprehensive loss | 0 | 0 |
Comprehensive loss | $ (9,276) | $ (11,914) |
Condensed Consolidated Stateme7
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (9,276) | $ (11,914) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 594 | 833 |
Loss on disposal of equipment | 5 | 4 |
Share-based compensation | 617 | 1,090 |
Non-cash interest expense | 329 | 133 |
Net changes in operating assets and liabilities: | ||
Accounts receivable | (2,347) | (383) |
Inventories | 504 | 869 |
Prepaid Expenses and other assets | 109 | 277 |
Deferred cost of product revenues | (636) | (142) |
Accounts payable | 583 | (1,638) |
Accrued and other liabilities | (1,040) | (605) |
Accrued interest due to related parties | (371) | |
Deferred revenue | 1,385 | 315 |
Deferred revenue from related parties | (168) | (199) |
Net cash used in operating activities | (9,712) | (11,360) |
Cash flows from investing activities | ||
Purchases of property, plant and equipment | (49) | (1,030) |
Proceeds from the sale of equipment | 7 | |
Net cash used in investing activities | (49) | (1,023) |
Cash flows from financing activities | ||
Repayment of debt | (65) | (97) |
Repayment of capital leases | (204) | (492) |
Exercise of stock options | 16 | |
Net cash provided by financing activities | (253) | (589) |
Net decrease in cash and cash equivalents | (10,014) | (12,972) |
Cash and cash equivalents, beginning of period | 19,838 | 35,324 |
Cash and cash equivalents, end of period | 9,824 | 22,352 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest, net of capitalized interest of $0 and $4 for the three months ended March 31, 2016 and 2015, respectively | 1,882 | 536 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Property, plant and equipment included in accounts payable and accrued liabilities | 14 | $ 132 |
Equipment acquired under capital leases | $ 1,586 |
Condensed Consolidated Stateme8
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Cash Flows [Abstract] | ||
Cash paid for interest, net of capitalized interest | $ 0 | $ 4 |
Summary of Business, Basis of P
Summary of Business, Basis of Presentation and Liquidity | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Summary of Business, Basis of Presentation and Liquidity | 1. Summary of Business, Basis of Presentation and Liquidity Marrone Bio Innovations, Inc. (“Company”), formerly Marrone Organic Innovations, Inc., was incorporated under the laws of the State of Delaware on June 15, 2006, and is located in Davis, California. In July 2012, the Company formed a wholly-owned subsidiary, Marrone Michigan Manufacturing LLC (“MMM LLC”), which holds the assets of a manufacturing plant the Company purchased in July 2012. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. The Company makes bio-based pest management and plant health products. The Company targets the major markets that use conventional chemical pesticides, including certain agricultural and water markets where its bio-based products are used as alternatives for, or mixed with, conventional chemical pesticides. The Company also targets new markets for which (i) there are no available conventional chemical pesticides or (ii) the use of conventional chemical pesticides may not be desirable or permissible either because of health and environmental concerns (including for organically certified crops) or because the development of pest resistance has reduced the efficacy of conventional chemical pesticides. The Company delivers EPA-approved and registered biopesticide products and other bio-based products that address the global demand for effective, safe and environmentally responsible products. The Company is an early stage company with a limited operating history and has a limited number of commercialized products. As of March 31, 2016, the Company had an accumulated deficit of $212,852,000, has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future. The Company has funded operations primarily with net proceeds from public offerings of common stock, private placements of convertible preferred stock, convertible notes, and promissory notes and term loans, as well as with the proceeds from the sale of its products and payments under strategic collaboration and distribution agreements and government grants. The Company will need to generate significant revenue growth to achieve and maintain profitability. As of March 31, 2016, the Company had working capital of $14,653,000, including cash and cash equivalents of $9,824,000. In addition, as of March 31, 2016, the Company had debt and debt due to related parties of $21,700,000 and $35,799,000, respectively, for which the underlying debt agreements contain various financial and non-financial covenants, as well as certain material adverse change clauses. If the Company breaches any of the covenants contained within the debt agreements or if the material adverse change clauses are triggered, the entire unpaid principal and interest balances would be due and payable upon demand. In addition, as of March 31, 2016, the Company had a total of $18,416,000 of restricted cash relating to these debt agreements (see Notes 6 and 9). The Company participates in a heavily regulated and highly competitive crop protection industry and believes that adverse changes in any of the following areas could have a material effect on the Company’s future financial position, results of operations or cash flows: inability to obtain regulatory approvals, increased competition in the pesticide market, market acceptance of the Company’s products, weather and other seasonal factors beyond the Company’s control, litigation or claims against the Company related to intellectual property, patents, products or governmental regulation, and the Company’s ability to support increased growth. Although the Company recognizes that it will likely need to raise additional funds in the future, there can be no assurance that such efforts will be successful or that, in the event that they are successful, the terms and conditions of such financing will not be unfavorable. Any future equity financing may result in dilution to existing shareholders and any debt financing may include additional restrictive covenants. Any failure to obtain additional financing or to achieve the revenue growth necessary to fund the Company with cash flows from operations will have a material adverse effect upon the Company and will likely result in a substantial reduction in the scope of the Company’s operations and impact the Company’s ability to achieve its planned business objectives. Without obtaining a waiver, entering into strategic agreements that include significant cash payments upfront, significantly increasing revenues from sales or raising additional capital through the issuance of equity or debt, the Company currently estimates it may be below the $15,000,000 minimum cash balance requirement in the promissory notes with affiliates of Waddell & Reed by the fourth quarter of 2016. Further, without entering into a continuation of its current waiver due to expire December 31, 2016, the Company expects it will exceed its maximum debt-to-worth requirement under a promissory note with Five Star Bank. A violation of a covenant in one debt agreement will cause the Company to be in violation of certain covenants under each of its other debt agreements. Breach of covenants included in the Company’s debt agreements, which could result in the lenders demanding payment of the unpaid principal and interest balances, will have a material adverse effect upon the Company and would likely require the Company to seek to renegotiate these debt arrangements with the lenders. If such negotiations are unsuccessful, the Company may be required to seek protection from creditors through bankruptcy proceedings. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management is focused on efforts to increase liquidity in the near-term and plans to request relief of the minimum cash balance requirement and an extension of the waiver on the debt-to-worth ratio. Such strategic collaborations and relief under the debt agreements may not be available or may be on terms that are not favorable to the Company. The Company’s inability to maintain compliance with its debt covenants could have a negative impact on the Company’s financial condition and ability to continue as a going concern. If the Company becomes unable to continue as a going concern, the Company may have to liquidate its assets, and might realize significantly less than the values at which they are carried on its financial statements, and stockholders may lose all or part of their investment in the Company’s common stock. The accompanying financial statements have been prepared under the assumption that the Company will continue to operate as a going concern, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts of liabilities that may result from uncertainty related to the Company’s ability to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying financial information as of March 31, 2016, and for the three months ended March 31, 2016 and 2015, has been prepared by the Company, without audit, in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The information included in this Quarterly Report on Form 10-Q should be read in connection with the consolidated financial statements and accompanying notes included in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2015. In the opinion of management, the condensed consolidated financial statements as of March 31, 2016, and for the three months ended March 31, 2016 and 2015, reflect all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations, comprehensive loss and cash flows. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full fiscal year or any future periods. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. Actual results could differ from those estimates. Cash and Cash Equivalents The Company considers all highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents consists of cash on deposit, money market funds and certificates of deposit accounts with United States (“U.S.”) financial institutions. The Company is exposed to credit risk in the event of default by financial institutions to the extent that cash and cash equivalents balances with financial institutions are in excess of amounts that are insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses on these deposits. Restricted Cash The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its June 2014 Secured Promissory Note and the terms of its August 2015 Senior Secured Promissory Notes. See Notes 6 and 9, respectively, for further discussion. Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and debt. The Company deposits its cash and cash equivalents with high credit quality domestic financial institutions with locations in the U.S. Such deposits may exceed federal deposit insurance limits. The Company believes the financial risks associated with these financial instruments are minimal. The Company’s customer base is dispersed across many different geographic areas, and currently most customers are pest management distributors in the U.S. Generally, receivables are due up to 120 days from the invoice date and are considered past due after this date, although the Company may offer extended terms from time to time. For the three months ended March 31, 2016 and 2015, 9% and 2%, respectively, of the Company’s revenues were generated from international customers. The Company’s principal sources of revenues are its Regalia and Grandevo product lines. These two product lines accounted for 80% and 97% of the Company’s total revenues for the three months ended March 31, 2016 and 2015, respectively. Customers to which 10% or more of the Company’s total revenues are attributable for any one of the periods presented consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C CUSTOMER D CUSTOMER E CUSTOMER F (1) For the three months ended March 31, 2016 24% 13% 13% 3% 5% — 2015 17% 4% 4% 24% 14% 10% (1) Represents revenues from related parties. See Note 9 for further discussion. Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2016 or December 31, 2015 consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C March 31, 2016 31% 10% 4% December 31, 2015 32% 29% 12% Concentrations of Supplier Dependence The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company’s single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. A disruption at this supplier’s manufacturing site or a disruption in trade between the U.S. and China could negatively impact sales of Regalia. The Company currently uses one supplier and does not have a long-term supply contract with this supplier. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price. Inventories Inventories are stated at the lower of cost or market value (net realizable value or replacement cost) and include the cost of material and external and internal labor and manufacturing costs. Cost is determined on the first-in, first-out basis. The Company provides for inventory reserves when conditions indicate that the selling price may be less than cost due to physical deterioration, obsolescence, changes in price levels or other factors. Additionally, the Company provides reserves for excess and slow-moving inventory on hand that is not expected to be sold to reduce the carrying amount of excess and slow-moving inventory to its estimated net realizable value. The reserves are based upon estimates about future demand from the Company’s customers and distributors and market conditions. Deferred Cost of Product Revenues Deferred cost of product revenues are stated at the lower of cost or net realizable value and include product sold where title has transferred but the criteria for revenue recognition have not been met. As of March 31, 2016 and December 31, 2015, the Company recorded deferred cost of product revenues of $2,232,000 and $1,596,000, respectively, including deferred cost of product revenues to related parties of $79,000 as of December 31, 2015. As of March 31, 2016, there were no deferred cost of product revenues to related parties. Revenue Recognition The Company recognizes revenues when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. If contractual obligations, acceptance provisions or other contingencies exist which indicate that the price is not fixed or determinable, revenue is recognized after such obligations or provisions are fulfilled or expire. Product revenues consist of revenues generated from sales of the Company’s products to distributors and direct customers, net of rebates and cash discounts. For sales of products made to distributors, the Company recognizes revenue either on a sell-in or sell-through basis depending on the specific facts and circumstances of the transaction(s) with the distributor. Factors considered include, but are not limited to, whether the payment terms offered to the distributor are structured to correspond to when product is resold, the distributor history of adhering to the terms of its contractual arrangements with the Company, whether the Company has a pattern of granting concessions for the benefit of the distributor and whether there are other conditions that may indicate that the sale to the distributor is not substantive. In some cases, the Company recognizes distributor revenue as title and risk of loss passes, provided all other revenue recognition criteria have been satisfied (the “sell-in” method). For certain sales to certain distributors, the revenue recognition criteria for distributor sales are not satisfied at the time title and risk of loss passes to the distributor; specifically, in instances where “inventory protection” arrangements were offered to distributors that permitted these distributors to return to the Company certain unsold products, the Company considers the arrangement not to be fixed or determinable, and accordingly, revenue is deferred until products are resold to customers of the distributor (the “sell-through” method). As of March 31, 2016 and December 31, 2015, the Company recorded current deferred product revenues of $4,069,000 and $2,760,000, respectively, including current deferred product revenues from related parties of $168,000 as of December 31, 2015. There were no current deferred product revenues from related parties as of March 31, 2016. The cost of product revenues associated with such deferral are also deferred and classified as deferred cost of product revenues in the consolidated balance sheets. Cash received from customers related to delivered product that may not represent a true sale is classified as customer refund liabilities in the consolidated balance sheets and the related cost of inventory remains in inventory in the consolidated balance sheets until the product is returned or is resold to customers of the distributor and revenue is recognized. During the three months ended March 31, 2016 and 2015, 44% and 32%, respectively, of total revenues were recognized on a sell-through basis. From time to time, the Company offers certain product rebates to its distributors and growers, which are estimated and recorded as reductions to product revenues, and an accrued liability is recorded at the later of when the revenues are recorded or the rebate is being offered. The Company recognizes license revenues pursuant to strategic collaboration and distribution agreements under which the Company receives payments for the achievement of certain testing validation, regulatory progress and commercialization events. As these activities and payments are associated with exclusive rights that the Company provides in connection with strategic collaboration and distribution agreements over the term of the agreements, revenues related to the payments received are deferred and recognized over the term of the exclusive distribution period of the respective agreement. For the three months ended March 31, 2015, the Company received payments totaling $750,000 under these agreements. No payments were received under these agreements for the three months ended March 31, 2016. As of March 31, 2016, an additional $300,000 was included in accounts receivable. For the three months ended March 31, 2016 and 2015, the Company recognized $92,000 and $83,000, respectively, as license revenues. As of March 31, 2016, the Company recorded current and non-current deferred revenues of $327,000 and $1,929,000, respectively, related to payments received under these agreements. As of December 31, 2015, the Company recorded current and non-current deferred revenues of $327,000 and $2,021,000, respectively, related to payments received under these agreements. Research, Development and Patent Expenses Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended March 31, 2016 and 2015, research and development expenses totaled $2,066,000 and $3,115,000, respectively, and patent expenses totaled $256,000 and $307,000, respectively. Net Loss per Share Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of the potential common stock equivalents, which consist of stock options and warrants to purchase common stock, are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands): MARCH 31, 2016 2015 Stock options outstanding 2,839 2,663 Warrants to purchase common stock 4,027 145 Restricted stock units outstanding 171 — Recently Adopted Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) Leases: Amendments to the FASB Accounting Standards Codifications In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) Reclassifications Certain prior period balances in the consolidated balance sheets have been reclassified to conform to the current year presentation. Such reclassifications had no impact on net income, cash flows or shareholders’ equity previously reported. As a result of Adopting ASU 2015-03, the Company retrospectively reclassified certain debt issuance costs as of December 31, 2015. Prepaid expenses and other current assets in the amount of $104,000 and other assets in the amount of $462,000 were reclassified. These amounts were reclassified as a $23,000 discount to debt, current portion, a $267,000 discount to debt, less current portion and $276,000 discount to long-term debt, due to related party. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Accounting Standards Codification (“ASC”) 820, Fair Value Measurements ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three tier value hierarchy, which prioritizes inputs that may be used to measure fair value as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The following table presents the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 (in thousands): MARCH 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,750 $ 3,750 $ — $ — DECEMBER 31, 2015 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,750 $ 3,750 $ — $ — The Company’s money market funds are held at registered investment companies. As of March 31, 2016 and December 31, 2015, the money market funds were in active markets and, therefore, are measured based on the Level 1 valuation hierarchy. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories, net consist of the following (in thousands): MARCH 31, DECEMBER 31, 2016 2015 Raw materials $ 4,378 $ 5,110 Work in progress 1,075 1,044 Finished goods 3,107 2,910 $ 8,560 $ 9,064 As of March 31, 2016 and December 31, 2015, the Company had $152,000 and $24,000, respectively, in reserves against its inventories. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 5. Accrued Liabilities Accrued liabilities consist of the following (in thousands): MARCH 31, DECEMBER 31, Accrued compensation $ 1,004 $ 999 Accrued severance 131 209 Accrued warranty costs 503 384 Accrued legal costs 1,424 915 Accrued SEC civil penalty (Note 8) — 1,750 Accrued liabilities, other 1,572 1,432 $ 4,634 $ 5,689 On January 14, 2015, James Iademarco was appointed as the Company’s President and Chief Operating Officer. On August 20, 2015, the Company entered into a separation agreement with Mr. Iademarco whereby he resigned effective August 31, 2015, but agreed to remain available to advise the Company in a consulting capacity for an additional period of up to 90 days to assist with the transition of various pending matters. Pursuant to the separation agreement, Mr. Iademarco is entitled to receive, among other things, an amount equal to one-twelfth of his prior base salary of $290,000 on or before the 15th day of each of the twelve months following August 31, 2015 and certain premium payments for health and vision insurance coverage, in partial consideration for Mr. Iademarco granting the Company a general release of liability and claims. As of March 31, 2016, $131,000 was accrued based on the terms of Mr. Iademarco’s separation agreement. The Company warrants the specifications and/or performance of its products through implied product warranties and has extended product warranties to qualifying customers on a contractual basis. The Company estimates the costs that may be incurred during the warranty period and records a liability in the amount of such costs at the time product is shipped. The Company’s estimate is based on historical experience and estimates of future warranty costs as a result of increasing usage of the Company’s products. The Company periodically assesses the adequacy of its recorded warranty liability and adjusts the amount as necessary. Changes in the Company’s accrued warranty costs during the period are as follows (in thousands): Balance at December 31, 2015 $ 384 Warranties issued during the period 121 Settlements made during the period (2 ) Balance at March 31, 2016 $ 503 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Debt, including debt due to related parties, consists of the following (in thousands): March 31, December 31, Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 18.00% per annum, payable monthly through October 2017, collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of March 31, 2016 and December 31, 2015 of $42 and $48, respectively, discount is based on imputed interest rate of 18.1% $ 12,408 $ 12,402 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (5.5% as of March 31, 2016) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2016 and December 31, 2015 of $264 and $270, respectively, discount is based on imputed interest rate of 5.6% 9,292 9,351 Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest is payable biannually with principal payments due in increments at three, four and five years from the closing date, collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of March 31, 2016 and December 31, 2015 of $4,201 and $4,488, respectively debt dscount is based on imputed interest rate of 10.9% (see Note 9) 35,799 35,512 Debt, including debt due to related parties 57,499 57,265 Less debt due to related parties (35,799 ) (35,512 ) Less current portion (242 ) (244 ) $ 21,458 $ 21,509 The fair value of the Company’s outstanding debt obligations as of March 31, 2016 and December 31, 2015 was $23,220,000 and $23,457,000, respectively, which was estimated based on a discounted cash flow model using an estimated market rate of interest of 11.25% for the fixed rate debt and 5. 5% for the variable rate debt, and is classified as Level 3 within the fair value hierarchy. Secured Promissory Notes On October 2, 2012, the Company borrowed $7,500,000 pursuant to senior notes (“October 2012 Secured Promissory Notes”) with a group of lenders. The October 2012 Secured Promissory Notes have an initial term of three years and can be extended for an additional two years in one year increments at the option of the Company. During the initial three-year term, the October 2012 Secured Promissory Notes bear interest at 12% per annum. Interest on the October 2012 Secured Promissory Notes is payable monthly through the initial maturity date of the loan, which is October 2, 2015, or through any extension period. The principal and all unpaid interest are due on the maturity date, as may be extended. In August 2015, the terms of the October 2012 Secured Promissory Notes were amended, resulting in an increase in the interest rate to 18% effective September 1, 2015 for the remaining term of the notes. The Company also provided a written notice in September 2015 to extend the maturity date to October 2, 2017. The amendments were accounted for as a modification of the loan agreement with the effective interest rate adjusted prospectively from the amendment date. As part of the terms of the October 2012 Secured Promissory Notes, the Company is required to pay a fee of 5% of the funded principal amount to the agent that facilitated the borrowing and provides management of the relationship with the group of lenders (“Agent Fee”). This Agent Fee is payable within 30 days after all interest and principal have been paid. For each year the Company extends the maturity date of the October 2012 Secured Promissory Notes beyond the initial term, the agent will receive an additional 1% fee based on the funded principal amount. The present value of the unpaid Agent Fee, based on 5% of the funded principal amount, or $261,000, as of the closing date of the October 2012 Secured Promissory Notes this fee was originally recorded as both deferred financing costs as a component of current and non-current other assets and non-current other liabilities. The balance of the deferred financing costs as of December 31, 2015 has been retrospectively reclassed as a discount to these notes as of December 31, 2015 as further discussed in Note 2. As the maturity date was extended two years in September 2015, the agent fee was increased to 7% of the funded principal amount. The amortization of the deferred financing costs and the accretion of the Agent Fee are recorded to interest expense over the term of the arrangement. As of March 31, 2016, $683,000 of the Agent Fee, including the amounts relating to the additional funds received from the issuance of the April 2013 Secured Promissory Notes discussed below, was recorded under non-current other liabilities. In addition, the Company incurred an additional $66,000 in financing-related costs, primarily legal fees. These costs were originally recorded as deferred financing costs and have been retrospectively reclassified as of December 31, 2015 as a discount to this note and are being amortized to interest expense over the term of the arrangement as further discussed in Note 2. The October 2012 Secured Promissory Notes are secured by the Company’s ownership interest in MMM LLC, a security interest in the assets of the Company’s manufacturing plant and all of the Company’s other assets, subject to certain permitted liens. This security interest was subordinate to the security interest held by the holder of a previously outstanding promissory note issued in April 2012 and repaid in January 2013 (“April 2012 Note”), which also had a security interest in MMM LLC. The Company also issued warrants (“Common Stock Warrants”) to the group of lenders to purchase a number of shares of common stock equal to 15% of the funded principal amount of the October 2012 Secured Promissory Notes divided by 70% of the value of common stock in a sale of the Company or a Qualified IPO, with such Common Stock Warrants having an exercise price of 70% of the value of common stock in a sale of the Company or a Qualified IPO. The Common Stock Warrants would be automatically exercised immediately prior to expiration on the earlier to occur of a Qualified IPO or a sale of the Company or the maturity of the October 2012 Secured Promissory Notes. The October 2012 Secured Promissory Notes could be prepaid six months after the initial funding date or earlier if a Qualified IPO or a sale of the Company occurs. As the predominant settlement feature of the Common Stock Warrants is to settle a fixed monetary amount in a variable number of shares, the Common Stock Warrants were accounted for under ASC 480, Distinguishing Liabilities from Equity The October 2012 Secured Promissory Notes contain certain covenant requirements, which include a requirement to maintain a minimum cash balance of the lesser of the April 2012 Note indebtedness or $5,000,000. As the April 2012 Note was fully paid off in January 2013, the Company no longer has a minimum cash balance requirement under the October 2012 Secured Promissory Notes. The Company is also precluded from adding additional debt without lender approval but allowance is made if such debt is subordinated to the October 2012 Secured Promissory Notes or if such additional debt is not more than $2,000,000 in the aggregate. In the event of default on the October 2012 Secured Promissory Notes, the lenders may declare the entire unpaid principal and interest immediately due and payable. On April 10, 2013 (“Conversion Date”), the Company entered into an amendment to increase, by up to $5,000,000, the amount available under the terms of the loan agreement with respect to the October 2012 Secured Promissory Notes. Under this amendment, an additional $4,950,000 was issued in partial consideration for $3,700,000 in cash received and in partial conversion for the cancellation of $1,250,000 of the total principal balance of the October 2012 Subordinated Convertible Note described below (collectively, “April 2013 Secured Promissory Notes”). The total amount borrowed under the amended loan agreement for the October 2012 Secured Promissory Notes and the April 2013 Secured Promissory Notes increased from $7,500,000 to $12,450,000 as of the Conversion Date. The accrued interest of $74,000 for the partially converted October 2012 Subordinated Convertible Note as of the Conversion Date shall be repaid or converted on the applicable maturity date of the October 2012 Subordinated Convertible Note. In connection with the issuance of the April 2013 Secured Promissory Notes, the Company issued additional warrants (“Additional Common Stock Warrants”) to purchase a number of shares of common stock equal to 20% of the funded principal amount of the April 2013 Secured Promissory Notes divided by 70% of the value of common stock in a sale of the Company or a Qualified IPO, with such Additional Common Stock Warrants to have an exercise price of 70% of the value of common stock in a sale of the Company or a Qualified IPO. As the predominant settlement feature of the Additional Common Stock Warrants was to settle a fixed monetary amount in a variable number of shares, the Additional Common Stock Warrants were accounted for under ASC 480. Accordingly, the Additional Common Stock Warrants were recorded at estimated fair value on their issuance date and were adjusted to their estimated fair value as of each reporting date with the change in estimated fair value recorded as a component of change in estimated fair value of financial instruments in the Company’s consolidated statements of operations. The fair value of the Additional Common Stock Warrants at the date of issuance was estimated to be $465,000. The Company estimated the fair value of the Additional Common Stock Warrants using a PWERM valuation based on unobservable inputs and, therefore, the Additional Common Stock Warrants were classified as Level 3 liabilities in the fair value hierarchy. Upon closing of the IPO, the exercise price of the Additional Common Stock Warrants was determined to be $8.40 per share and the number of shares to be issued upon exercise of the warrants was no longer variable. As a result of the IPO, the Additional Common Stock Warrants were considered to be indexed to the Company’s stock, and accordingly, the common stock warrants liability was reclassified and included in stockholders’ equity (deficit) during the year ended December 31, 2013. The debt holder who converted $1,250,000 principal balance of the October 2012 Subordinated Convertible Note (with a fair value of $1,360,000 on the date of conversion) also loaned an additional $2,500,000 in cash as part of the April 2013 Secured Promissory Notes (collectively, the “$3,750,000 Notes”). The Company accounted for the conversion as an extinguishment of debt in accordance with ASC 470-50-40, Modifications and Extinguishments The following table shows the consideration received, fair values of the notes and common stock warrants issued and calculation of the gain on extinguishment of debt for the $3,750,000 Notes (in thousands): Consideration received Fair value of October 2012 Subordinated Convertible Note $ 1,360 Cash 2,500 Total consideration received (a) $ 3,860 Notes and warrants issued Principal balance of notes issued $ 3,750 Debt discount (1) (291 ) Fair value of notes issued 3,459 Fair value of Additional Common Stock Warrants issued 352 Total fair value of notes and warrants issued (b) $ 3,811 Gain on extinguishment of debt (a—b) $ 49 (1) The amortization of this account is being recorded in interest expense in the consolidated statements of operations over the term of the arrangement. The remaining fair value of the Additional Common Stock Warrants of $113,000, net of the fair value of the Additional Common Stock Warrants issued of $352,000 related to the $3,750,000 Notes discussed above, was recorded as a debt discount to the April 2013 Secured Promissory Notes and is being amortized to interest expense over the term of the arrangement. As a result of the amendment described above, the Company is also required to pay the Agent Fee, 5% of the $3,700,000 in cash received from the April 2013 Secured Promissory Notes, under the same terms as the October 2012 Secured Promissory Notes. In addition, the portion of the Agent Fee relating to the converted October 2012 Subordinated Convertible Note that would be due under the terms of the October 2012 Subordinated Convertible Note will be paid under the terms of the October 2012 and April 2013 Secured Promissory Notes. The present value of the unpaid Agent Fee of $172,000, based on 5% of the funded principal amount of $4,950,000, as of the closing date of the April 2013 Secured Promissory Notes was recorded as both deferred financing costs as a component of current and non-current other assets and non-current other liabilities. The amortization of the deferred financing costs and the accretion of the Agent Fee are being amortized to interest expense over the term of the arrangement. In addition, the Company incurred an additional $24,000 in financing-related costs, primarily legal fees. These costs were originally recorded as deferred financing costs as a component of current and non-current other assets. The balance of these deferred financing costs as of December 31, 2015 has been retrospectively reclassed as a discount to these notes as of December 31, 2015 as further discussed in Note 2. These discounts are being amortized to interest expense over the term of the arrangement. The amendment to the loan agreement also amended the interest provision applicable to the October 2012 and April 2013 Secured Promissory Notes to allow any holder of the October 2012 and April 2013 Secured Promissory Notes to request the Company to defer all interest due monthly to the applicable maturity date and the optional prepayment provision applicable to the October 2012 and April 2013 Secured Promissory Notes to allow the Company to repay the outstanding amount of the October 2012 and April 2013 Secured Promissory Notes either with the written consent of the lender or the agent on such lenders’ behalf or without such consent provided that the Company pays the interest that would have been due from the prepayment date to the initial maturity date. As of December 31, 2014, the Company was in breach of its covenants under the October 2012 and April 2013 Secured Promissory Notes as a result of its failure to provide annual financial statements in a timely manner and as the Company was in breach of certain of its covenants under its June 2014 Secured Promissory Note as described below. However, in November 2015, the Company received an extension from the lending agent with respect to compliance with the requirements to deliver annual financial statements to the earlier of (i) November 15, 2015 or (ii) such time such financial statements are filed with the SEC. The covenant breach was cured in November 2015 as a result of delivering annual financial statements within the timeline prescribed in the extension and the waiver of certain of the Company’s covenants with respect to the June 2014 Secured Promissory Note as described below. Credit Facility On June 14, 2013, the Company entered into a credit facility agreement (“June 2013 Credit Facility”) with a group of lenders that are, or that are affiliated with, existing investors in the Company. Under the June 2013 Credit Facility, the lenders have committed to permit the Company to draw an aggregate amount of up to $5,000,000, and, subject to the Company’s obtaining additional commitments from lenders, such amount may be increased to up to $7,000,000. The June 2013 Credit Facility expired on June 30, 2014 without having been drawn upon. During the term of the June 2013 Credit Facility, the Company could request from the lenders up to four advances, with each advance equal to one-quarter of each lender’s aggregate commitment amount. The Company would issue a promissory note in the principal amount of each such advance that would accrue interest at a rate of 10% per annum. The principal and all unpaid interest under the promissory notes would be due on the maturity date, and the Company could not prepay the promissory notes prior to the maturity date without consent of at least a majority in interest of the aggregate principal amount of the promissory notes then outstanding under the June 2013 Credit Facility. In connection with the June 2013 Credit Facility, the Company agreed to pay a fee of 2% of the total commitment amount to the lenders. In addition, the Company incurred an additional $10,000 in financing-related costs, primarily legal fees. These costs were recorded as deferred financing costs as a component of current other assets and were fully amortized to interest expense as of December 31, 2014. In connection with the June 2013 Credit Facility, the Company issued warrants (“June 2013 Warrants”) to purchase a number of shares of common stock equal to 10% of the total committed amount of the June 2013 Credit Facility divided by 70% of the value of common stock in a sale of the Company or a Qualified IPO, with such June 2013 Warrants to have an exercise price of 70% of the value of common stock in a sale of the Company or a Qualified IPO. The June 2013 Warrants expire upon the earlier of June 14, 2023 or the sale of the Company. As the predominant settlement feature of the June 2013 Warrants was to settle a fixed monetary amount in a variable number of shares, the June 2013 Warrants were accounted for under ASC 480. Accordingly, the June 2013 Warrants were recorded at estimated fair value on their issuance date and were adjusted to their estimated fair value as of each reporting date with the change in estimated fair value recorded as a component of change in estimated fair value of financial instruments in the Company’s consolidated statements of operations. The fair value of the June 2013 Warrants at the date of issuance of $435,000 was recorded as a deferred financing cost as a current other asset and was being amortized to interest expense over the term of the arrangement. Until the effective date of the IPO, the Company estimated the fair value of the June 2013 Warrants using a PWERM valuation based on unobservable inputs and, therefore, the June 2013 Warrants were classified as Level 3 liabilities in the fair value hierarchy. Upon closing of the IPO, the exercise price of the June 2013 Warrants was determined to be $8.40 per share and the number of shares to be issued upon exercise of the warrants was no longer variable. As a result of the IPO, the June 2013 Warrants were considered to be indexed to the Company’s stock, and accordingly, the common stock warrants liability was reclassified and included in stockholders’ equity (deficit) during the year ended December 31, 2013. Secured Promissory Note On April 11, 2014, the Company entered into a $3,000,000 promissory note with Five Star Bank. On April 14, 2014, the Company entered into an agreement with the bank to modify the terms of the promissory note from a single payment loan to a revolving line of credit, which allowed the Company to borrow up to $3,000,000. On April 28, 2014, the Company entered into an agreement to modify the terms of the revolving line of credit to increase the borrowing limit up to $5,000,000. In June 2014, the $4,687,000 balance on the revolving line of credit was paid off and the line was closed when the Company borrowed $10,000,000 pursuant to a business loan agreement and promissory note (“June 2014 Secured Promissory Note”) with the bank (“Lender”) which bears interest at prime rate (3.5% as of December 31, 2015) plus 2.00% per annum. The interest rate is subject to change from time to time to reflect changes in the prime rate; however, the interest rate shall not be less than 5.25% or more than the maximum rate allowed by applicable law. If the interest rate increases, the Lender, may, at its option, increase the amount of each monthly payment to ensure that the note would be paid in full by the maturity date, increase the amount of each monthly payment to reflect the change in interest rate, increase the number of monthly payments or keep the monthly payments the same and increase the final payment amount. The June 2014 Secured Promissory Note is repayable in monthly payments of $64,390 commencing in July 2014, with the final payment due in June 2036. Certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles have been pledged as collateral for the promissory note. The Company is required to maintain a deposit balance with the Lender of $1,560,000, which is recorded as restricted cash included in non-current assets. In addition, until the Company provides documentation that the proceeds were used for construction of the Company’s manufacturing plant, proceeds from the loan will be maintained in a restricted deposit account with the Lender. As of March 31, 2016, the Company had $1,856,000 remaining in this restricted deposit account, which is recorded as restricted cash included in current assets. In addition, the Company incurred an additional $304,000 in financing-related costs, including USDA guarantee fees. These costs were originally recorded as deferred financing costs as a component of current and non-current other assets. The balance of the deferred financing costs as of December 31, 2015 has been retrospectively reclassed as a discount to these notes as of December 31, 2015 as further discussed in Note 2. These discounts are being amortized to interest expense over the term of the arrangement. The Company may prepay 20% of the outstanding principal loan balance each year without penalty. A prepayment fee of 10% will be charged if prepayments exceed 20% in the first year, and the prepayment fee will decrease by 1% each year for the first ten years of the loan. The Company is required to maintain a current ratio of not less than 1.25-to-1.0, a debt-to-worth ratio of no greater than 4.0-to-1.0 and a loan-to-value ratio of no greater than 70% as determined by the Lender. The Company is also required to comply with certain affirmative and negative covenants under the loan agreement discussed above. In the event of default on the debt, the Lender may declare the entire unpaid principal and interest immediately due and payable. As of December 31, 2014, the Company was in breach of certain of its covenants under the loan agreement as a result of its annual and quarterly reports not being filed within the prescribed time period and its being in breach of covenants on the October 2012 and April 2013 Secured Promissory Notes described above. In addition, effective September 30, 2015, the Company’s debt-to-worth ratio was greater than 4.0-to-1.0 as a result of the issuance of $40,000,000 in promissory notes in August 2015 as described in Note 9, which increased the Company’s debt while the Company continued to incur net losses, which decreased stockholders’ equity. However, in November 2015, the Company received a waiver from the Lender with respect to compliance with the requirements to (i) deliver annual financial statements (extended to November 15, 2015), (ii) maintain a current ratio greater than 1.25-to-1.0 (extended to December 31, 2015) and (iii) maintain a debt-to-worth ratio less than 4.0-to-1.0 (extended to December 31, 2016). The receipt of this waiver and the delivery of annual financial statements within the timeline prescribed in the waiver and the extension under the October 2012 and April 2013 Secured Promissory Notes cured the Company of being in breach of the covenants under the loan agreement. |
Share-Based Plans
Share-Based Plans | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Plans | 7. Share-Based Plans As of March 31, 2016, there were 2,839,000 options outstanding, 171,000 restricted stock units outstanding and 2,539,000 share-based awards available for grant under the outstanding equity incentive plans. For the three months ended March 31, 2016 and 2015, the Company recognized share-based compensation of $617,000 and $1,090,000, respectively. During the three months ended March 31, 2016, the Company granted 863,000 options at a weighted-average exercise price of $1.22. During the three months ended March 31, 2016, 37,000 options were exercised at a weighted-average exercise price of $0.43 per share. The following table summarizes the activity of restricted stock units from December 31, 2015 to March 31, 2016 (in thousands, except weighted average grant date fair value): WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Nonvested at December 31, 2015 45 $ 1.23 Granted 81 1.06 Vested (23 ) 1.23 Forfeited (7 ) 1.23 Nonvested at March 31, 2016 96 $ 1.09 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies Operating Leases The Company has a non-cancelable lease for an aggregate of approximately 24,500 square feet of non-contiguous office space in an office complex in Davis, California under which a portion of the covered space terminated beginning in February 2014. The remaining portion of the space will terminate by October 2016. The lease includes negotiated annual increases in the monthly rental payments. In September 2013, the Company entered into a lease agreement, amended in April 2014, for approximately 27,300 square feet of office and laboratory space located in Davis, California. The initial term of the lease is for a period of 60 months and commenced in August 2014. The monthly base rent is $44,000 per month for the first 12 months with a 3% increase each year thereafter. Concurrent with the amendment, in April 2014, the Company entered into a lease agreement with an affiliate of the landlord to lease approximately 17,400 square feet of office and laboratory space in the same building complex in Davis, California. The initial term of the lease is for a period of 60 months and commenced in August 2014. The monthly base rent is $28,000 with a 3% increase each year thereafter. On January 19, 2016, the Company entered into an agreement with a sublessee to sublease approximately 3,800 square feet of vacant office space located in Davis, California pursuant to the terms of its lease agreement. The initial term of the sublease is for a period of approximately 43 months and commenced on February 1, 2016. The monthly base rent is approximately $5,000 per month for the first 12 months with a 5% increase each year thereafter. Litigation On September 5, 2014, September 8, 2014, September 11, 2014, September 15, 2014 and November 3, 2014, the Company, along with certain of its current and former officers and directors and others were named as defendants in putative securities class action lawsuits filed in the U.S. District Court for the Eastern District of California. On February 13, 2015, these actions were consolidated as Special Situations Fund III QP, L.P. et al v. Marrone Bio Innovations, Inc. et al On September 9, 2014 and November 25, 2014, shareholder derivative actions were filed in the Superior Court of California, County of Yolo (Case No. CV14-1481) and the U.S. District Court for the Eastern District of California (Case No. 1:14-cv-02779-JAM-CKD), purportedly on the Company’s behalf, against certain current and former officers and members of its board of directors (the “2014 Derivative Actions”). The plaintiffs in the 2014 Derivative Actions allege that the defendants breached their fiduciary duties, committed waste, were unjustly enriched and aided and abetted breaches of fiduciary duty by causing the Company to issue allegedly false and misleading statements. The issues in the 2014 Derivative Actions overlap substantially with those at issue in the Class Action described above. The plaintiffs in the 2014 Derivative Actions seek, purportedly on behalf of the Company, an unspecified award of damages including, but not limited to, various corporate governance reforms, an award of restitution, an award of reasonable costs and expenses, including attorneys’ fees, and other further relief as the Courts may deem just and proper. The Courts have granted the parties’ stipulations to defer litigation activity, subject to certain conditions and pending certain developments in the Class Action. On October 14, 2015, a shareholder derivative action was filed in the Superior Court of California, County of Yolo (Case No. CV15-1423), purportedly on the Company’s behalf, against certain current and former officers and members of the Company’s board of directors and the Company’s independent registered public accounting firm (the “2015 Derivative Action,” and with the 2014 Derivative Actions, the “Derivative Actions”). The plaintiff in the 2015 Derivative Action alleges that the director and officer defendants breached their fiduciary duties, committed waste and were unjustly enriched by causing the Company to issue allegedly false and misleading statements. The plaintiff in the 2015 Derivative Action also alleges that the Company’s independent registered public accounting firm committed professional negligence and malpractice. The issues in the 2015 Derivative Action overlap substantially with those at issue in the 2014 Derivative Actions and the Class Action described above. On February 5, 2016, the Court approved a stipulation between the parties deferring action pending the outcome of a mediation proceeding, and ordered the parties to provide a status update on May 5, 2016. On May 5, 2016, a status report was submitted for the 2015 Derivative Action, advising the court that no settlement agreement was reached at the mediation, and setting June 6, 2016 as the date by which certain current and former officers and directors of the Company must respond to the complaint. The outcome of this matter is not presently determinable. The Company is currently unable to estimate a range of reasonably possible loss for the litigation as these matters involve significant uncertainties. Those uncertainties include the legal theory or the nature of the claims, the complexity of the facts, the results of any investigation or litigation and the timing of resolution of the investigations or litigation. Although the Company cannot estimate a range of reasonably possible loss based on currently available information, the resolution of these matters could have a material adverse effect on its financial position, results of operations and cash flows. SEC Investigation In September 2014, the Company advised the staff of the Division of Enforcement of the SEC that the Audit Committee of the Company’s board of directors had commenced an internal investigation. The SEC commenced a formal investigation of these matters, and in February 2016, the Company entered into a settlement agreement with the SEC. In agreeing to the settlement, the Company neither admits nor denies the SEC’s allegations that the Company violated certain provisions of the Securities Act of 1933 and the Exchange Act. Under the terms of the settlement agreement, the Company paid a $1,750,000 civil penalty in March 2016 and consented to an injunction against future violations of such laws. The Company had previously recorded an expense for $1,750,000 in its consolidated statements of operations for the year ended December 31, 2014 to accrue its estimate of the penalties arising from such enforcement action. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 9. Related Party Transactions August 2015 Senior Secured Promissory Notes On August 20, 2015, the Company entered into a purchase agreement with Ivy Science & Technology Fund, Waddell & Reed Advisors Science & Technology Fund and Ivy Funds VIP Science and Technology, each an affiliate of Waddell & Reed, which is a beneficial owner of more than 5% of the Company’s common stock. Pursuant to such purchase agreement, the Company sold to such affiliates senior secured promissory notes (“August 2015 Senior Secured Promissory Notes”) in the aggregate principal amount of $40,000,000. The August 2015 Senior Secured Promissory Notes bear interest at a rate of 8% per annum payable semi-annually on June 30 or December 31 of each year, commencing on December 31, 2015, with $10,000,000 payable three years from the closing, $10,000,000 payable four years from the closing and $20,000,000 payable five years from the closing. Debt due to related parties as of March 31, 2016 was $35,799,000, net of unamortized debt discount of $4,201,000. The fair value of the Company’s debt due to related parties was $36,650,000 as of March 31, 2016, which was estimated based on a discounted cash flow model using an estimated market rate of interest of 11.25%, and is classified as Level 3 within the fair value hierarchy. Accrued interest due to related parties as of March 31, 2016 was $804,000. The August 2015 Senior Secured Promissory Notes contain customary covenants, in addition to the contractual obligation to maintain cash and cash equivalents of at least $15,000,000, which is recorded as restricted cash included in non-current assets. The $15,000,000 that the Company is required to maintain is not required to be segregated from the Company’s operational cash. In addition, the Company incurred an additional $302,000 in financing-related costs, primarily legal fees. These costs were originally recorded as deferred financing costs as a component of current and non-current other assets. The balance of these deferred financing costs as of December 31, 2015 has been retrospectively reclassed as a discount to these notes as of December 31, 2015 as further discussed in Note 2 to the financial statements. These discounts are being amortized to interest expense over the term of the arrangement. The August 2015 Senior Secured Promissory Notes are secured by substantially all the Company’s personal property assets. The agent, acting on behalf of the lenders, shall be entitled to have a first priority lien on the Company’s intellectual property assets, pursuant to intercreditor arrangements with certain of the Company’s existing lenders. In connection with the August 2015 Senior Secured Promissory Notes, the Company issued warrants (“August 2015 Warrants”) to purchase 4,000,000 shares of common stock of the Company. The August 2015 Warrants are immediately exercisable at an exercise price of $1.91 per share and may be exercised at a holder’s option at any time on or before August 20, 2023 (subject to certain exceptions). The fair value of the August 2015 Warrants at the date of issuance of $4,610,000 was recorded as a discount to the August 2015 Senior Secured Promissory Notes as a component of non-current other liabilities and is being amortized to interest expense to related parties over the term of the arrangement. The August 2015 Senior Secured Promissory Notes provide for various events of default, including, among others, default in payment of principal or interest, breach of any representation or warranty by the Company or any subsidiary under any agreement or document delivered in connection with the notes, a continued breach of any other condition or obligation under any loan document, certain bankruptcy, liquidation, reorganization or change of control events, the acquisition by any person or persons acting as group, other than the lenders, of beneficial ownership of 40% or more of the outstanding voting stock of the Company and certain events in which Pamela G. Marrone, Ph.D. ceases to serve as the Company’s Chief Executive Officer. Upon an event of default, the entire principal and interest may be declared immediately due and payable. As of March 31, 2016, the Company was in compliance with its covenants under the August 2015 Senior Secured Promissory Notes. The Tremont Group, Inc. Les Lyman, a former member of the Company’s board of directors, is the chairman and significant indirect shareholder of The Tremont Group, Inc. In January 2016, Les Lyman resigned from the Company’s board of directors effective January 4, 2016. Accordingly, revenue recognized for sales to The Tremont Group, Inc. subsequent to January 4, 2016 were not included in related party revenues, and no revenues were recognized for such sales during the three months ended March 31, 2016. For the three months ended March 31, 2015, related party revenue of $199,000 was recognized on a sell-through basis relating to product purchased by The Tremont Group, Inc. that was resold by the Tremont Group, Inc. during the period. As of March 31, 2016, the Company had no outstanding accounts receivable due from The Tremont Group, Inc. As of December 31, 2015, the Company recorded deferred cost of product revenues of $79,000 and current deferred product revenues of $168,000 relating to product sold to The Tremont Group, Inc. where title transferred but the criteria for revenue recognition has not been met. |
Significant Accounting Polici18
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial information as of March 31, 2016, and for the three months ended March 31, 2016 and 2015, has been prepared by the Company, without audit, in accordance with generally accepted accounting principles in the United States (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The information included in this Quarterly Report on Form 10-Q should be read in connection with the consolidated financial statements and accompanying notes included in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2015. In the opinion of management, the condensed consolidated financial statements as of March 31, 2016, and for the three months ended March 31, 2016 and 2015, reflect all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations, comprehensive loss and cash flows. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the 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. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid financial instruments purchased with a maturity of three months or less to be cash equivalents. Cash and cash equivalents consists of cash on deposit, money market funds and certificates of deposit accounts with United States (“U.S.”) financial institutions. The Company is exposed to credit risk in the event of default by financial institutions to the extent that cash and cash equivalents balances with financial institutions are in excess of amounts that are insured by the Federal Deposit Insurance Corporation. The Company has not experienced any losses on these deposits. |
Restricted Cash | Restricted Cash The Company’s restricted cash consists of cash that the Company is contractually obligated to maintain in accordance with the terms of its June 2014 Secured Promissory Note and the terms of its August 2015 Senior Secured Promissory Notes. See Notes 6 and 9, respectively, for further discussion. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash, cash equivalents, accounts receivable and debt. The Company deposits its cash and cash equivalents with high credit quality domestic financial institutions with locations in the U.S. Such deposits may exceed federal deposit insurance limits. The Company believes the financial risks associated with these financial instruments are minimal. The Company’s customer base is dispersed across many different geographic areas, and currently most customers are pest management distributors in the U.S. Generally, receivables are due up to 120 days from the invoice date and are considered past due after this date, although the Company may offer extended terms from time to time. For the three months ended March 31, 2016 and 2015, 9% and 2%, respectively, of the Company’s revenues were generated from international customers. The Company’s principal sources of revenues are its Regalia and Grandevo product lines. These two product lines accounted for 80% and 97% of the Company’s total revenues for the three months ended March 31, 2016 and 2015, respectively. Customers to which 10% or more of the Company’s total revenues are attributable for any one of the periods presented consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C CUSTOMER D CUSTOMER E CUSTOMER F (1) For the three months ended March 31, 2016 24% 13% 13% 3% 5% — 2015 17% 4% 4% 24% 14% 10% (1) Represents revenues from related parties. See Note 9 for further discussion. Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2016 or December 31, 2015 consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C March 31, 2016 31% 10% 4% December 31, 2015 32% 29% 12% |
Concentrations of Supplier Dependence | Concentrations of Supplier Dependence The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company’s single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. A disruption at this supplier’s manufacturing site or a disruption in trade between the U.S. and China could negatively impact sales of Regalia. The Company currently uses one supplier and does not have a long-term supply contract with this supplier. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price. |
Inventories | Inventories Inventories are stated at the lower of cost or market value (net realizable value or replacement cost) and include the cost of material and external and internal labor and manufacturing costs. Cost is determined on the first-in, first-out basis. The Company provides for inventory reserves when conditions indicate that the selling price may be less than cost due to physical deterioration, obsolescence, changes in price levels or other factors. Additionally, the Company provides reserves for excess and slow-moving inventory on hand that is not expected to be sold to reduce the carrying amount of excess and slow-moving inventory to its estimated net realizable value. The reserves are based upon estimates about future demand from the Company’s customers and distributors and market conditions. |
Deferred Cost of Product Revenues | Deferred Cost of Product Revenues Deferred cost of product revenues are stated at the lower of cost or net realizable value and include product sold where title has transferred but the criteria for revenue recognition have not been met. As of March 31, 2016 and December 31, 2015, the Company recorded deferred cost of product revenues of $2,232,000 and $1,596,000, respectively, including deferred cost of product revenues to related parties of $79,000 as of December 31, 2015. As of March 31, 2016, there were no deferred cost of product revenues to related parties. |
Revenue Recognition | Revenue Recognition The Company recognizes revenues when persuasive evidence of an arrangement exists, transfer of title has occurred or services have been rendered, the price is fixed or determinable and collectability is reasonably assured. If contractual obligations, acceptance provisions or other contingencies exist which indicate that the price is not fixed or determinable, revenue is recognized after such obligations or provisions are fulfilled or expire. Product revenues consist of revenues generated from sales of the Company’s products to distributors and direct customers, net of rebates and cash discounts. For sales of products made to distributors, the Company recognizes revenue either on a sell-in or sell-through basis depending on the specific facts and circumstances of the transaction(s) with the distributor. Factors considered include, but are not limited to, whether the payment terms offered to the distributor are structured to correspond to when product is resold, the distributor history of adhering to the terms of its contractual arrangements with the Company, whether the Company has a pattern of granting concessions for the benefit of the distributor and whether there are other conditions that may indicate that the sale to the distributor is not substantive. In some cases, the Company recognizes distributor revenue as title and risk of loss passes, provided all other revenue recognition criteria have been satisfied (the “sell-in” method). For certain sales to certain distributors, the revenue recognition criteria for distributor sales are not satisfied at the time title and risk of loss passes to the distributor; specifically, in instances where “inventory protection” arrangements were offered to distributors that permitted these distributors to return to the Company certain unsold products, the Company considers the arrangement not to be fixed or determinable, and accordingly, revenue is deferred until products are resold to customers of the distributor (the “sell-through” method). As of March 31, 2016 and December 31, 2015, the Company recorded current deferred product revenues of $4,069,000 and $2,760,000, respectively, including current deferred product revenues from related parties of $168,000 as of December 31, 2015. There were no current deferred product revenues from related parties as of March 31, 2016. The cost of product revenues associated with such deferral are also deferred and classified as deferred cost of product revenues in the consolidated balance sheets. Cash received from customers related to delivered product that may not represent a true sale is classified as customer refund liabilities in the consolidated balance sheets and the related cost of inventory remains in inventory in the consolidated balance sheets until the product is returned or is resold to customers of the distributor and revenue is recognized. During the three months ended March 31, 2016 and 2015, 44% and 32%, respectively, of total revenues were recognized on a sell-through basis. From time to time, the Company offers certain product rebates to its distributors and growers, which are estimated and recorded as reductions to product revenues, and an accrued liability is recorded at the later of when the revenues are recorded or the rebate is being offered. The Company recognizes license revenues pursuant to strategic collaboration and distribution agreements under which the Company receives payments for the achievement of certain testing validation, regulatory progress and commercialization events. As these activities and payments are associated with exclusive rights that the Company provides in connection with strategic collaboration and distribution agreements over the term of the agreements, revenues related to the payments received are deferred and recognized over the term of the exclusive distribution period of the respective agreement. For the three months ended March 31, 2015, the Company received payments totaling $750,000 under these agreements. No payments were received under these agreements for the three months ended March 31, 2016. As of March 31, 2016, an additional $300,000 was included in accounts receivable. For the three months ended March 31, 2016 and 2015, the Company recognized $92,000 and $83,000, respectively, as license revenues. As of March 31, 2016, the Company recorded current and non-current deferred revenues of $327,000 and $1,929,000, respectively, related to payments received under these agreements. As of December 31, 2015, the Company recorded current and non-current deferred revenues of $327,000 and $2,021,000, respectively, related to payments received under these agreements. |
Research, Development and Patent Expenses | Research, Development and Patent Expenses Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended March 31, 2016 and 2015, research and development expenses totaled $2,066,000 and $3,115,000, respectively, and patent expenses totaled $256,000 and $307,000, respectively. |
Net Loss per Share | Net Loss per Share Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of the potential common stock equivalents, which consist of stock options and warrants to purchase common stock, are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands): MARCH 31, 2016 2015 Stock options outstanding 2,839 2,663 Warrants to purchase common stock 4,027 145 Restricted stock units outstanding 171 — |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In April 2015, the FASB issued Accounting Standards Update No. 2015-03, Interest—Imputation of Interest (Topic 835-30): Simplifying the Presentation of Debt Issuance Costs |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) Leases: Amendments to the FASB Accounting Standards Codifications In January 2016, the FASB issued Accounting Standards Update 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities In November 2015, the FASB issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory In August 2014, the FASB issued Accounting Standards Update No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) |
Reclassifications | Reclassifications Certain prior period balances in the consolidated balance sheets have been reclassified to conform to the current year presentation. Such reclassifications had no impact on net income, cash flows or shareholders’ equity previously reported. As a result of Adopting ASU 2015-03, the Company retrospectively reclassified certain debt issuance costs as of December 31, 2015. Prepaid expenses and other current assets in the amount of $104,000 and other assets in the amount of $462,000 were reclassified. These amounts were reclassified as a $23,000 discount to debt, current portion, a $267,000 discount to debt, less current portion and $276,000 discount to long-term debt, due to related party. |
Fair Value Measurements | Accounting Standards Codification (“ASC”) 820, Fair Value Measurements ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three tier value hierarchy, which prioritizes inputs that may be used to measure fair value as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The following table presents the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 (in thousands): MARCH 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,750 $ 3,750 $ — $ — DECEMBER 31, 2015 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,750 $ 3,750 $ — $ — The Company’s money market funds are held at registered investment companies. As of March 31, 2016 and December 31, 2015, the money market funds were in active markets and, therefore, are measured based on the Level 1 valuation hierarchy. |
Significant Accounting Polici19
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of Risk Percentage | Customers to which 10% or more of the Company’s total revenues are attributable for any one of the periods presented consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C CUSTOMER D CUSTOMER E CUSTOMER F (1) For the three months ended March 31, 2016 24% 13% 13% 3% 5% — 2015 17% 4% 4% 24% 14% 10% (1) Represents revenues from related parties. See Note 9 for further discussion. Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2016 or December 31, 2015 consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C March 31, 2016 31% 10% 4% December 31, 2015 32% 29% 12% |
Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share | The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands): MARCH 31, 2016 2015 Stock options outstanding 2,839 2,663 Warrants to purchase common stock 4,027 145 Restricted stock units outstanding 171 — |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Assets and Liabilities Measured at Fair Value on Recurring Basis | The following table presents the Company’s financial assets measured at fair value on a recurring basis as of March 31, 2016 and December 31, 2015 (in thousands): MARCH 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,750 $ 3,750 $ — $ — DECEMBER 31, 2015 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,750 $ 3,750 $ — $ — |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net consist of the following (in thousands): MARCH 31, DECEMBER 31, 2016 2015 Raw materials $ 4,378 $ 5,110 Work in progress 1,075 1,044 Finished goods 3,107 2,910 $ 8,560 $ 9,064 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): MARCH 31, DECEMBER 31, Accrued compensation $ 1,004 $ 999 Accrued severance 131 209 Accrued warranty costs 503 384 Accrued legal costs 1,424 915 Accrued SEC civil penalty (Note 8) — 1,750 Accrued liabilities, other 1,572 1,432 $ 4,634 $ 5,689 |
Schedule of Changes in Accrued Warranty Costs | Changes in the Company’s accrued warranty costs during the period are as follows (in thousands): Balance at December 31, 2015 $ 384 Warranties issued during the period 121 Settlements made during the period (2 ) Balance at March 31, 2016 $ 503 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Including Debt to Related Parties | Debt, including debt due to related parties, consists of the following (in thousands): March 31, December 31, Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 18.00% per annum, payable monthly through October 2017, collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of March 31, 2016 and December 31, 2015 of $42 and $48, respectively, discount is based on imputed interest rate of 18.1% $ 12,408 $ 12,402 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (5.5% as of March 31, 2016) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2016 and December 31, 2015 of $264 and $270, respectively, discount is based on imputed interest rate of 5.6% 9,292 9,351 Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest is payable biannually with principal payments due in increments at three, four and five years from the closing date, collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of March 31, 2016 and December 31, 2015 of $4,201 and $4,488, respectively debt dscount is based on imputed interest rate of 10.9% (see Note 9) 35,799 35,512 Debt, including debt due to related parties 57,499 57,265 Less debt due to related parties (35,799 ) (35,512 ) Less current portion (242 ) (244 ) $ 21,458 $ 21,509 |
Consideration Received, Fair Values of Notes, Common Stock Warrants Issued and Calculation of the Gain on Extinguishment of Debt | The following table shows the consideration received, fair values of the notes and common stock warrants issued and calculation of the gain on extinguishment of debt for the $3,750,000 Notes (in thousands): Consideration received Fair value of October 2012 Subordinated Convertible Note $ 1,360 Cash 2,500 Total consideration received (a) $ 3,860 Notes and warrants issued Principal balance of notes issued $ 3,750 Debt discount (1) (291 ) Fair value of notes issued 3,459 Fair value of Additional Common Stock Warrants issued 352 Total fair value of notes and warrants issued (b) $ 3,811 Gain on extinguishment of debt (a—b) $ 49 (1) The amortization of this account is being recorded in interest expense in the consolidated statements of operations over the term of the arrangement. |
Share-Based Plans (Tables)
Share-Based Plans (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Restricted Stock Units (RSUs) [Member] | |
Summary of Restricted Stock Units Activity | The following table summarizes the activity of restricted stock units from December 31, 2015 to March 31, 2016 (in thousands, except weighted average grant date fair value): WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Nonvested at December 31, 2015 45 $ 1.23 Granted 81 1.06 Vested (23 ) 1.23 Forfeited (7 ) 1.23 Nonvested at March 31, 2016 96 $ 1.09 |
Summary of Business, Basis of25
Summary of Business, Basis of Presentation and Liquidity - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
Mar. 31, 2016 | Dec. 31, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Date of incorporation | Jun. 15, 2006 | |||
Accumulated deficit | $ (212,852,000) | $ (203,576,000) | ||
Working capital | 14,653,000 | |||
Cash and cash equivalents | 9,824,000 | 19,838,000 | $ 22,352,000 | $ 35,324,000 |
Debt excluding related parties | 21,700,000 | |||
Debt due to related parties | 35,799,000 | $ 35,512,000 | ||
Restricted cash | $ 18,416,000 | |||
Debt agreements financial and non-financial covenants | As of March 31, 2016, the Company had an accumulated deficit of $212,852,000, has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future. The Company has funded operations primarily with net proceeds from public offerings of common stock, private placements of convertible preferred stock, convertible notes, and promissory notes and term loans, as well as with the proceeds from the sale of its products and payments under strategic collaboration and distribution agreements and government grants. The Company will need to generate significant revenue growth to achieve and maintain profitability. As of March 31, 2016, the Company had working capital of $14,653,000, including cash and cash equivalents of $9,824,000. In addition, as of March 31, 2016, the Company had debt and debt due to related parties of $21,700,000 and $35,799,000, respectively, for which the underlying debt agreements contain various financial and non-financial covenants, as well as certain material adverse change clauses. If the Company breaches any of the covenants contained within the debt agreements or if the material adverse change clauses are triggered, the entire unpaid principal and interest balances would be due and payable upon demand. In addition, as of March 31, 2016, the Company had a total of $18,416,000 of restricted cash relating to these debt agreements (see Notes 6 and 9). | |||
Cash balance requirement in promissory note | $ 15,000,000 |
Significant Accounting Polici26
Significant Accounting Policies - Additional Information (Detail) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Significant Accounting Policies [Line Items] | |||
Concentration risk, supplier | The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company’s single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. A disruption at this supplier’s manufacturing site or a disruption in trade between the U.S. and China could negatively impact sales of Regalia. The Company currently uses one supplier and does not have a long-term supply contract with this supplier. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price. | ||
Deferred cost of product revenues | $ 2,232,000 | $ 1,596,000 | |
Deferred cost of product revenues to related parties | 0 | 79,000 | |
Current deferred product revenues | $ 4,396,000 | 2,919,000 | |
Current deferred product revenues from related parties | 168,000 | ||
Percentage of total revenue recognized on sell-through basis | 44.00% | 32.00% | |
Deferred payments received | $ 0 | $ 750,000 | |
Received payments, included in accounts receivable | 300,000 | ||
Recognized license revenues | 92,000 | 83,000 | |
Non-current deferred revenues | 1,929,000 | 2,021,000 | |
Research and development expenses | 2,066,000 | 3,115,000 | |
Patent expenses | 256,000 | $ 307,000 | |
Prepaid expenses and other current assets | 930,000 | 1,211,000 | |
Other assets | 284,000 | 284,000 | |
Accounting Standards Update 201503 [Member] | |||
Significant Accounting Policies [Line Items] | |||
Prepaid expenses and other current assets | 104,000 | ||
Other assets | 462,000 | ||
Discount to debt, current portion | 23,000 | ||
Discount to debt, less current portion | 267,000 | ||
Discount to long-term debt, due to related party | 276,000 | ||
Strategic collaboration and distribution agreements [Member] | |||
Significant Accounting Policies [Line Items] | |||
Current deferred product revenues | 327,000 | 327,000 | |
Non-current deferred revenues | $ 1,929,000 | 2,021,000 | |
Sales revenue, net [Member] | Customer concentration risk [Member] | International [Member] | |||
Significant Accounting Policies [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 9.00% | 2.00% | |
Sales revenue, net [Member] | Product concentration risk [Member] | |||
Significant Accounting Policies [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 80.00% | 97.00% | |
Revenue Recognition [Member] | |||
Significant Accounting Policies [Line Items] | |||
Current deferred product revenues | $ 4,069,000 | 2,760,000 | |
Current deferred product revenues from related parties | $ 0 | $ 168,000 | |
Maximum [Member] | |||
Significant Accounting Policies [Line Items] | |||
Receivables due period | 120 days |
Significant Accounting Polici27
Significant Accounting Policies - Schedule of Risk Percentage (Detail) - Customer concentration risk [Member] | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Customer A [Member] | Sales revenue, net [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 24.00% | 17.00% | |
Customer A [Member] | Accounts receivable [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 31.00% | 32.00% | |
Customer B [Member] | Sales revenue, net [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 13.00% | 4.00% | |
Customer B [Member] | Accounts receivable [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 10.00% | 29.00% | |
Customer C [Member] | Sales revenue, net [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 13.00% | 4.00% | |
Customer C [Member] | Accounts receivable [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 4.00% | 12.00% | |
Customer D [Member] | Sales revenue, net [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 3.00% | 24.00% | |
Customer E [Member] | Sales revenue, net [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 5.00% | 14.00% | |
Customer F [Member] | Sales revenue, net [Member] | |||
Concentration Risk [Line Items] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 10.00% |
Significant Accounting Polici28
Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Restricted Stock Units (RSUs) [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 171 | |
Stock options outstanding [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 2,839 | 2,663 |
Warrants to purchase common stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 4,027 | 145 |
Fair Value Measurements - Measu
Fair Value Measurements - Measured at Fair Value on Recurring Basis (Detail) - Money market funds [Member] - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Assets | ||
Assets at fair value | $ 3,750 | $ 3,750 |
Level 1 [Member] | ||
Assets | ||
Assets at fair value | 3,750 | 3,750 |
Level 2 [Member] | ||
Assets | ||
Assets at fair value | 0 | 0 |
Level 3 [Member] | ||
Assets | ||
Assets at fair value | $ 0 | $ 0 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories, Net (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,378 | $ 5,110 |
Work in progress | 1,075 | 1,044 |
Finished goods | 3,107 | 2,910 |
Inventories, total | $ 8,560 | $ 9,064 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Disclosure [Abstract] | ||
Reserves against inventories | $ 152,000 | $ 24,000 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 1,004 | $ 999 |
Accrued severance | 131 | 209 |
Accrued warranty costs | 503 | 384 |
Accrued legal costs | 1,424 | 915 |
Accrued SEC civil penalty (Note 12) | 1,750 | |
Accrued liabilities, other | 1,572 | 1,432 |
Accrued liabilities, total | $ 4,634 | $ 5,689 |
Accrued Liabilities - Additiona
Accrued Liabilities - Additional Information (Detail) - USD ($) | 1 Months Ended | ||
Aug. 31, 2015 | Mar. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Accrued Liabilities [Line Items] | |||
Accrued severance expenses | $ 131,000 | $ 209,000 | |
James Iademarco [Member] | |||
Schedule Of Accrued Liabilities [Line Items] | |||
One-twelfth of prior base salary | $ 290,000 | ||
Salary rate entitlement | 8.3333% | ||
Mr. Iademarco Separation Agreement [Member] | |||
Schedule Of Accrued Liabilities [Line Items] | |||
Accrued severance expenses | $ 131,000 |
Accrued Liabilities - Schedul34
Accrued Liabilities - Schedule of Changes in Accrued Warranty Costs (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Payables and Accruals [Abstract] | |
Beginning Balance | $ 384 |
Warranties issued during the period | 121 |
Settlements made during the period | (2) |
Ending Balance | $ 503 |
Debt - Schedule of Debt Includi
Debt - Schedule of Debt Including Debt Due to Related Parties (Detail) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Debt | $ 57,499 | $ 57,265 |
Debt due to related parties | 35,799 | 35,512 |
Less current portion | (242) | (244) |
Debt, less current portion | 21,458 | 21,509 |
Debt | 57,499 | 57,265 |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 12,408 | 12,402 |
Debt | 12,408 | 12,402 |
Secured Debt [Member] | June 2014 Secured Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Debt | 9,292 | 9,351 |
Debt | 9,292 | 9,351 |
Secured Debt [Member] | August 2015 Senior Secured Promissory Notes [Member] | ||
Debt Instrument [Line Items] | ||
Debt due to related parties | $ 35,799 | $ 35,512 |
Debt - Schedule of Debt Inclu36
Debt - Schedule of Debt Including Debt Due to Related Parties (Parenthetical) (Detail) - Secured Debt [Member] - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2014 | Mar. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | |
October 2012 and April 2013 Secured Promissory Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 18.00% | 18.00% | 18.00% | |
Debt instrument, payment terms | Payable monthly through October 2017 | |||
Unamortized debt discount | $ 42 | $ 48 | ||
Debt instrument, imputed interest rate | 18.10% | 18.10% | ||
June 2014 Secured Promissory Note [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, prime rate | 2.00% | 2.00% | ||
Debt instrument, interest rate | 5.50% | |||
Debt instrument, payment terms | Payable monthly through June 2036 | |||
Unamortized debt discount | $ 264 | $ 270 | ||
Debt instrument, imputed interest rate | 5.60% | 5.60% | ||
August 2015 Senior Secured Promissory Notes [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, interest rate | 8.00% | |||
Debt instrument, payment terms | Payable biannually with principal payments due in increments at three, four and five years from the closing date | |||
Unamortized debt discount | $ 4,201 | $ 4,488 | ||
Debt instrument, imputed interest rate | 10.90% | 10.90% |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | Jun. 14, 2013 | Apr. 10, 2013 | Oct. 02, 2012 | Sep. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Apr. 30, 2013 | Mar. 31, 2016 | Dec. 31, 2015 | Aug. 31, 2015 | Apr. 28, 2014 | Apr. 14, 2014 |
Debt Instrument [Line Items] | ||||||||||||
Agent fee percentage | 5.00% | |||||||||||
Additional credit facility financing-related costs and primarily legal fees | $ 24,000 | $ 304,000 | ||||||||||
Exercise price of the Common Stock Warrants | $ 8.40 | |||||||||||
Accrued interest on promissory notes | 74,000 | |||||||||||
Warrants exercise price percentage | 70.00% | |||||||||||
Exercise price of warrants as percentage of common stock | 70.00% | |||||||||||
Common stock warrants issued to purchase common stock percentage | 20.00% | |||||||||||
Fair value of common stock warrants on issuance | 465,000 | |||||||||||
Gain on extinguishment of debt | $ 49,000 | |||||||||||
Funds borrowed | $ 3,700,000 | |||||||||||
Fair value of the Warrants at the date of issuance as deferred financing cost | $ 435,000 | |||||||||||
Repayment of line of credit | $ 4,687,000 | |||||||||||
Required deposit balance | 16,560,000 | $ 16,560,000 | ||||||||||
Restricted cash, current portion | $ 1,856,000 | 1,856,000 | ||||||||||
Prepay percentage of outstanding principal loan | 20.00% | |||||||||||
Prepayment fee percentage | 10.00% | |||||||||||
Exceed percentage of principal payment | 20.00% | |||||||||||
Decrease percentage of prepayment fee | 1.00% | |||||||||||
Loan term for repayment | 10 years | |||||||||||
Current ratio | 125.00% | |||||||||||
Debt to worth ratio | 400.00% | |||||||||||
Percentage of loan to value ratio | 70.00% | |||||||||||
Level 3 [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Fair value of debt | $ 23,220,000 | $ 23,457,000 | ||||||||||
Level 3 [Member] | Fixed rate debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Estimated market rate of interest | 11.25% | 11.25% | ||||||||||
June 2013 credit facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Additional credit facility financing-related costs and primarily legal fees | $ 10,000 | |||||||||||
Line of credit facility maximum borrowing limit | $ 7,000,000 | |||||||||||
Credit facility expiry date | Jun. 30, 2014 | |||||||||||
Credit facility accrued interest | 10.00% | |||||||||||
Credit facility fee paid | 2.00% | |||||||||||
Revolving line of credit [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Line of credit facility maximum borrowing limit | $ 5,000,000 | $ 3,000,000 | ||||||||||
Maximum [Member] | June 2013 credit facility [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount permit to draw | $ 5,000,000 | |||||||||||
Common stock warrants [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt discount | 113,000 | |||||||||||
June 2013 warrants [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Value of common stock in a sale of the Company or a qualified initial public offering | 70.00% | |||||||||||
Exercise price of the Common Stock Warrants | $ 8.40 | |||||||||||
Warrants expire date | Jun. 14, 2023 | |||||||||||
June 2013 warrants [Member] | Common stock warrants [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Common stock warrants issued to purchase common stock percentage | 10.00% | |||||||||||
August 2015 Senior Secured Promissory Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, covenant compliance | As of December 31, 2014, the Company was in breach of certain of its covenants under the loan agreement as a result of its annual and quarterly reports not being filed within the prescribed time period and its being in breach of covenants on the October 2012 and April 2013 Secured Promissory Notes described above. In addition, effective September 30, 2015, the Company’s debt-to-worth ratio was greater than 4.0-to-1.0 as a result of the issuance of $40,000,000 in promissory notes in August 2015 as described in Note 15, which increased the Company’s debt while the Company continued to incur net losses, which decreased stockholders’ equity. However, in November 2015, the Company received a waiver from the Lender with respect to compliance with the requirements to (i) deliver annual financial statements (extended to November 15, 2015), (ii) maintain a current ratio greater than 1.25-to-1.0 (extended to December 31, 2015) and (iii) maintain a debt-to-worth ratio less than 4.0-to-1.0 (extended to December 31, 2016). The receipt of this waiver and the delivery of annual financial statements within the timeline prescribed in the waiver and the extension under the October 2012 and April 2013 Secured Promissory Notes cured the Company of being in breach of the covenants under the loan agreement. | |||||||||||
Debt instrument issued, principal amount | $ 40,000,000 | |||||||||||
Secured Debt [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt issued in partial consideration, cash | 3,700,000 | |||||||||||
Secured Debt [Member] | October 2012 Secured Promissory Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument borrowing amount | $ 7,500,000 | |||||||||||
Debt instrument borrowing terms | The October 2012 Secured Promissory Notes have an initial term of three years and can be extended for an additional two years in one year increments at the option of the Company. During the initial three-year term, the October 2012 Secured Promissory Notes bear interest at 12% per annum. Interest on the October 2012 Secured Promissory Notes is payable monthly through the initial maturity date of the loan, which is October 2, 2015, or through any extension period. The principal and all unpaid interest are due on the maturity date, as may be extended. | |||||||||||
Agent fee percentage | 7.00% | 5.00% | ||||||||||
Additional fee percentage | 1.00% | |||||||||||
Unpaid Agent Fee | $ 261,000 | |||||||||||
Warrants issued to purchase common stock funded principal percentage | 15.00% | |||||||||||
Value of common stock in a sale of the Company or a qualified initial public offering | 70.00% | |||||||||||
Fair value of Common Stock Warrants | $ 282,000 | |||||||||||
Exercise price of the Common Stock Warrants | $ 8.40 | |||||||||||
Secured Debt [Member] | October 2012 Secured Promissory Notes [Member] | Minimum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Covenant requirements minimum cash balance | $ 5,000,000 | |||||||||||
Amount borrowed under amended loan agreement | 7,500,000 | |||||||||||
Secured Debt [Member] | October 2012 Secured Promissory Notes [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Additional debt cash balance | $ 2,000,000 | |||||||||||
Increase in amount available under loan agreement | 5,000,000 | |||||||||||
Secured Debt [Member] | October 2012 Secured Promissory Notes [Member] | Debt instrument maturity period year three [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, interest rate | 12.00% | |||||||||||
Secured Debt [Member] | April 2013 secured promissory note [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Unpaid Agent Fee | $ 172,000 | |||||||||||
Fees amount | 683,000 | |||||||||||
Additional credit facility financing-related costs and primarily legal fees | 66,000 | |||||||||||
Additional debt issued under amendment | 4,950,000 | |||||||||||
Debt issued in cash consideration and in partial conversion for cancellation of principal balance | 1,250,000 | |||||||||||
Convertible debt, fair value | 3,459,000 | |||||||||||
Debt instrument, additional borrowings | 2,500,000 | |||||||||||
Promissory notes issued | 3,750,000 | |||||||||||
Fair value of Additional Common Stock Warrants issued | 352,000 | 352,000 | ||||||||||
Funds borrowed | $ 4,950,000 | |||||||||||
Secured Debt [Member] | April 2013 secured promissory note [Member] | Maximum [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Amount borrowed under amended loan agreement | 12,450,000 | |||||||||||
Secured Debt [Member] | October 2012 subordinated convertible note [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Convertible debt instrument, face value | 1,250,000 | |||||||||||
Convertible debt, fair value | $ 1,360,000 | $ 1,360,000 | ||||||||||
Secured Debt [Member] | June 2014 Secured Promissory Note [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument borrowing amount | $ 10,000,000 | |||||||||||
Debt instrument, interest rate | 5.50% | |||||||||||
Debt instrument, maturity date | Jun. 30, 2036 | |||||||||||
Prime rate | 3.50% | |||||||||||
Debt instrument, prime rate | 2.00% | 2.00% | ||||||||||
Debt instrument description | Promissory note ("June 2014 Secured Promissory Note") with the bank ("Lender") which bears interest at prime rate (3.5% as of December 31, 2015) plus 2.00% per annum | |||||||||||
Minimum rate of interest | 5.25% | |||||||||||
Debt instrument monthly payment | $ 64,390 | |||||||||||
Debt instrument date of payment | Jul. 31, 2014 | |||||||||||
Required deposit balance | $ 1,560,000 | |||||||||||
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, interest rate | 18.00% | 18.00% | 18.00% | |||||||||
Debt instrument, maturity date | Oct. 2, 2017 | |||||||||||
Secured Debt [Member] | August 2015 Senior Secured Promissory Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | ||||||||||||
Debt Instrument [Line Items] | ||||||||||||
Debt instrument, covenant compliance | As of December 31, 2014, the Company was in breach of its covenants under the October 2012 and April 2013 Secured Promissory Notes as a result of its failure to provide annual financial statements in a timely manner and as the Company was in breach of certain of its covenants under its June 2014 Secured Promissory Note as described below. However, in November 2015, the Company received an extension from the lending agent with respect to compliance with the requirements to deliver annual financial statements to the earlier of (i) November 15, 2015 or (ii) such time such financial statements are filed with the SEC. The covenant breach was cured in November 2015 as a result of delivering annual financial statements within the timeline prescribed in the extension and the waiver of certain of the Company’s covenants with respect to the June 2014 Secured Promissory Note |
Debt - Consideration Received,
Debt - Consideration Received, Fair Values of Notes, Common Stock Warrants Issued and Calculation of the Gain on Extinguishment of Debt (Detail) - USD ($) | Apr. 10, 2013 | Apr. 30, 2013 |
Consideration received | ||
Total consideration received | $ 3,860,000 | |
Notes and warrants issued | ||
Total fair value of notes and warrants issued | 3,811,000 | |
Gain on extinguishment of debt | 49,000 | |
Secured Debt [Member] | October 2012 subordinated convertible note [Member] | ||
Consideration received | ||
Fair value of notes | $ 1,360,000 | 1,360,000 |
Notes and warrants issued | ||
Fair value of notes | 1,360,000 | 1,360,000 |
Secured Debt [Member] | April 2013 secured promissory note [Member] | ||
Consideration received | ||
Fair value of notes | 3,459,000 | |
Cash | 2,500,000 | |
Notes and warrants issued | ||
Principal balance of notes issued | 3,750,000 | |
Debt discount | (291,000) | |
Fair value of notes | 3,459,000 | |
Fair value of Additional Common Stock Warrants issued | $ 352,000 | $ 352,000 |
Share-Based Plans - Additional
Share-Based Plans - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options outstanding | 171,000 | |
Share-based awards available for grant | 2,539,000 | |
Share-based compensation expense | $ 617 | $ 1,090 |
Number of options granted | 863,000 | |
Number of options exercised | 37,000 | |
Weighted average exercise price granted | $ 1.22 | |
Weighted average exercise price exercised | $ 0.43 | |
Restricted Stock Units (RSUs) [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of restricted stock units outstanding | 2,839,000 |
Share-Based Plans - Summary of
Share-Based Plans - Summary of Restricted Stock Units Activity (Detail) - Restricted Stock Units (RSUs) [Member] shares in Thousands | 3 Months Ended |
Mar. 31, 2016$ / sharesshares | |
Schedule Of Activity Related To Restricted Shares And Restricted Share [Line Items] | |
Shares outstanding, Beginning balance | shares | 45 |
Shares outstanding, Granted | shares | 81 |
Shares outstanding, Vested | shares | (23) |
Shares outstanding, Forfeited | shares | (7) |
Shares outstanding, Ending balance | shares | 96 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 1.23 |
Weighted average grant date fair value, Granted | $ / shares | 1.06 |
Weighted average grant date fair value, Vested | $ / shares | 1.23 |
Weighted average grant date fair value, Forfeited | $ / shares | 1.23 |
Weighted average grant date fair value, Ending balance | $ / shares | $ 1.09 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Jan. 19, 2016USD ($)ft² | Apr. 30, 2014USD ($)ft² | Sep. 30, 2013USD ($)ft² | Mar. 31, 2016USD ($)ft² | Dec. 31, 2014USD ($) |
Commitments and Contingencies [Line Items] | |||||
Commitment and contingencies civil penalty amount | $ | $ 1,750,000 | $ 1,750,000 | |||
California [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Percentage of annual increase in base rent | 5.00% | ||||
Area of vacant office space subleased | ft² | 3,800 | ||||
Sublease description | The initial term of the sublease is for a period of approximately 43 months and commenced on February 1, 2016. The monthly base rent is approximately $5,000 per month for the first 12 months with a 5% increase each year thereafter. | ||||
Sublease term | 43 months | ||||
Sublease agreement, monthly base rent | $ | $ 5,000 | ||||
Non-contiguous office space [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Office facility lease agreement | ft² | 24,500 | ||||
Non-contiguous office space [Member] | Minimum [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Leased office facilities expiration period | Feb. 28, 2014 | ||||
Non-contiguous office space [Member] | Maximum [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Leased office facilities expiration period | Oct. 31, 2016 | ||||
Office and laboratory space one [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Office facility lease agreement | ft² | 27,300 | ||||
Lease agreement period | 60 months | ||||
Monthly base rent | $ | $ 44,000 | ||||
Initial base rent term | 12 months | ||||
Percentage of annual increase in base rent | 3.00% | ||||
Lease start date | Sep. 30, 2013 | ||||
Lease commenced date | Aug. 31, 2014 | ||||
Office and laboratory space two [Member] | |||||
Commitments and Contingencies [Line Items] | |||||
Office facility lease agreement | ft² | 17,400 | ||||
Monthly base rent | $ | $ 28,000 | ||||
Initial base rent term | 60 months | ||||
Percentage of annual increase in base rent | 3.00% |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | Aug. 20, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | Apr. 10, 2013 |
Related Party Transaction [Line Items] | |||||
Debt due to related parties | $ 35,799,000 | $ 35,512,000 | |||
Accrued interest due to related parties | 804,000 | 1,175,000 | |||
Restricted cash and cash equivalents under covenants | 16,560,000 | 16,560,000 | |||
Additional credit facility financing-related costs and primarily legal fees | $ 304,000 | $ 24,000 | |||
Warrants exercise price | $ 8.40 | ||||
Deferred cost of product revenues to related parties | $ 0 | 79,000 | |||
Current deferred product revenues from related parties | 168,000 | ||||
Revenue recognized on sell-through basis relating to product purchased | $ 199,000 | ||||
August 2015 Senior Secured Promissory Notes [Member] | Secured Debt [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument, interest rate | 8.00% | ||||
Debt due to related parties | $ 35,799,000 | 35,512,000 | |||
Unamortized debt discount | 4,201,000 | 4,488,000 | |||
Tremont Group, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Deferred cost of product revenues to related parties | 79,000 | ||||
Current deferred product revenues from related parties | $ 168,000 | ||||
Revenue recognized on sell-through basis relating to product purchased | 0 | $ 199,000 | |||
Outstanding accounts receivable due | $ 0 | ||||
Entities Affiliated with Waddell & Reed Financial, Inc. [Member] | |||||
Related Party Transaction [Line Items] | |||||
Affiliate revenues percent | 5.00% | ||||
Warrants exercise price | $ 1.91 | ||||
Warrants exercisable date | Aug. 20, 2023 | ||||
Entities Affiliated with Waddell & Reed Financial, Inc. [Member] | Maximum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Number of common shares to be purchased from warrants | 4,000,000 | ||||
Entities Affiliated with Waddell & Reed Financial, Inc. [Member] | August 2015 Senior Secured Promissory Notes [Member] | |||||
Related Party Transaction [Line Items] | |||||
Debt instrument to be issued, principal amount | $ 40,000,000 | ||||
Debt instrument, interest rate | 8.00% | ||||
Debt instrument, frequency of periodic payment of interest | Semi-annually | ||||
Debt instrument principal amount, payable three years | $ 10,000,000 | ||||
Debt instrument principal amount, payable four years | 10,000,000 | ||||
Debt instrument principal amount, payable five years | 20,000,000 | ||||
Debt due to related parties | $ 35,799,000 | ||||
Unamortized debt discount | 4,201,000 | ||||
Debt due to related parties, fair value | 36,650,000 | ||||
Accrued interest due to related parties | $ 804,000 | ||||
Additional credit facility financing-related costs and primarily legal fees | $ 302,000 | ||||
Minimum percentage of acquisition of beneficial ownership considered as event of default | 40.00% | ||||
Entities Affiliated with Waddell & Reed Financial, Inc. [Member] | August 2015 Senior Secured Promissory Notes [Member] | Secured Debt [Member] | |||||
Related Party Transaction [Line Items] | |||||
Fair value of Common Stock Warrants | $ 4,610,000 | ||||
Entities Affiliated with Waddell & Reed Financial, Inc. [Member] | August 2015 Senior Secured Promissory Notes [Member] | Minimum [Member] | |||||
Related Party Transaction [Line Items] | |||||
Restricted cash and cash equivalents under covenants | $ 15,000,000 | ||||
Entities Affiliated with Waddell & Reed Financial, Inc. [Member] | August 2015 Senior Secured Promissory Notes [Member] | Level 3 [Member] | |||||
Related Party Transaction [Line Items] | |||||
Estimated market rate of interest | 11.25% |