Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Mar. 26, 2018 | Jun. 30, 2017 | |
Document And Entity Information | |||
Entity Registrant Name | MARRONE BIO INNOVATIONS INC | ||
Entity Central Index Key | 1,441,693 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2017 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity a Well-known Seasoned Issuer | No | ||
Entity a Voluntary Filer | No | ||
Entity's Reporting Status Current | Yes | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Public Float | $ 28,325,332 | ||
Entity Common Stock, Shares Outstanding | 102,092,613 | ||
Trading Symbol | MBII | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2,017 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 786 | $ 9,609 |
Restricted cash, current portion | 487 | 1,444 |
Accounts receivable | 3,785 | 3,592 |
Inventories, net | 9,827 | 8,482 |
Deferred cost of product revenues | 3,063 | 2,688 |
Prepaid expenses and other current assets | 1,170 | 1,060 |
Total current assets | 19,118 | 26,875 |
Property, plant and equipment, net | 16,016 | 17,343 |
Restricted cash, less current portion | 1,560 | 1,560 |
Other assets | 219 | 205 |
Total assets | 36,913 | 45,983 |
Current liabilities: | ||
Accounts payable | 3,800 | 1,385 |
Accrued liabilities | 8,189 | 5,508 |
Accrued interest due to related parties | 1,622 | 1,618 |
Deferred revenue, current portion | 6,193 | 5,647 |
Derivative liability | 674 | |
Capital lease obligations, current portion | 839 | |
Debt, current portion | 1,524 | 252 |
Total current liabilities | 22,002 | 15,249 |
Deferred revenue, less current portion | 2,046 | 1,787 |
Debt, less current portion | 24,407 | 21,083 |
Debt due to related parties | 37,822 | 36,667 |
Other liabilities | 1,287 | 1,381 |
Total liabilities | 87,564 | 76,167 |
Commitments and contingencies (Note 11) | ||
Stockholders' deficit: | ||
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at December 31, 2017 and December 31, 2016 | ||
Common stock: $0.00001 par value; 250,000 shares authorized, 31,351 shares issued and outstanding as of December 31, 2017 and 24,661 as of December 31, 2016 | ||
Additional paid in capital | 214,921 | 204,463 |
Accumulated deficit | (265,572) | (234,647) |
Total stockholders' deficit | (50,651) | (30,184) |
Total liabilities and stockholders' deficit | $ 36,913 | $ 45,983 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | ||
Preferred stock, shares outstanding | ||
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 31,351,000 | 24,661,000 |
Common stock, shares outstanding | 31,351,000 | 24,661,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Revenues: | |||
Product | $ 17,935 | $ 13,715 | $ 8,976 |
License | 232 | 327 | 333 |
Related party | 492 | ||
Total revenues | 18,167 | 14,042 | 9,801 |
Cost of product revenues, including cost of product revenues to related parties of $0, $0 and $254 for the years ended December 31, 2017, 2016 and 2015, respectively | 10,528 | 9,522 | 9,256 |
Gross profit | 7,639 | 4,520 | 545 |
Operating Expenses: | |||
Research, development and patent | 10,820 | 9,670 | 13,500 |
Selling, general and administrative | 19,814 | 18,510 | 26,502 |
Total operating expenses | 30,634 | 28,180 | 40,002 |
Loss from operations | (22,995) | (23,660) | (39,457) |
Other income (expense): | |||
Interest income | 1 | 37 | 51 |
Interest expense | (3,374) | (2,941) | (2,764) |
Interest expense to related parties | (4,355) | (4,361) | (1,599) |
Change in estimated fair value of derivative liability | (96) | ||
Other income (expense), net | (106) | (146) | 41 |
Total other expense, net | (7,930) | (7,411) | (4,271) |
Loss before income taxes | (30,925) | (31,071) | (43,728) |
Income taxes | |||
Net loss | $ (30,925) | $ (31,071) | $ (43,728) |
Basic and diluted net loss per common share | $ (1.06) | $ (1.26) | $ (1.79) |
Weighted-average shares outstanding used in computing net loss per common share | 29,235,000 | 24,617,000 | 24,469,000 |
Consolidated Statements of Ope5
Consolidated Statements of Operations (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Cost of product revenues to related parties | $ 0 | $ 0 | $ 254 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | |||
Net loss | $ (30,925) | $ (31,071) | $ (43,728) |
Other comprehensive loss | |||
Comprehensive loss | $ (30,925) | $ (31,071) | $ (43,728) |
Consolidated Statements Stockho
Consolidated Statements Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock [Memeber] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2014 | $ 193,079 | $ (159,848) | $ 33,231 | |
Balance, shares at Dec. 31, 2014 | 24,465,000 | |||
Net loss | (43,728) | (43,728) | ||
Exercise of stock Options | 54 | 54 | ||
Exercise of stock Options, shares | 61,000 | |||
Share-based compensation | 3,811 | 3,811 | ||
Issuance of common stock warrants | 4,610 | 4,610 | ||
Issuance of common stock warrants, shares | ||||
Conversion of restricted stock units | ||||
Conversion of restricted stock units, shares | 10,000 | |||
Balance at Dec. 31, 2015 | 201,554 | (203,576) | (2,022) | |
Balance, shares at Dec. 31, 2015 | 24,536,000 | |||
Net loss | (31,071) | (31,071) | ||
Exercise of stock Options | 31 | 31 | ||
Exercise of stock Options, shares | 48,000 | |||
Share-based compensation | 2,669 | 2,669 | ||
Issuance of common stock warrants | 209 | 209 | ||
Issuance of common stock warrants, shares | ||||
Conversion of restricted stock units | ||||
Conversion of restricted stock units, shares | 77,000 | |||
Balance at Dec. 31, 2016 | 204,463 | (234,647) | (30,184) | |
Balance, shares at Dec. 31, 2016 | 24,661,000 | |||
Net loss | (30,925) | (30,925) | ||
Exercise of stock Options | 17 | $ 17 | ||
Exercise of stock Options, shares | 14,000 | 14,000 | ||
Share-based compensation | 2,060 | $ 2,060 | ||
Issuance of common stock warrants for services | 54 | 54 | ||
Issuance of common stock warrants for services, shares | ||||
Issuance of restricted stock units | 139 | 139 | ||
Issuance of restricted stock units, shares | ||||
Issuance of common stock in follow-on offering, net of offering costs and underwriter commissions | 8,188 | 8,188 | ||
Issuance of common stock in follow-on offering, net of offering costs and underwriter commissions, shares | 6,676,000 | |||
Balance at Dec. 31, 2017 | $ 214,921 | $ (265,572) | $ (50,651) | |
Balance, shares at Dec. 31, 2017 | 31,351,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Cash flows from operating activities | |||
Net loss | $ (30,925) | $ (31,071) | $ (43,728) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 2,044 | 2,235 | 3,510 |
Loss (gain) on disposal of equipment | 363 | 135 | (39) |
Share-based compensation and warrants issued for services | 2,114 | 2,669 | 3,811 |
Non-cash interest expense | 1,596 | 1,329 | 803 |
Change in fair value of derivative liability | 96 | ||
Net changes in operating assets and liabilities: | |||
Accounts receivable | (193) | (1,245) | (560) |
Inventories | (1,345) | 582 | 3,580 |
Prepaid Expenses and other assets | (144) | 189 | 142 |
Deferred cost of product revenues | (375) | (1,092) | 201 |
Accounts payable | 2,305 | (588) | (3,486) |
Accrued and other liabilities | 2,599 | (219) | (76) |
Accrued interest due to related parties | 4 | 443 | 1,175 |
Deferred revenue | 805 | 2,494 | 29 |
Deferred revenue from related parties | (168) | (492) | |
Customer refund liabilities | (1,044) | ||
Net cash used in operating activities | (21,056) | (24,307) | (36,174) |
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (849) | (209) | (1,653) |
Proceeds from the sale of equipment | 35 | 7 | |
Net cash used in investing activities | (814) | (209) | (1,646) |
Cash flows from financing activities | |||
Proceeds from issuance of common stock, net of offering costs | 8,188 | ||
Proceeds from issuance of debt | 4,000 | ||
Proceeds from issuance of debt due to related parties, net of financing costs | 39,698 | ||
Proceeds from secured borrowings | 16,228 | ||
Reductions in secured borrowings | (14,952) | ||
Repayment of debt | (756) | (260) | (435) |
Financing costs | (215) | (75) | |
Repayment of capital leases | (420) | (821) | (1,983) |
Change in restricted cash | 957 | 15,412 | (15,000) |
Exercise of stock options | 17 | 31 | 54 |
Net cash provided by financing activities | 13,047 | 14,287 | 22,334 |
Net decrease in cash and cash equivalents | (8,823) | (10,229) | (15,486) |
Cash and cash equivalents, beginning of period | 9,609 | 19,838 | 35,324 |
Cash and cash equivalents, end of period | 786 | 9,609 | 19,838 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest, net of capitalized interest of $0, $0, and $4 and for the years ended December 31, 2017, 2016 and 2015, respectively | 5,993 | 5,550 | 2,297 |
Supplemental disclosure of non-cash investing and financing activities | |||
Property, plant and equipment included in accounts payable and accrued liabilities | 245 | 21 | 499 |
Equipment acquired under capital leases | $ 1,586 | $ 787 |
Consolidated Statements of Cas9
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Statement of Cash Flows [Abstract] | |||
Cash paid for interest, net of capitalized interest | $ 0 | $ 0 | $ 4 |
Summary of Business, Basis of P
Summary of Business, Basis of Presentation and Liquidity | 12 Months Ended |
Dec. 31, 2017 | |
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. In December 2016, the Company filed a shelf registration statement with the SEC on Form S-3 that provides for the sale and issuance of up to $50,000,000 of its common stock, preferred stock, debt securities, warrants, rights and/or units, including the ability to sell up to $15,000,000 of the Company’s common stock through an at-the-market program in accordance with an offering agreement with a third party. See Note 15 for further discussion. In December 2017, the Company entered into a securities purchase agreement with certain accredited investors for an aggregate purchase price of $30,000,000 of common stock subject to certain conditions which included shareholder approval which had not been met as of December 31, 2017. See Note 17 for further discussion. The Company is an early stage company with a limited operating history and has a limited number of commercialized products. As of December 31, 2017, the Company had an accumulated deficit of $265,572,000 has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future. Until the completion of the IPO in August 2013, the Company had funded operations primarily with net proceeds from the private placements of convertible preferred stock, convertible notes, 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 December 31, 2017, the Company had a working capital deficit of $2,884,000, including cash and cash equivalents of $786,000. In addition, as of December 31, 2017, the Company had debt and debt due to related parties of $25,931,000 and $37,822,000, respectively, for which the underlying debt agreements contain various financial and non-financial covenants, as well as certain material adverse change clauses. In addition, as of December 31, 2017, the Company had a total of $2,047,000 of restricted cash relating to these debt agreements (see Notes 6 and 14). If the Company further 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. Without entering into a continuation of its current waiver, which expires April 3, 2019, entering into strategic agreements that include significant cash payments upfront, significantly increasing revenues from sales or raising additional capital through the issuance of equity, the Company expects it will exceed its maximum debt-to-worth requirement under a promissory note with Five Star Bank. Further, 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. 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. 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. 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 the Company’s ability to continue as a going concern. The Company adopted the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40) The Company’s historical operating results and negative working capital as of December 31, 2017 indicate substantial doubt exists related to the Company’s ability to continue as a going concern. However, the Company believes that its existing cash and cash equivalents of $786,000 at December 31, 2017, expected revenues, the net proceeds from equity financing and debt conversions during the first quarter of 2018 (as discussed in Note 17), expected future debt or equity financings and cost management as well as cost reductions will be sufficient to fund operations as currently planned through one year from the date of the issuance of these financial statements. The Company anticipates securing additional sources of through equity and/or debt financings, collaborative or other funding arrangements with partners, or through other sources of financing, consistent with historic results. However, the Company cannot predict, with certainty, the outcome of its actions to grow revenues, to manage or reduce costs or to secure additional financing from outside sources on terms acceptable to us or at all. Further, the Company may continue to require additional sources of cash for general corporate purposes, which may include operating expenses, working capital to improve and promote its commercially available products, advance product candidates, expand international presence and commercialization, general capital expenditures and satisfaction of debt obligations. The Company has based its beliefs on assumptions and estimates that may prove to be wrong, and the Company could spend its available financial resources less or more rapidly than currently expected. The actions discussed above cannot be considered probable of occurring and mitigating the substantial doubt raised by its historical operating results and satisfying its estimated liquidity needs for 12 months from the issuance of the financial statements. If the Company becomes unable to continue as a going concern, it may have to liquidate its assets, and stockholders may lose all or part of their investment in our common stock. The June 2014 Secured Promissory Note contains a material adverse change clause that could be invoked by the lender as a result of the uncertainty related to the Company’s ability to continue as a going concern. If the lender were to declare an event of default, the entire amount of borrowings related to all debt agreements at that time would have to be reclassified as current in the financial statements. The lender has waived their right to deem recurring losses, liquidity, going concern, and financial condition a material adverse change through April 3, 2019. As a result, none of the long term portion of the Company’s outstanding debt has been reclassified to current in these financial statements as of December 31, 2017. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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 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. See Note 6 for further discussion. Deriviative Liability From time-to-time, the Company may issue convertible notes that contain embedded features that required derivative accounting. The Company’s convertible, debt as further discussed in Note 6, has an embedded derivative that required bifurcation from the host instrument. Fair Value of Financial Instruments 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 and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 (in thousands): DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ — $ — $ — $ — DECEMBER 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,752 $ 3,752 $ — $ — The Company’s money market funds are held at registered investment companies. As of December 31, 2017, there were no money market funds. As of December 31, 2016, the money market funds were in active markets and, therefore, are measured based on the Level 1 valuation hierarchy. DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Liabilities Derivative liability $ 674 $ — $ — $ 674 DECEMBER 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Derivative liability $ — $ — $ — $ — The Company estimated the fair value of the derivative liability as of December 31, 2017 using an Option Pricing Model. The fair value is subjective and is affected by certain significant inputs to the valuation model, which are disclosed in the table below. The fair value of the derivative liability is based upon the outputs of the Option Pricing Model probability-weighted to reflect three different conversion option exercise dates. As the Option Pricing Model estimates the fair value of derivative liability using unobservable inputs, it is considered to be a Level 3 fair value measurement. As a result of the change in the estimated fair value between the issuance dates of the derivative liability issued beginning on October 12, 2017 and December 31, 2017, the Company recognized a net loss from the total change in estimated fair value of the derivative liabilities as shown in the tables below. This loss is included in the change in estimated fair value of derivative liability in the Company’s statement of operations. The following table provides a reconciliation of the activity between the issuance date and ending balances for the derivative liability measured at fair value using significant unobservable inputs (Level 3) (in thousands): WARRANT Fair value at December 31, 2016 $ — Derivative liability issued 578 Change in estimated fair value recorded of financial instruments 96 Fair value at December 31, 2017 $ 674 The following table represents significant unobservable inputs used in determining the fair value of the derivative liability: December 31, 2017 2016 Stock Price volatility 60 % — Risk-free rate 1.28 % — Probability weighted term in years 0.42 — 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. During the years ended December 31, 2017, 2016 and 2015, 9%, 10% and 9%, respectively, of the Company’s revenues were generated from international customers. The Company’s principal sources of revenues were its Regalia, Grandevo, and Venerate product lines for the years ended December 31, 2017, 2016 and 2015, accounting for 87%, 89% and 96%, respectively, of the Company’s total revenues. 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 Year ended December 31, 2017 24 % 2 % 2016 25 % 3 % 2015 28 % 10 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either December 31, 2017 or 2016 consist of the following: Customer A B C D E F December 31, 2017 22 % 3 % —% 16 % 11 % 11 % December 31, 2016 21 % 10 % 14 % — % 1 % — % 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 currently relies on one supplier for this plant. Such 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. While the Company does not have a long-term supply contract with this supplier, the Company does have a long term business relationship with this supplier. The Company endeavors to keep 6 months of knotweed extract on hand at any given time, but an unexpected disruption in supply could have an effect on Regalia supply and revenues. 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. Accounts Receivable The carrying value of the Company’s receivables represents their estimated net realizable values. The Company generally does not require collateral and estimates any required allowance for doubtful accounts based on historical collection trends, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectablity of those balances and the allowance is recorded accordingly. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due. During the years ended December 31, 2017, 2016 and 2015, no receivables balances were written off. As of December 31, 2017 and 2016, the Company had no allowance for doubtful accounts. 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. During the year ended December 31, 2017, the Company recorded, as a component of cost of product revenues, adjustments to inventory reserves of $125,000 due to quantities on hand that may not be used or sold prior to expiration, and an adjustment of $224,000 as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity. During the year ended December 31, 2016, the Company recorded, as a component of cost of product revenues, adjustments to inventory reserves of $177,000 due to quantities on hand that may not be used or sold prior to expiration, and an adjustment of $771,000 as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity. During the year ended December 31, 2015, the Company recorded, as a component of cost of product revenues, adjustments to inventory reserves of $19,000 due to quantities on hand that may not be used or sold prior to expiration, and an adjustment of $2,545,000 as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity. Inventories, net consist of the following (in thousands): DECEMBER 31, 2017 2016 Raw materials $ 2,310 $ 3,491 Work in progress 2,441 2,044 Finished goods 5,076 2,947 $ 9,827 $ 8,482 As of December 31, 2017 and 2016, the Company had $252,000 and $127,000, respectively, in reserves against its inventories. 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 December 31, 2017 and 2016, the Company recorded deferred cost of product revenues of $3,063,000 and $2,688,000, respectively. Property, Plant and Equipment Property, plant and equipment are recorded at cost and are depreciated using the straight-line method over their estimated useful lives. The Company generally uses the following estimated useful lives for each asset category: ASSET CATEGORY ESTIMATED USEFUL LIFE Building 30 years Computer equipment 2-3 years Machinery and equipment 3-20 years Office equipment 3-5 years Furniture 3-5 years Leasehold improvements Shorter of lease term or useful life Software 3 years Amortization of assets under capital leases is included in depreciation expense. Maintenance, repairs and minor renewals are expensed as incurred. Expenditures that substantially increase an asset’s useful life are capitalized. The Company recognized a combined loss on disposals or impairment charge totaling $369,000 for the year ended December 31, 2017 on these disposed or held for sale assets. The Company included the loss on disposal or impairment charge in selling, general and administrative expenses. During the year ended December 31, 2016, the Company identified certain equipment that it intended to dispose of or sell in the near term. The estimated net realizable value of this equipment was $70,000 and determined using third-party appraisals. These items were classified as held for sale and were valued based on unobservable inputs and classified as Level 3 within the fair value hierarchy. These assets were classified in prepaid expenses as of December 31, 2016 and disposed of or sold during the year ended December 31, 2017. Impairment of Long-Lived Assets Impairment losses related to long-lived assets are recognized in the event the net carrying value of such assets is not recoverable and exceeds fair value. The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). If the carrying amount of a long-lived asset (asset group) is considered is not recoverable, the impairment loss is measured as the amount by which the carrying value of the asset group exceeds its estimated fair value. 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 December 31, 2017 and 2016, the Company recorded deferred product revenues of $6,451,000 and $5,411,000, respectively. 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. During the years ended December 31, 2017, 2016 and 2015, 39%, 44%, and 47%, respectively, of total revenues were recognized on a sell-through basis. 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. The Company received no payments under these distribution agreements during the year ended December 31, 2017. During the year ended December 31, 2016, the Company received payments totaling $300,000 under these agreements. During the year ended December 31, 2015, the Company received payments totaling $750,000 under these agreements. During the years ended December 31, 2017, 2016 and 2015, the Company recognized $232,000, $327,000 and $333,000, respectively, as license revenues, excluding related party revenues. As of December 31, 2017, the Company recorded current and non-current deferred revenues of $233,000 and $1,557,000, respectively, related to payments received under these agreements. As of December 31, 2016, the Company recorded current and non-current deferred revenues of $236,000 and $1,787,000, 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. During the years ended December 31, 2017, 2016 and 2015, research and development expenses totaled $9,711,000, $8,654,000 and $12,392,000, respectively, and patent expenses totaled $1,109,000, $1,016,000, and $1,108,000, respectively. Shipping and Handling Costs Amounts billed for shipping and handling are included as a component of product revenues. Related costs for shipping and handling have been included as a component of cost of product revenues. Advertising The Company expenses advertising costs as incurred. Advertising costs for the years ended December 31, 2017, 2016 and 2015 were $386,000, $213,000 and $456,000, respectively. Share-Based Compensation The Company recognizes share-based compensation expense for all stock options and restricted stock units granted to employees and directors based on estimated fair values. The Company estimates the fair value of restricted stock units based on the closing bid price of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options on the date of grant using an option-pricing model. The value of the portion of the stock options that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period. Forfeitures are estimated on the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses the Black-Scholes-Merton option-pricing model to calculate the estimated fair value of stock options on the measurement date (generally, the date of grant). The required inputs in the option-pricing model include the expected life of the stock options, estimated volatility factor, risk-free interest rate and expected dividend yield. These inputs are subjective and generally require significant judgment. During the years ended December 31, 2017, 2016 and 2015, the Company calculated the fair value of stock options granted based on the following assumptions: YEAR ENDED DECEMBER 31, 2017 2016 2015 Expected life (years) 6.08 5.85-6.08 6.08 Estimated volatility factor 43%-45% 45%-46% 46%-47% Risk-free interest rate 1.82%-2.30% 1.13%-2.18% 1.86%-1.93% Expected dividend yield — — — Expected Life Share-Based Payment Simplified Method for Plain Vanilla Share Options Estimated Volatility Factor Risk-Free Interest Rate Expected Dividend Yield Estimated Forfeitures Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets cannot be recognized under the preceding criteria, the Company establishes valuation allowances, as necessary, to reduce deferred tax assets to the amounts expected to be realized. As of December 31, 2017 and 2016, all deferred tax assets were fully offset by a valuation allowance. The realization of deferred tax assets is dependent upon future federal, state and foreign taxable income. The Company’s judgments regarding deferred tax assets may change due to future market conditions, as the Company expands into international jurisdictions, due to changes in U.S. or international tax laws and other factors. These changes, if any, may require material adjustments to the Company’s deferred tax assets, resulting in a reduction in net income or an increase in net loss in the period in which such determinations are made. The Company recognizes liabilities for uncertain tax positions based upon a two-step process. To the extent that a tax position does not meet a more-likely-than-not level of certainty, no benefit is recognized in the consolidated financial statements. If a tax position meets the more-likely-than-not level of certainty, it is recognized in the consolidated financial statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company’s policy is to analyze the Company’s tax positions taken with respect to all applicable income tax issues for all open tax years in each respective jurisdiction. As of December 31, 2017 and 2016, the Company concluded that there were no additional uncertain tax positions were required to be recognized in its consolidated financial statements. The Company recognizes interest and penalties related to income tax matters in income tax expense. No amounts were recognized for interest and penalties during the years ended December 31, 2017, 2016 and 2015. Comprehensive Loss Comprehensive loss represents the net loss for the period adjusted for the results of certain changes to stockholders’ equity (deficit) that are not reflected in the consolidated statements of operations, if applicable. Net loss is the only component of the Company’s comprehensive loss for the periods presented. Segment Information The Company is organized as a single operating segment, whereby its chief operating decision maker assesses the performance of and allocates resources to the business as a whole. Recently Adopted Accounting Pronouncements In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which amends the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 is effective for public companies for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted ASU 2015-17 effective January 1, 2017. Adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017. Adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”), which applies guidance on the subsequent measurement of inventory. ASU 2015-11 states that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The guidance excludes inventory measured using last-in, first-out or the retail inventory method. ASU 2015-11 is effective for interim and annual reporting periods beginning after December 15, 2016 including interim periods within those fiscal years. Early adoption is permitted. The Company did not early adopt ASU 2015-11. The Company adopted ASU 2015-11 effective January 1, 2017. Adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flow. Recently Issued Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendments in this update clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 will be effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company has not elected to early adopt this guidance and is currently evaluating ASU 2016-15 to determine the impact to its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. For public business entities that meet the definition of a Securities and Exchange Commission filer, ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019, and the guidance is to be applied using the modified-retrospective approach. Earlier adoption is permitted for annual and interim reporting periods beginning after December 15, 2018. The Company is currently evaluating ASU 2016-13 to determine the impact to its consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) Leases: Amendments to the FASB Accounting Standards Codifications (“ASU 2016-02”), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for public companies for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Companies must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently evaluating ASU 2016-02 to determine the potential impact to its consolidated financial statements and related disclosures. 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 (“ASU 2016-01”). ASU 2016-01 applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation and disclosure of financial instruments. Among other things, ASU 2016-01 (i) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (iv) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (v) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (vi) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating ASU 2016-01 to determine the potential impact to its consolidated financial statements and related disclosures. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers The Company has assessed significant impacts of the new guidance on its accounting policies and procedures and has evaluated the new requirements as applied to existing revenue contracts. The Company believes the most significant impact will relate to the recognition of product sales made to distributors. The Company currently recognizes revenue from the sale of products made to distributors on either a sell-in or sell-through basis depending on the specific circumstances of the arrangement. The new guidance is currently expected to r |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 3. Property, Plant and Equipment Property, plant and equipment consist of the following (in thousands): DECEMBER 31, 2017 2016 Land $ 1 $ 1 Buildings 6,528 6,528 Computer equipment and software 522 522 Furniture, fixtures and office equipment 343 352 Machinery and equipment 15,302 14,887 Leasehold improvements 2,373 2,373 Construction in progress 218 7 25,287 24,670 Less accumulated depreciation (9,271 ) (7,327 ) $ 16,016 $ 17,343 The Company has granted interests in certain property, plant and equipment to third parties in connection with certain financing arrangements (see Note 6). The Company recognized depreciation and amortization expense during the years ended December 31, 2017, 2016 and 2015 of $2,044,000, $2,235,000 and $3,510,000, respectively, which included amortization expense related to capital leases during those periods (see Note 10). |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | 4. Net Loss per Share Basic net loss per share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per share reflects the potential dilution that could occur if securities or other contracts to issue common stock, such as stock options, restricted stock units, convertible notes, convertible preferred stock and warrants, result in the issuance of common stock which share in the losses of the Company. Certain potential shares of common stock have been excluded from the computation of diluted net loss per share for certain periods as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce the loss per share. The treasury stock method has been applied to determine the dilutive effect of warrants. 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): DECEMBER 31, 2017 2016 2015 Stock options outstanding 3,121 3,397 2,116 Warrants to purchase common stock 4,232 4,152 4,027 Restricted stock units outstanding 822 415 107 Convertible notes payable 4,005 — — 2017 2016 2015 (In thousands, except per share data) Numerator: Net loss $ (30,925 ) $ (31,071 ) $ (43,728 ) Denominator Weighted average shares outstanding used for basic and diluted net loss per share 29,235 24,617 24,469 Basic and diluted net loss per share $ (1.06 ) $ (1.26 ) $ (1.79 ) |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 5. Accrued Liabilities Accrued liabilities consist of the following (in thousands): DECEMBER 31, 2017 2016 Accrued compensation $ 1,825 $ 1,403 Accrued warranty costs 556 754 Accrued legal costs 1,558 569 Accrued customer incentives 1,986 639 Accrued liabilities, other 2,264 2,143 $ 8,189 $ 5,508 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, 2016 $ 754 Warranties issued (released) during the period (188 ) Settlements made during the period (10 ) Balance at December 31, 2017 $ 556 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Debt, including debt due to related parties, consists of the following (in thousands): DECEMBER 31, 2017 2016 Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 14.00% per annum, payable monthly through October 2018, collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of December 31, 2017 and December 31, 2016 of $103 and $228, respectively, discount is based on imputed interest rate of 15.5% $ 12,347 $ 12,222 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (6.5% as of December 31, 2017) 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 December 31, 2017 and December 31, 2016 of $226 and $247, respectively, discount is based on imputed interest rate of 6.6% 8,872 9,113 Senior secured convertible promissory notes (“December 2017 Convertible Note”) Senior Secured Promissory Notes”) bearing interest at 1% per annum, interest and principal due at maturity (October 2020), collateralized by substantially all of the Company’s assets, net of unamortized discount as of December 31, 2017 of $510 based on imputed interest rate of 54.6% 3,490 — Secured revolving borrowing (“LSQ Financing”) bearing interest at (13.6% annually) payable through the lenders direct collection of certain accounts receivable through March 2018, collateralized by substantially all of the Company’s personal property, net of unamortized debt discount as of December 31, 2017 and December 31, 2016 of $54 and $0, respectively, which is amortized on a straight-line basis 1,222 — 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 discount as of December 31, 2017 and December 31, 2016 of $2,178 and $3,333, respectively debt discount is based on imputed interest rate of 11.0% (see Note 14) 37,822 36,667 Debt, including debt due to related parties 63,753 58,002 Less debt due to related parties (37,822 ) (36,667 ) Less current portion (1,524 ) (252 ) $ 24,407 $ 21,083 As of December 31, 2017, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties, are due as follows (in thousands): Year Ended December 31, 2018 23,988 2019 10,279 2020 24,296 2021 318 2022 339 Thereafter 7,604 Total future principal payments $ 66,824 Subsequent to December 31, 2017, the Company renegotiated certain debt instruments. See Note 17 for further discussion of loan payments. The fair value of the Company’s outstanding debt obligations, which excludes debt due to related parties, as of December 31, 2017 and 2016 was $21,133,000 and $21,611,000, respectively. For the October 2012 and April 2013 Secured Promissory Notes, the debt was valued by applying the ratio of the value of common stock the lender agreed to take as consideration in connection with the Securities Purchase Agreement (Note 17) and applying this ratio to the outstanding principal balance. The Company used 6.5%, the current interest rate, to value the variable rate debt. This debt is classified as Level 3 within the fair value hierarchy. The debt entered into during 2017 was valued using the outstanding principal balance. October 2012 and April 2013 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. 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 a $1,250,000 subordinated convertible note (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 October 2012 and April 2013 Secured Promissory Notes bear interest at 14% at December 31, 2017. This loan is collateralized by substantially all of the Company’s assets. Activity related to the October 2012 and April 2013 Secured Promissory Notes from December 31, 2016 through December 31, 2017 consisted of the following (in thousands): DECEMBER 31, AMORTIZATION PRINCIPAL DECEMBER 31, 2016 ADDITIONS OF DEBT PAYMENTS 2017 Principal $ 12,450 $ — $ — $ — $ 12,450 Debt discount related to the issuance of common stock warrants (1) (203 ) — 111 — (92 ) Discount related to the $3,750,000 Notes (1) (25 ) — 14 — (11 ) $ 12,222 $ — $ 125 $ — $ 12,347 (1) The amortization of this account is included in interest expense in the consolidated statements of operations and as non-cash interest expense in the consolidated statements of cash flows. On December 15, 2017, the Company entered into an amendment to change the terms of the October 2012 and April 2013 Secured Promissory Notes. The terms of the amendment were contingent upon the occurrence of a specific equity transaction that had not occurred as of December 31, 2017. See Note 17 for further discussion of the impact of this amendment. June 2014 Secured Promissory Note In June 2014, the Company borrowed $10,000,000 pursuant to a business loan agreement and promissory note (“June 2014 Secured Promissory Note”) with Five Star Bank (“Lender”) which bears interest at 6.5% as of December 31, 2017. The interest rate is subject to change and is based on the prime rate plus 2.00% per annum. The June 2014 Secured Promissory Note is repayable in monthly payments of $71,051 and adjusted from time-to-time as the interest rate changes, 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 December 31, 2017, the Company had $487,000 remaining in this restricted deposit account, which is recorded as restricted cash included in current assets. 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 Five Star Bank. 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, Five Star Bank may declare the entire unpaid principal and interest immediately due and payable. 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 14, which increased the Company’s debt while the Company continued to incur net losses, which decreased stockholders’ equity. However, the Company received a waiver from Five Star Bank with respect to compliance with the requirements to (i) maintain a current ratio greater than 1.25-to-1.0 (extended to December 31, 2017, and subsequently extended to October 1, 2018) and (ii) maintain a debt-to-worth ratio less than 4.0-to-1.0 (extended to December 31, 2017, and subsequently extended to October 1, 2018). In March 2018, the Company received a waiver from Five Star Bank with respect to compliance with the requirements to (i) maintain a current ratio greater than 1.25-to-1.0 (extended to April 3, 2019) and (iii) maintain a debt-to-worth ratio less than 4.0-to-1.0 (extended to April 3, 2019), as well as a waiver of the material adverse change clause, also through April 3, 2019. The Company would otherwise have been in default of both the current ratio and the debt-to-worth ratio, without the covenant waivers. The receipt of these waiver and the extension to provide financial statements under the October 2012 and April 2013 Secured Promissory Notes cured the Company’s otherwise being in breach of the covenants under the loan agreement for the year ended December 31, 2016 and 2017. On December 15, 2017, the Company entered into an amendment to change the terms of the October 2012 and April 2013 Secured Promissory Notes. The terms of the amendment were contingent upon the financing contemplated in the Purchase Agreement. See Note 17 for further discussion of the impact of this amendment. LSQ Financing On March 24, 2017, the Company entered into an Invoice Purchase Agreement (the “LSQ Financing”) with LSQ Funding Group, L.C. (“LSQ”), pursuant to which LSQ may elect to purchase up to $7,000,000 of eligible customer invoices from the Company. The Company’s obligations under the LSQ Financing are secured by a lien on substantially all of the Company’s personal property; such lien is first priority with respect to the Company’s accounts receivable, inventory, and related property, pursuant to an intercreditor agreement, dated March 22, 2017 (the “Three Party Intercreditor Agreement”), with administrative agents for the October 2012 and April 2013 Secured Promissory Notes holders and the August 2015 Senior Secured Promissory Notes holders. Advances by LSQ may be made at an advance rate of up to 80% of the face value of the receivables being sold. Upon the sale of the receivable, the Company will not maintain servicing. LSQ may require the Company to repurchase accounts receivable if (i) the payment is disputed by the account debtor, with the purchaser being under no obligation to determine the bona fides of such dispute, (ii) the account debtor has become insolvent or (iii) upon the effective date of the termination of the LSQ Financing. LSQ will retain its security interest in any accounts repurchased from the Company. The Company will also pay to LSQ (i) an invoice purchase fee equal to 1% of the face amount of each purchased invoice, at the time of the purchase, and (ii) a funds usage fee equal to 0.035%, payable monthly in arrears. An aging and collection fee is charged at the time when the purchased invoice is collected, calculated as a percentage of the face amount of such invoice while unpaid (which percentage ranges from 0% to 0.35% depending upon the duration the invoice remains outstanding). The LSQ Financing will be effective for one year with automatic one year renewals thereafter unless terminated by the Company at least 60 and not greater than 90 days from the end of the then-effective term; a termination fee is due upon early termination by the Company if such termination is not requested within such 30-day window. LSQ may terminate this agreement with 30 days written notice at which time the LSQ Financing will be terminated at the earlier of the 30-day period, the end of the current term, or the end of the then renewal term. The events of default under the LSQ Financing include failure to pay amounts due, failure to turn over amounts due to LSQ within a cure period, breach of covenants, falsity of representations, and certain insolvency events. The Company incurred $215,000 in financing-related costs as part of the LSQ Financing that were recorded as a debt discount and amortized to interest expenses over the initial one-year term. The unamortized portion of these financing costs is $54,000 as of December 31, 2017. In April 2017, the Company began receiving advances under the LSQ Financing. There was a $1,222,000, net of discount, in outstanding balance under the LSQ Financing as of December 31, 2017. Upon sale of the receivable, the Company may elect to set up a reserve where upon the cash for the sale remains with the third-party and the Company can draw on the available amount on the reserve account at any time. Since April 2017, there were times when the Company elected to utilize the reserve account, and the Company had $4,000 in excess funds available on the reserve account outstanding as of December 31, 2017. As of December 31, 2017, the Company had $2,931,000 included in accounts receivable that were transferred under this arrangement. Equipment Financing On August 22, 2017, the Company signed an equipment financing agreement (“Equipment Financing Agreement”) to purchase certain equipment it had leased under a capital lease. The total borrowed under the Equipment Financing Agreement was $496,000. There was no balance outstanding under the Equipment Financing Agreement as of December 31, 2017. Secured Convertible Promissory Note On October 12, 2017, the Company and Dwight W. Anderson (“Anderson”) entered into a $1,000,000 convertible promissory note, which was restated in its entirety by a convertible promissory note entered into by the Company and Anderson on October 23, 2017 (the “October 2017 Convertible Note”). The October 2017 Convertible Note was an unsecured promissory note in the aggregate principal amount of up to $6,000,000. The Company’s ability to borrow under the October 2017 Convertible Note were subject to Anderson’s approval and due on October 23, 2020 (the “Maturity Date”). Under the terms of the October 2017 Convertible Note, from the date of the closing through December 31, 2017, the October 2017 Convertible Note bore interest at a rate of 1% per annum, payable in arrears on the Maturity Date, unless earlier converted into shares of the Company’s common stock as described below. Thereafter, beginning January 1, 2018, the October 2017 Convertible Note bore interest at a rate of 10% per annum, payable in arrears on the Maturity Date, unless earlier converted into shares of the Company’s common stock as described below. Any or all of the principal or accrued interest under the October 2017 Convertible Note was convertible into shares of the Company’s common stock at a rate of one share of common stock per $1.00 of converting principal or interest, rounded down to the nearest share with any fractional amounts cancelled, at the election of Anderson by delivery of written notice to the Company. In addition, upon the consummation of a qualified equity financing of the Company prior to the Maturity Date, the aggregate outstanding principal balance of the October 2017 Convertible Note and all accrued and unpaid interest thereon may convert, at the option of Anderson, into that number of the securities issued and sold in such financing, determined by dividing (a) such aggregate principal and accrued interest amounts, by (b) the purchase price per share or unit paid by the purchasers of the Company’s securities issued and sold in such financing. Notwithstanding the foregoing, Anderson’s ability to affect any such conversions will be limited by applicable provisions governing issuances of shares of the Company’s common stock under the rules of The Nasdaq Capital Market, subject to the Company’s receipt of any applicable waivers thereof, and any amounts not issuable to Anderson in the Company’s equity securities as a result of this limitation will be payable in cash. On December 15, 2017, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with Anderson, affiliate of Anderson and certain other accredited investors (collectively, the “Buyers”). In conjunction with the transaction contemplated in the Purchase Agreement, Anderson was entitled to convert any portion of the balance outstanding under the October 2017 Convertible Note and any accrued interest into shares of the Company’s common stock at a rate of one share of common stock per $0.50. Anderson’s ability to affect conversions at the $0.50 rate was subject to, among other things, approval of the Company’s shareholders, which had not been received as of December 31, 2017. On December 22, 2017, the Company and Anderson amended and restated in its entirety the terms of the October 2017 Convertible Note (“Secured December 2017 Convertible Note”). The Secured December 2017 Promissory Note was a secured promissory note in the aggregate principal amount of up to $6,000,000, at Anderson’s sole discretion, due on October 12, 2020 (the “Maturity Date”). As of December 31, 2017, the outstanding principal balance under the Secured December Convertible Note was $4,000,000, exclusive of a $510,000 discount. The interest rate and conversion terms of the Secured December 2017 Convertible Note remain unchanged from the terms of the October 2017 Convertible Note as described above. The Company recognized a discount on the October 2017 Convertible Note in the amount of incurred $578,000 as a result of a derivative liability associated with this debt. This discount is being amortized to interest expenses over the expected remaining term of the note. The unamortized portion of these financing costs is $367,000 as of December 31, 2017. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Warrants | 7. Warrants The following table summarizes information about the Company’s common stock warrants outstanding as of December 31, 2017 (in thousands, except exercise price data): NUMBER OF SHARES SUBJECT TO EXPIRATION WARRANTS EXERCISE DESCRIPTION ISSUE DATE DATE ISSUED PRICE In connection with June 2013 Credit Facility (June 2013 Warrants) June 2013 June 2023 (1) 27 $ 8.40 In connection with August 2015 Senior Secured Promissory Notes (August 2015 Warrants) August 2015 August 2023 4,000 1.91 In connection with October 2012 and April 2013 Secured Promissory Notes (November 2016 Warrants) November 2016 November 2026 125 2.38 In connection with June 2017 Consulting Agreement (June 2017 Warrants) June 2017 June 2027 80 1.10 4,232 (1) The June 2013 Warrants expire upon the earlier to occur of (i) the date listed above; (ii) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any transfer of more than 50% of the voting power of the Company, reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Company); or (iii) a sale of all or substantially all of the assets of the Company unless the Company’s stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Company’s acquisition or sale or otherwise), hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity. The June 2013 Warrants became exercisable on the date of the IPO. The August 2015 Warrants were immediately exercisable and remain exercisable subject to certain exceptions. The November 2016 Warrants were immediately exercisable and remain exercisable subject to certain exceptions. The November 2017 Warrants vested over a period of six months are fully exercisable as of December 31, 2017. See Note 17 for discussion of additional warrants issued after December 31, 2017. |
Common Stock
Common Stock | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Common Stock | 8. Common Stock In August 2013, the Company amended and restated its certificate of incorporation to increase the number of shares of common stock authorized for issuance to 250,000,000 shares with a par value of $0.00001. As of December 31, 2017, the Company had reserved shares of common stock for future issuances as follows (in thousands): SHARES Shares available for future grant under stock incentive plans 2,340 Stock options outstanding 3,121 Warrants to purchase common stock 4,232 Restricted stock units 822 Convertible notes payable 4,005 14,520 |
Stock Option Plans
Stock Option Plans | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Plans | 9. Stock Option Plans In July 2006, the Company authorized the 2006 Equity Incentive Plan, as amended, (“2006 Plan”). The 2006 Plan provided for the issuance of up to 1,434,000 shares of common stock underlying awards. The 2006 Plan was terminated in December 2011 and no new stock awards may be granted under the 2006 Plan. The 2006 Plan allowed holders to exercise stock options prior to their vesting. The common stock received by the employee is restricted and follows the same vesting schedule as the underlying option. In the event the employee voluntarily or involuntarily terminates employment from the Company, the Company retains a right to repurchase the unvested common stock at the original option exercise price. As of December 31, 2017 and 2016, no options had been exercised that would be subject to repurchase. As of December 31, 2017, options to purchase 215,000 shares of the Company’s common stock at a weighted-average exercise price of $1.13 per share were outstanding under the 2006 Plan, of which 215,000 were vested. During the year ended December 31, 2017, 13,000 and 0 options were exercised and cancelled, respectively, under the 2006 Plan. In July 2011, and as amended in September 2012, the Company authorized the 2011 Stock Plan (“2011 Plan”). The 2011 Plan provided for the issuance of up to 1,167,000 shares of common stock underlying awards, plus any shares of common stock underlying awards previously issued under the 2006 Plan that terminate or expire after the date of authorization of the 2011 Plan, subject to certain adjustments. In addition, the 2011 Plan provided that the Company not deliver more than 2,446,000 shares upon the exercise of incentive stock options issued under both the 2006 Plan and 2011 Plan. The 2011 Plan was terminated in August 2013 and no new stock awards may be granted under the 2011 Plan. As of December 31, 2017, options to purchase 305,000 shares of the Company’s common stock at a weighted-average exercise price of $7.41 per share were outstanding under the 2011 Plan, of which 305,000 were vested. During the year ended December 31, 2017, 1,000 and 17,000 options were exercised and cancelled, respectively, under the 2011 Plan. In August 2013, the Company’s board of directors adopted the 2013 Stock Incentive Plan (“2013 Plan”) covering officers, employees, and directors of, and consultants to, the Company. Under the 2013 Plan, the Company may grant incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock, restricted stock units and dividend equivalent rights. At the time the 2013 Plan was established, the maximum aggregate number of shares of the Company’s common stock that could be issued pursuant to the 2013 Plan was 1,600,000, plus the number of shares of common stock that were reserved for issuance pursuant to future grants under the 2011 Plan at that time. The number of shares authorized for issuance pursuant to the 2013 Plan automatically increases by any additional shares that would have otherwise returned to the 2011 Plan as a result of the forfeiture, termination or expiration of awards previously granted under the 2011 Plan. In addition, the number of shares authorized for issuance pursuant to the 2013 Plan will increase by a number equal to the lesser of (i) 3.5% of the number of shares of the Company’s common stock outstanding on the last day of the immediately preceding fiscal year or (ii) a lesser number of shares determined by the administrator. As of December 31, 2017, options to purchase 2,601,000 shares of the Company’s common stock at a weighted-average exercise price of $5.58 per share were outstanding under the 2013 Plan, of which 1,604,000 were vested. During the year ended December 31, 2017, 0 and 361,000 options were exercised and cancelled, respectively, under the 2013 Plan. Generally, options vest 25% on the first anniversary from the date of grant and 1/48 per month thereafter (“Standard Vesting Terms”); however, options may be granted with different vesting terms as determined by the Company’s board of directors. During the year ended December 31, 2017, the Company granted 124,000 options with Standard Vesting Terms. During the year ended December 31, 2017, the Company granted restricted stock units under the 2013 Plan. The vesting periods for the restricted stock are subject to board approval and during the year ended December 31, 2017 varied from immediate to 36 months. During the year ended December 31, 2015, the Company granted restricted stock units under the 2013 Plan. On the date of grant, 7/12 of the restricted stock units vested immediately with 5/12 vesting equally over the five monthly anniversaries following the date of issuance of the award. One share of common stock is issuable for each vested restricted stock unit upon the earlier of the grantee’s separation of service or a change in control in the case of non-employee directors, or in the case of employees the board can decide to provide for the immediate issuance of common stock once vesting has occurred. As of December 31, 2017, there were 822,000 restricted stock units outstanding under the 2013 Plan. The following table summarizes the activity under the Company’s stock option plans for the year ended December 31, 2017 (in thousands, except exercise price and remaining contractual life data): WEIGHTED- AVERAGE WEIGHTED- REMAINING AVERAGE CONTRACTUAL AGGREGATE SHARES EXERCISE LIFE INTRINSIC OUTSTANDING PRICE (IN YEARS) VALUE Balances at December 31, 2016 3,397 $ 5.62 7.9 $ 1,599 Options granted 124 1.40 Options exercised (14 ) 1.21 Options cancelled (386 ) 5.77 Balances at December 31, 2017 3,121 5.45 6.9 114 Vested and expected to vest at December 31, 2017 2,847 5.81 6.8 95 Exercisable at December 31, 2017 2,124 7.19 6.2 47 The total intrinsic value of options exercised during the years ended December 31, 2017, 2016 and 2015 was $12,000, $20,000 and $35,000, respectively. The estimated fair value of options vested during the years ended December 31, 2017, 2016 and 2015 was $2,066,000, $2,466,000 and $4,950,000, respectively. The weighted-average estimated fair value of options granted during the years ended December 31, 2017, 2016 and 2015 was $0.63 per share, $0.61 per share and $0.75 per share, respectively. During the years ended December 31, 2017, 2016 and 2015, the Company recorded share-based compensation expense related to stock options of $1,937,000, $2,471,000 and $3,715,000, respectively. During the years ended December 31, 2017, 2016 and 2015, the Company did not realize any tax benefit associated with its share-based compensation expense as certain of the option grants were incentive stock options for which share-based compensation expense is not deductible and as a result of the full valuation allowance on the Company’s deferred tax assets (see Note 12). As of December 31, 2017, the total share-based compensation expense related to unvested options granted to employees under the Company’s stock option plans but not yet recognized was $521,000. This expense will be recognized on a straight-line basis over a weighted-average remaining term of 2.0 years. The following table summarizes shares available for grant under the Company’s stock incentive plans for the year ended December 31, 2017 (in thousands): SHARES AVAILABLE FOR GRANT Balances at December 31, 2016 1,622 Shares authorized 863 Options granted (124 ) Options cancelled 386 Restricted stock units granted (407 ) Balances at December 31, 2017 2,340 The following table summarizes the activity of restricted stock units for the year ended December 31, 2017 (in thousands, except weighted average grant date fair value): WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Nonvested at December 31, 2016 350 $ 0.75 Granted 407 1.07 Vested (422 ) 0.89 Nonvested at December 31, 2017 335 $ 0.94 The fair value of restricted stock units is determined based on the closing bid price of the Company’s common stock on the date of grant. During the years ended December 31, 2017, 2016 and 2015, the Company recognized $123,000, $198,000 and $96,000, respectively, of share-based compensation expense related to restricted stock units. Total share-based compensation expense related to restricted stock units not yet recognized as of December 31, 2017 was $314,000, which is expected to be recognized over a weighted average period of 1.3 years. |
Capital Leases
Capital Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Capital Leases | 10. Capital Leases The Company accounts for certain equipment acquired under financing arrangements as capital leases. This equipment is included in property, plant and equipment, and amortization of assets under capital leases is included in depreciation expense. As of December 31, 2017, the Company had no equipment acquired under capital leases. As of December 31, 2016 the cost of this equipment was $1,904,000 and accumulated amortization was $473,000. Amortization of capital leases during the years ended December 31, 2017, 2016 and 2015 totaled $194,000, $265,000 and $1,567,000, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 11. 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 terminated in October 2016. The lease includes negotiated annual increases in the monthly rental payments. In September 2013 and then amended in April 2014, the Company entered into a lease agreement 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 this 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. The Company recognizes expense under its operating leases on a straight-line basis over the terms of the leases. As of December 31, 2017, the Company’s aggregate contractual future minimum lease payments under non-cancelable lease agreements is as follows (in thousands): OPERATING LEASES Year Ended December 31, 2018 949 2019 615 Total minimum payments required $ 1,564 The Company incurred rent expense of $625,000, $959,000 and $1,102,000, during the years ended December 31, 2017, 2016 and 2015, respectively. 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. The Company recognized $60,000 from the sublease which offset the rental expense for the years ended December 31, 2017 and 2016. 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. 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 alleged 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 and that the Company’s independent registered public accounting firm committed professional negligence and malpractice. The issues in the 2014 Derivative Actions and 2015 Derivative Action overlap substantially with those at issue in the Class Action described above. On November 15, 2016, the Company, in its capacity as a nominal defendant, entered into a stipulation of settlement (the “Stipulation”) in the Derivative Actions. On January 11, 2017, the Superior Court of California, County of Yolo entered an order preliminarily approving the settlement set forth in the Stipulation, and on April 5, 2017, it entered the final order and judgment approving the settlement set forth in the Stipulation. The Stipulation provides for dismissal of the shareholder derivative actions as to the Company, the certain current and former officers and members of the board of directors and the Company’s independent registered public accounting firm, and the Company agrees to adopt or maintain certain corporate governance reforms for at least four years. The Stipulation also provides for attorneys’ fees and expenses to be paid by the Company’s insurers to plaintiffs’ counsel. On June 22, 2017, plaintiffs in the derivative action in the U.S. District Court for the Eastern District of California filed a Notice of Voluntary Dismissal with Prejudice, and the case was closed on June 23, 2017. 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 Securities Exchange Act of 1934. 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 expenses of $1,750,000 in its consolidated statements of operations for the year ended December 31, 2014 for an accrual of its estimate of the penalties arising from such enforcement action. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes As of December 31, 2017, the Company had net operating loss carryforwards for federal income tax reporting purposes of $215,973,000, which begin to expire in 2026, and California and various other state net operating loss carryforwards of $134,256,000 and $44,904,000, respectively, which will expire from 2028 through 2037. In addition, as of December 31, 2017, the Company had federal research and development tax credit carryforwards of $2,316,000, which begin to expire in 2026, and state research and development tax credit carryforwards of $2,476,000, which have no expiration date. The Company’s ability to utilize its federal and state net operating loss carryforwards and federal and state tax credit carryforwards to reduce future taxable income and future taxes, respectively, may be subject to restrictions attributable to equity transactions that may have resulted in a change in ownership as defined by Internal Revenue Code (“IRC”) Section 382. In the event that the Company has such a change in ownership, the Company’s utilization of these carryforwards could be severely restricted and could result in the expiration of a significant amount of these carryforwards prior to the Company recognizing their benefit. As of December 31, 2017, deferred tax assets of $64,531,000, arising primarily as a result of the Company’s net operating loss carryforwards, tax credits and certain costs capitalized for tax purposes, were fully offset by a valuation allowance. The valuation allowance decreased $15,473,000 for the year ended December 31, 2017 and increased by $11,035,000 and $15,241,000 during the years ended December 31, 2016 and 2015, respectively. The temporary timing differences that give rise to the deferred tax assets are as follows (in thousands): DECEMBER 31, 2017 2016 Components of deferred taxes: Net operating loss carryforwards $ 56,945 $ 71,329 Research and development tax credits 3,202 2,670 Other, net 4,384 6,005 Net deferred tax assets 64,531 80,004 Less valuation allowance (64,531 ) (80,004 ) Net deferred tax assets $ — $ — The Company had no deferred tax liabilities as of December 31, 2017 and 2016. The Company recognized no income tax expense and received no benefit from income taxes during the years ended December 31, 2017, 2016 and 2015. The provision for income taxes is different than the amount computed using the applicable statutory federal income tax rate with the difference for each year summarized below: DECEMBER 31, 2017 2016 2015 Federal tax benefit at statutory rate 34 % 34 % 34 % State tax benefit, net of federal benefit 3 4 5 Interest expense (2 ) (1 ) (1 ) Share-based compensation expense 5 (1 ) (2 ) Other — (1 ) — Change in federal deferred tax rate (90 ) Adjustment due to change in valuation allowance 50 (35 ) (36 ) Provision for income taxes — % — % — % As of December 31, 2017, the Company had unrecognized tax benefits of $1,201,000. The unrecognized tax benefits, if recognized, would not impact the Company’s effective tax rate as the recognition of these tax benefits would be offset by changes in the Company’s valuation allowance. The Company does not believe there will be any material changes in its unrecognized tax position during the next twelve months. A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): DECEMBER 31, 2017 2016 2015 Balance at January 1 $ 1,083 $ 982 $ 853 Increase related to prior year tax positions — — — Increase related to current year tax positions 118 101 129 Balance at December 31 $ 1,201 $ 1,083 $ 982 The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. The Company is subject to U.S. federal and state income tax examination for 2007 through 2016 due to unutilized net operating loss carryforwards and research and development tax credit carryforwards. The Tax Cuts and Jobs Act (the “Act”) was enacted on December 22, 2017. The Act reduces the US federal corporate tax rate from 35% to 21%. As of December 31, 2017, the Company has not completed the accounting for the tax effects of enactment of the Act; however, as described below, it has made a reasonable estimate of the effects on existing deferred tax balances. These amounts are provisional and subject to change. The most significant impact of the legislation for the Company was a $27,971,000 reduction of the value of the Company’s net deferred tax assets (which represent future tax benefits) as a result of lowering the U.S. corporate income tax rate from 35% to 21%. The Company will continue to refine its calculations of these provisional amounts as additional analysis is completed. In addition, the Company’s estimates for these provisional amounts may also be affected as the Company gains more thorough understanding of the tax law or as future guidance from the Internal Revenue Service or state tax agencies is issued. In December 2017, the Securities and Exchange Commission staff issued Staff Accounting Bulletin No. 118, which addresses how a company recognizes provisional amounts when a company does not have the necessary information available, prepared or analyzed (including computations) in reasonable detail to complete its accounting for the effect of the changes in the Tax Act. The measurement period ends when a company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
Dec. 31, 2017 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plan | 13. Employee Benefit Plan The Company offers a defined contribution plan to all eligible employees, which is qualified under Section 401(k) of the IRC. The Company currently provides a matching contribution based on a formula which provides for a dollar-for-dollar matching contribution of the employee’s 401(k) contribution up to 3% of eligible pay plus a 50% matching contribution on the employee’s 401(k) contribution between 3% and 5% of eligible pay. Each participant is 100% vested in elective contributions and the Company’s matching contribution. The Company provided 401(k) matching contributions during the years ended December 31, 2017, 2016 and 2015 of $317,000, $282,000 and $330,000, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 14. 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 December 31, 2017 was $37,822,000, net of unamortized debt discount of $2,178,000. The fair value of the Company’s debt due to related parties was $21,714,000 as of December 31, 2017. This debt was valued by applying the same ratio of the value of common stock the lender agreed to take as consideration for a reduction in the outstanding principal balance and applying this ratio to the outstanding principal balance. This is further discussed below and in Note 17. The August 2015 Senior Secured Promissory Notes contain customary covenants. In addition, from the date of the agreement through May 31, 2016, these notes contained the contractual obligation to maintain cash and cash equivalents of at least $15,000,000. On May 31, 2016, the terms of the August 2015 Secured Promissory Notes were amended to remove this minimum cash balance requirement. From the date of this agreement through May 31, 2016, $15,000,000 had been recorded as restricted cash and included in non-current assets. During 2015, the Company incurred $302,000 in financing-related costs, primarily legal fees. These costs were recorded as deferred financing costs as a component of current and non-current other assets and 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 December 31, 2017, the Company was in compliance with its covenants under the August 2015 Senior Secured Promissory Notes. On December 15, 2017, the Company entered into an amendment to change the terms of the October 2012 and April 2013 Secured Promissory Notes. The terms of the amendment were contingent upon the financing contemplated in the Purchase Agreement. See Note 17 for further discussion of the transaction contemplated by Waddell Notes Amendment. 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 years ended December 31, 2017 and 2016. During the year ended December 31, 2015 $492,000 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. |
Public Offerings
Public Offerings | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
Public Offerings | 15. Public Offerings In December 2016, the Company filed a shelf a registration statement on Form S-3 with the SEC that provides for the sale and issuance of up to $50.0 million of the Company’s common stock, preferred stock, debt securities, warrants, rights and/or units, including the ability to sell up to $15.0 million of the Company’s common stock through an at-the-market (“ATM”) program in accordance with an offering agreement the Company entered into with H.C. Wainwright. The Company began selling common shares under this registration statement in January 2017. As of December 31, 2017, the Company had sold 104,000 shares of common stock under at-the-market program at a weighted average exercise price of $2.22 per share for proceeds (net of commission) of $0.2 million, and $14.8 million remained available for sale under the agreement with H.C. Wainwright. In April 2017, the Company completed a public offering of 6,571,000 registered shares of its common stock (inclusive of |
Quarterly Financial Information
Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Quarterly Financial Information (Unaudited) | 16. Quarterly Financial Information (Unaudited) MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, 2017 2017 2017 2017 (In thousands, except per share data) Total revenues $ 4,154 $ 6,476 $ 4,219 $ 3,318 Gross profit (loss) 1,875 2,510 1,727 1,527 Net loss (7,629 ) (7,385 ) (8,530 ) (7,381 ) Basic and diluted net loss per common share $ (0.31 ) $ (0.25 ) $ (0.27 ) $ (0.24 ) MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, 2016 2016 2016 2016 (In thousands, except per share data) Total revenues $ 2,669 $ 5,049 $ 3,634 $ 2,690 Gross profit (loss) 400 1,931 1,141 1,048 Net loss (9,276 ) (6,783 ) (7,202 ) (7,810 ) Basic and diluted net loss per common share $ (0.38 ) $ (0.28 ) $ (0.29 ) $ (0.32 ) |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Event | 17. Subsequent Event Equity Financing and Debt Conversion to Equity On December 15, 2017, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors named therein, including Ospraie Ag Science LLC (“Ospraie”). On February 5, 2018, pursuant to the Purchase Agreement, the Company issued to these investors, an aggregate of 40,000,001 units, with each unit purchased consisting of one share of the Company’s common stock and one warrant to purchase one share of common stock, and each unit purchased by the investors consisting of one share of common stock and one warrant to purchase 0.8 shares of Common Stock, for an aggregate purchase price of $30,000,000, including the conversion to units of all aggregate principal amounts outstanding under the Purchase Agreement. Also on February 5, 2018, the Company converted, pursuant to an amendment, dated December 15, 2017, to the senior August 2015 Senior Secured Promissory Notes $35,000,000 aggregate principal amount of the August 2015 Senior Secured Promissory Notes into an aggregate of 20,000,000 shares of common stock and warrants to purchase 4,000,000 shares of common stock (such conversion, the “Waddell Debt Conversion”), such that $5,000,000 of principal under the August 2015 Senior Secured Promissory Notes now remains outstanding. Simultaneously with the Waddell Debt Conversion, the maturity of the August 2015 Senior Secured Promissory Notes was extended to December 31, 2022, all interest payments under the August 2015 Senior Secured Promissory Notes was deferred to maturity on December 31, 2022, and Ospraie was granted a right of first refusal to acquire the August 2015 Senior Secured Promissory Notes. As result of the extension of the maturity dates on the August 2015 Senior Secured Promissory Notes, the Company reclassified portions of these notes from short term to long term as of December 31, 2017. Also on February 5, 2018, the Company converted, pursuant to an amendment, dated December 15, 2017, to the October 2012 and April 2013 Secured Promissory Notes, $10,000,000 aggregate principal amount of indebtedness outstanding under the October 2012 and April 2013 Secured Promissory Notes to an aggregate of 5,714,285 shares of common stock and warrants to purchase 1,142,856 shares of common stock (such conversion, the “Snyder Debt Conversion”), such that $2,450,000 of principal under the October 2012 and April 2013 Secured Promissory Notes now remains outstanding. Simultaneously with the Snyder Debt Conversion, the maturity of the October 2012 and April 2013 Secured Promissory Notes was extended to December 31, 2022, the interest was reduced from 14% to 8% and all interest payments under the October 2012 and April 2013 Secured Promissory Notes were deferred to the maturity of the October 2012 and April 2013 Secured Promissory Notes on December 31, 2022. As result of the extension of the maturity dates on the August 2015 Senior Secured Promissory Notes, the Company reclassified portions of these notes from short term to long term as of December 31, 2017. In addition, in connection with its role as exclusive placement agent and financial adviser with respect to the transactions contemplated by the Purchase Agreement, National Securities Corporation (the “Placement Agent”) received warrants to purchase 2,017,143 shares of Common Stock, as well as 800,000 shares of Common Stock. The closing of the transactions contemplated by the Purchase Agreement, the Waddell Notes Amendment and the Snyder Loan Amendment (the “Transactions”) were subject to, among other conditions, the Company having obtained the approval of its stockholders at the Company’s 2017 Annual Meeting of Stockholders, which was held on January 31, 2018 (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved each of three proposals related to the Transactions. The Company has not yet determined the financial statement impact of these transactions on its financial statements. |
Significant Accounting Polici27
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States (“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 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. See Note 6 for further discussion. |
Derivative Liability | Deriviative Liability From time-to-time, the Company may issue convertible notes that contain embedded features that required derivative accounting. The Company’s convertible, debt as further discussed in Note 6, has an embedded derivative that required bifurcation from the host instrument. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments 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 and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 (in thousands): DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ — $ — $ — $ — DECEMBER 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,752 $ 3,752 $ — $ — The Company’s money market funds are held at registered investment companies. As of December 31, 2017, there were no money market funds. As of December 31, 2016, the money market funds were in active markets and, therefore, are measured based on the Level 1 valuation hierarchy. DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Liabilities Derivative liability $ 674 $ — $ — $ 674 DECEMBER 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Derivative liability $ — $ — $ — $ — The Company estimated the fair value of the derivative liability as of December 31, 2017 using an Option Pricing Model. The fair value is subjective and is affected by certain significant inputs to the valuation model, which are disclosed in the table below. The fair value of the derivative liability is based upon the outputs of the Option Pricing Model probability-weighted to reflect three different conversion option exercise dates. As the Option Pricing Model estimates the fair value of derivative liability using unobservable inputs, it is considered to be a Level 3 fair value measurement. As a result of the change in the estimated fair value between the issuance dates of the derivative liability issued beginning on October 12, 2017 and December 31, 2017, the Company recognized a net loss from the total change in estimated fair value of the derivative liabilities as shown in the tables below. This loss is included in the change in estimated fair value of derivative liability in the Company’s statement of operations. The following table provides a reconciliation of the activity between the issuance date and ending balances for the derivative liability measured at fair value using significant unobservable inputs (Level 3) (in thousands): WARRANT Fair value at December 31, 2016 $ — Derivative liability issued 578 Change in estimated fair value recorded of financial instruments 96 Fair value at December 31, 2017 $ 674 The following table represents significant unobservable inputs used in determining the fair value of the derivative liability: December 31, 2017 2016 Stock Price volatility 60 % — Risk-free rate 1.28 % — Probability weighted term in years 0.42 — |
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. During the years ended December 31, 2017, 2016 and 2015, 9%, 10% and 9%, respectively, of the Company’s revenues were generated from international customers. The Company’s principal sources of revenues were its Regalia, Grandevo, and Venerate product lines for the years ended December 31, 2017, 2016 and 2015, accounting for 87%, 89% and 96%, respectively, of the Company’s total revenues. 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 Year ended December 31, 2017 24 % 2 % 2016 25 % 3 % 2015 28 % 10 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either December 31, 2017 or 2016 consist of the following: Customer A B C D E F December 31, 2017 22 % 3 % —% 16 % 11 % 11 % December 31, 2016 21 % 10 % 14 % — % 1 % — % |
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 currently relies on one supplier for this plant. Such 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. While the Company does not have a long-term supply contract with this supplier, the Company does have a long term business relationship with this supplier. The Company endeavors to keep 6 months of knotweed extract on hand at any given time, but an unexpected disruption in supply could have an effect on Regalia supply and revenues. 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. |
Accounts Receivable | Accounts Receivable The carrying value of the Company’s receivables represents their estimated net realizable values. The Company generally does not require collateral and estimates any required allowance for doubtful accounts based on historical collection trends, the age of outstanding receivables and existing economic conditions. If events or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectablity of those balances and the allowance is recorded accordingly. Past-due receivable balances are written-off when the Company’s internal collection efforts have been unsuccessful in collecting the amount due. During the years ended December 31, 2017, 2016 and 2015, no receivables balances were written off. As of December 31, 2017 and 2016, the Company had no allowance for doubtful accounts. |
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. During the year ended December 31, 2017, the Company recorded, as a component of cost of product revenues, adjustments to inventory reserves of $125,000 due to quantities on hand that may not be used or sold prior to expiration, and an adjustment of $224,000 as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity. During the year ended December 31, 2016, the Company recorded, as a component of cost of product revenues, adjustments to inventory reserves of $177,000 due to quantities on hand that may not be used or sold prior to expiration, and an adjustment of $771,000 as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity. During the year ended December 31, 2015, the Company recorded, as a component of cost of product revenues, adjustments to inventory reserves of $19,000 due to quantities on hand that may not be used or sold prior to expiration, and an adjustment of $2,545,000 as a result of actual utilization of the Company’s manufacturing plant being less than what is considered normal capacity. Inventories, net consist of the following (in thousands): DECEMBER 31, 2017 2016 Raw materials $ 2,310 $ 3,491 Work in progress 2,441 2,044 Finished goods 5,076 2,947 $ 9,827 $ 8,482 As of December 31, 2017 and 2016, the Company had $252,000 and $127,000, respectively, in reserves against its inventories. |
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 December 31, 2017 and 2016, the Company recorded deferred cost of product revenues of $3,063,000 and $2,688,000, respectively. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost and are depreciated using the straight-line method over their estimated useful lives. The Company generally uses the following estimated useful lives for each asset category: ASSET CATEGORY ESTIMATED USEFUL LIFE Building 30 years Computer equipment 2-3 years Machinery and equipment 3-20 years Office equipment 3-5 years Furniture 3-5 years Leasehold improvements Shorter of lease term or useful life Software 3 years Amortization of assets under capital leases is included in depreciation expense. Maintenance, repairs and minor renewals are expensed as incurred. Expenditures that substantially increase an asset’s useful life are capitalized. The Company recognized a combined loss on disposals or impairment charge totaling $369,000 for the year ended December 31, 2017 on these disposed or held for sale assets. The Company included the loss on disposal or impairment charge in selling, general and administrative expenses. During the year ended December 31, 2016, the Company identified certain equipment that it intended to dispose of or sell in the near term. The estimated net realizable value of this equipment was $70,000 and determined using third-party appraisals. These items were classified as held for sale and were valued based on unobservable inputs and classified as Level 3 within the fair value hierarchy. These assets were classified in prepaid expenses as of December 31, 2016 and disposed of or sold during the year ended December 31, 2017. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Impairment losses related to long-lived assets are recognized in the event the net carrying value of such assets is not recoverable and exceeds fair value. The Company evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The carrying amount of a long-lived asset (asset group) is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset (asset group). If the carrying amount of a long-lived asset (asset group) is considered is not recoverable, the impairment loss is measured as the amount by which the carrying value of the asset group exceeds its estimated fair value. |
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 December 31, 2017 and 2016, the Company recorded deferred product revenues of $6,451,000 and $5,411,000, respectively. 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. During the years ended December 31, 2017, 2016 and 2015, 39%, 44%, and 47%, respectively, of total revenues were recognized on a sell-through basis. 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. The Company received no payments under these distribution agreements during the year ended December 31, 2017. During the year ended December 31, 2016, the Company received payments totaling $300,000 under these agreements. During the year ended December 31, 2015, the Company received payments totaling $750,000 under these agreements. During the years ended December 31, 2017, 2016 and 2015, the Company recognized $232,000, $327,000 and $333,000, respectively, as license revenues, excluding related party revenues. As of December 31, 2017, the Company recorded current and non-current deferred revenues of $233,000 and $1,557,000, respectively, related to payments received under these agreements. As of December 31, 2016, the Company recorded current and non-current deferred revenues of $236,000 and $1,787,000, 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. During the years ended December 31, 2017, 2016 and 2015, research and development expenses totaled $9,711,000, $8,654,000 and $12,392,000, respectively, and patent expenses totaled $1,109,000, $1,016,000, and $1,108,000, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs Amounts billed for shipping and handling are included as a component of product revenues. Related costs for shipping and handling have been included as a component of cost of product revenues. |
Advertising | Advertising The Company expenses advertising costs as incurred. Advertising costs for the years ended December 31, 2017, 2016 and 2015 were $386,000, $213,000 and $456,000, respectively. |
Share-Based Compensation | Share-Based Compensation The Company recognizes share-based compensation expense for all stock options and restricted stock units granted to employees and directors based on estimated fair values. The Company estimates the fair value of restricted stock units based on the closing bid price of the Company’s common stock on the date of grant. The Company estimates the fair value of stock options on the date of grant using an option-pricing model. The value of the portion of the stock options that is ultimately expected to vest is recognized as expense on a straight-line basis over the requisite service period. Forfeitures are estimated on the date of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. The Company uses the Black-Scholes-Merton option-pricing model to calculate the estimated fair value of stock options on the measurement date (generally, the date of grant). The required inputs in the option-pricing model include the expected life of the stock options, estimated volatility factor, risk-free interest rate and expected dividend yield. These inputs are subjective and generally require significant judgment. During the years ended December 31, 2017, 2016 and 2015, the Company calculated the fair value of stock options granted based on the following assumptions: YEAR ENDED DECEMBER 31, 2017 2016 2015 Expected life (years) 6.08 5.85-6.08 6.08 Estimated volatility factor 43%-45% 45%-46% 46%-47% Risk-free interest rate 1.82%-2.30% 1.13%-2.18% 1.86%-1.93% Expected dividend yield — — — Expected Life Share-Based Payment Simplified Method for Plain Vanilla Share Options Estimated Volatility Factor Risk-Free Interest Rate Expected Dividend Yield Estimated Forfeitures |
Income Taxes | Income Taxes The Company uses the asset and liability method of accounting for income taxes. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. To the extent that deferred tax assets cannot be recognized under the preceding criteria, the Company establishes valuation allowances, as necessary, to reduce deferred tax assets to the amounts expected to be realized. As of December 31, 2017 and 2016, all deferred tax assets were fully offset by a valuation allowance. The realization of deferred tax assets is dependent upon future federal, state and foreign taxable income. The Company’s judgments regarding deferred tax assets may change due to future market conditions, as the Company expands into international jurisdictions, due to changes in U.S. or international tax laws and other factors. These changes, if any, may require material adjustments to the Company’s deferred tax assets, resulting in a reduction in net income or an increase in net loss in the period in which such determinations are made. The Company recognizes liabilities for uncertain tax positions based upon a two-step process. To the extent that a tax position does not meet a more-likely-than-not level of certainty, no benefit is recognized in the consolidated financial statements. If a tax position meets the more-likely-than-not level of certainty, it is recognized in the consolidated financial statements at the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement. The Company’s policy is to analyze the Company’s tax positions taken with respect to all applicable income tax issues for all open tax years in each respective jurisdiction. As of December 31, 2017 and 2016, the Company concluded that there were no additional uncertain tax positions were required to be recognized in its consolidated financial statements. The Company recognizes interest and penalties related to income tax matters in income tax expense. No amounts were recognized for interest and penalties during the years ended December 31, 2017, 2016 and 2015. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss represents the net loss for the period adjusted for the results of certain changes to stockholders’ equity (deficit) that are not reflected in the consolidated statements of operations, if applicable. Net loss is the only component of the Company’s comprehensive loss for the periods presented. |
Segment Information | Segment Information The Company is organized as a single operating segment, whereby its chief operating decision maker assesses the performance of and allocates resources to the business as a whole. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In November 2015, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2015-17, Balance Sheet Classification of Deferred Taxes (“ASU 2015-17”), which amends the current requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet. Organizations will now be required to classify all deferred tax assets and liabilities as noncurrent. ASU 2015-17 is effective for public companies for financial statements issued for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The amendments may be applied prospectively to all deferred tax liabilities and assets or retrospectively to all periods presented. The Company adopted ASU 2015-17 effective January 1, 2017. Adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In March 2016, the FASB issued Accounting Standards Update No. 2016-09, Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (“ASU 2016-09”). The amendments are effective for public companies for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Several aspects of the accounting for share-based payment award transactions are simplified, including: (a) income tax consequences; (b) classification of awards as either equity or liabilities; and (c) classification on the statement of cash flows. The Company adopted ASU 2016-09 effective January 1, 2017. Adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flows. In July 2015, the FASB issued Accounting Standards Update No. 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory (“ASU 2015-11”), which applies guidance on the subsequent measurement of inventory. ASU 2015-11 states that an entity should measure inventory at the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less reasonable predictable costs of completion, disposal and transportation. The guidance excludes inventory measured using last-in, first-out or the retail inventory method. ASU 2015-11 is effective for interim and annual reporting periods beginning after December 15, 2016 including interim periods within those fiscal years. Early adoption is permitted. The Company did not early adopt ASU 2015-11. The Company adopted ASU 2015-11 effective January 1, 2017. Adoption of this standard did not have a material impact on the Company’s consolidated financial position, results of operations or cash flow. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2016, the FASB issued Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendments in this update clarify how certain cash receipts and cash payments are presented and classified in the statement of cash flows. ASU No. 2016-15 will be effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company has not elected to early adopt this guidance and is currently evaluating ASU 2016-15 to determine the impact to its consolidated financial statements. In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 introduces a new forward-looking approach, based on expected losses, to estimate credit losses on certain types of financial instruments, including trade receivables. The estimate of expected credit losses will require entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. ASU 2016-13 also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. For public business entities that meet the definition of a Securities and Exchange Commission filer, ASU 2016-13 is effective for annual and interim reporting periods beginning after December 15, 2019, and the guidance is to be applied using the modified-retrospective approach. Earlier adoption is permitted for annual and interim reporting periods beginning after December 15, 2018. The Company is currently evaluating ASU 2016-13 to determine the impact to its consolidated financial statements and related disclosures. In February 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (Topic 842) Leases: Amendments to the FASB Accounting Standards Codifications (“ASU 2016-02”), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. ASU 2016-02 is effective for public companies for financial statements issued for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted. Companies must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. Lessees and lessors may not apply a full retrospective transition approach. The Company is currently evaluating ASU 2016-02 to determine the potential impact to its consolidated financial statements and related disclosures. 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 (“ASU 2016-01”). ASU 2016-01 applies to all entities that hold financial assets or owe financial liabilities and is intended to provide more useful information on the recognition, measurement, presentation and disclosure of financial instruments. Among other things, ASU 2016-01 (i) requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income; (ii) simplifies the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment; (iii) eliminates the requirement to disclose the fair value of financial instruments measured at amortized cost for entities that are not public business entities; (iv) eliminates the requirement for public business entities to disclose the method(s) and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet; (v) requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes; (vi) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; (vii) requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset (that is, securities or loans and receivables) on the balance sheet or the accompanying notes to the financial statements; and (viii) clarifies that an entity should evaluate the need for a valuation allowance on a deferred tax asset related to available-for-sale securities in combination with the entity’s other deferred tax assets. For public business entities, ASU 2016-01 is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. The Company is currently evaluating ASU 2016-01 to determine the potential impact to its consolidated financial statements and related disclosures. In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers The Company has assessed significant impacts of the new guidance on its accounting policies and procedures and has evaluated the new requirements as applied to existing revenue contracts. The Company believes the most significant impact will relate to the recognition of product sales made to distributors. The Company currently recognizes revenue from the sale of products made to distributors on either a sell-in or sell-through basis depending on the specific circumstances of the arrangement. The new guidance is currently expected to result in an acceleration of revenue as under the new standard, the Company may no longer be required to defer revenues related to distributors that are currently recognized on the sell-through basis. Under the new guidance, the Company will be required to make estimates and evaluate assumptions related to the amount of net contract revenues, including the impact of any forms of variable consideration. These estimates could result in the deferral of revenue. In addition, the new guidance is currently expected to result in expanded disclosures related to variable consideration and the judgments used to estimate it. When the Company adopts the new revenue standard, the Company estimates that the adjustment to its accumulated deficit, deferred revenues and deferred cost of product revenues will be material. The Company is still in the process of estimating the necessary adjustments associated with ASU 2014-09. The Company has reviewed its revenue contracts and is implementing the new guidance for the first quarter of 2018. The Company is also proceeding with updates to its business processes, systems and controls to fully comply with ASU 2014-09. |
Significant Accounting Polici28
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Assets Measured at Fair Value On Recurring Basis | The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and 2016 (in thousands): DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ — $ — $ — $ — DECEMBER 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Assets Money market funds $ 3,752 $ 3,752 $ — $ — |
Schedule of Derivative Liability Level 1 Valuation Hierarchy | The Company’s money market funds are held at registered investment companies. As of December 31, 2017, there were no money market funds. As of December 31, 2016, the money market funds were in active markets and, therefore, are measured based on the Level 1 valuation hierarchy. DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Liabilities Derivative liability $ 674 $ — $ — $ 674 DECEMBER 31, 2016 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Derivative liability $ — $ — $ — $ — |
Schedule of Derivative Liability Measured at Fair Value Using Unobservable Inputs | The following table provides a reconciliation of the activity between the issuance date and ending balances for the derivative liability measured at fair value using significant unobservable inputs (Level 3) (in thousands): WARRANT Fair value at December 31, 2016 $ — Derivative liability issued 578 Change in estimated fair value recorded of financial instruments 96 Fair value at December 31, 2017 $ 674 |
Schedule of Fair Value of Derivative Liability | The following table represents significant unobservable inputs used in determining the fair value of the derivative liability: December 31, 2017 2016 Stock Price volatility 60 % — Risk-free rate 1.28 % — Probability weighted term in years 0.42 — |
Schedule of Significant Customer's Revenues and Account Receivable 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 Year ended December 31, 2017 24 % 2 % 2016 25 % 3 % 2015 28 % 10 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either December 31, 2017 or 2016 consist of the following: Customer A B C D E F December 31, 2017 22 % 3 % —% 16 % 11 % 11 % December 31, 2016 21 % 10 % 14 % — % 1 % — % |
Schedule of Inventories, Net | Inventories, net consist of the following (in thousands): DECEMBER 31, 2017 2016 Raw materials $ 2,310 $ 3,491 Work in progress 2,441 2,044 Finished goods 5,076 2,947 $ 9,827 $ 8,482 |
Summary of Property, Plant and Equipment Estimated Useful Lives | Property, plant and equipment are recorded at cost and are depreciated using the straight-line method over their estimated useful lives. The Company generally uses the following estimated useful lives for each asset category: ASSET CATEGORY ESTIMATED USEFUL LIFE Building 30 years Computer equipment 2-3 years Machinery and equipment 3-20 years Office equipment 3-5 years Furniture 3-5 years Leasehold improvements Shorter of lease term or useful life Software 3 years |
Fair Value Assumptions of Stock Options Granted | These inputs are subjective and generally require significant judgment. During the years ended December 31, 2017, 2016 and 2015, the Company calculated the fair value of stock options granted based on the following assumptions: YEAR ENDED DECEMBER 31, 2017 2016 2015 Expected life (years) 6.08 5.85-6.08 6.08 Estimated volatility factor 43%-45% 45%-46% 46%-47% Risk-free interest rate 1.82%-2.30% 1.13%-2.18% 1.86%-1.93% Expected dividend yield — — — |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consist of the following (in thousands): DECEMBER 31, 2017 2016 Land $ 1 $ 1 Buildings 6,528 6,528 Computer equipment and software 522 522 Furniture, fixtures and office equipment 343 352 Machinery and equipment 15,302 14,887 Leasehold improvements 2,373 2,373 Construction in progress 218 7 25,287 24,670 Less accumulated depreciation (9,271 ) (7,327 ) $ 16,016 $ 17,343 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
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): DECEMBER 31, 2017 2016 2015 Stock options outstanding 3,121 3,397 2,116 Warrants to purchase common stock 4,232 4,152 4,027 Restricted stock units outstanding 822 415 107 Convertible notes payable 4,005 — — |
Computation of Common Shares Upon Exercise of Warrants and Basic and Diluted Net Loss Per Share | 2017 2016 2015 (In thousands, except per share data) Numerator: Net loss $ (30,925 ) $ (31,071 ) $ (43,728 ) Denominator Weighted average shares outstanding used for basic and diluted net loss per share 29,235 24,617 24,469 Basic and diluted net loss per share $ (1.06 ) $ (1.26 ) $ (1.79 ) |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): DECEMBER 31, 2017 2016 Accrued compensation $ 1,825 $ 1,403 Accrued warranty costs 556 754 Accrued legal costs 1,558 569 Accrued customer incentives 1,986 639 Accrued liabilities, other 2,264 2,143 $ 8,189 $ 5,508 |
Schedule of Changes in Accrued Warranty Costs | . 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, 2016 $ 754 Warranties issued (released) during the period (188 ) Settlements made during the period (10 ) Balance at December 31, 2017 $ 556 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Including Debt to Related Parties | Debt, including debt due to related parties, consists of the following (in thousands): DECEMBER 31, 2017 2016 Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 14.00% per annum, payable monthly through October 2018, collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of December 31, 2017 and December 31, 2016 of $103 and $228, respectively, discount is based on imputed interest rate of 15.5% $ 12,347 $ 12,222 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (6.5% as of December 31, 2017) 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 December 31, 2017 and December 31, 2016 of $226 and $247, respectively, discount is based on imputed interest rate of 6.6% 8,872 9,113 Senior secured convertible promissory notes (“December 2017 Convertible Note”) Senior Secured Promissory Notes”) bearing interest at 1% per annum, interest and principal due at maturity (October 2020), collateralized by substantially all of the Company’s assets, net of unamortized discount as of December 31, 2017 of $510 based on imputed interest rate of 54.6% 3,490 — Secured revolving borrowing (“LSQ Financing”) bearing interest at (13.6% annually) payable through the lenders direct collection of certain accounts receivable through March 2018, collateralized by substantially all of the Company’s personal property, net of unamortized debt discount as of December 31, 2017 and December 31, 2016 of $54 and $0, respectively, which is amortized on a straight-line basis 1,222 — 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 discount as of December 31, 2017 and December 31, 2016 of $2,178 and $3,333, respectively debt discount is based on imputed interest rate of 11.0% (see Note 14) 37,822 36,667 Debt, including debt due to related parties 63,753 58,002 Less debt due to related parties (37,822 ) (36,667 ) Less current portion (1,524 ) (252 ) $ 24,407 $ 21,083 |
Schedule of Aggregate Contractual Future Principal Payments Due on Company's Debt Including Debt to Related Parties | As of December 31, 2017, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties, are due as follows (in thousands): Year Ended December 31, 2018 23,988 2019 10,279 2020 24,296 2021 318 2022 339 Thereafter 7,604 Total future principal payments $ 66,824 |
Activity Related to Secured Promissory Note | Activity related to the October 2012 and April 2013 Secured Promissory Notes from December 31, 2016 through December 31, 2017 consisted of the following (in thousands): DECEMBER 31, AMORTIZATION PRINCIPAL DECEMBER 31, 2016 ADDITIONS OF DEBT PAYMENTS 2017 Principal $ 12,450 $ — $ — $ — $ 12,450 Debt discount related to the issuance of common stock warrants (1) (203 ) — 111 — (92 ) Discount related to the $3,750,000 Notes (1) (25 ) — 14 — (11 ) $ 12,222 $ — $ 125 $ — $ 12,347 (1) The amortization of this account is included in interest expense in the consolidated statements of operations and as non-cash interest expense in the consolidated statements of cash flows. |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
Summary of Information about Common Stock Warrants Outstanding | The following table summarizes information about the Company’s common stock warrants outstanding as of December 31, 2017 (in thousands, except exercise price data): NUMBER OF SHARES SUBJECT TO EXPIRATION WARRANTS EXERCISE DESCRIPTION ISSUE DATE DATE ISSUED PRICE In connection with June 2013 Credit Facility (June 2013 Warrants) June 2013 June 2023 (1) 27 $ 8.40 In connection with August 2015 Senior Secured Promissory Notes (August 2015 Warrants) August 2015 August 2023 4,000 1.91 In connection with October 2012 and April 2013 Secured Promissory Notes (November 2016 Warrants) November 2016 November 2026 125 2.38 In connection with June 2017 Consulting Agreement (June 2017 Warrants) June 2017 June 2027 80 1.10 4,232 (1) The June 2013 Warrants expire upon the earlier to occur of (i) the date listed above; (ii) the acquisition of the Company by another entity by means of any transaction or series of related transactions (including, without limitation, any transfer of more than 50% of the voting power of the Company, reorganization, merger or consolidation, but excluding any merger effected exclusively for the purpose of changing the domicile of the Company); or (iii) a sale of all or substantially all of the assets of the Company unless the Company’s stockholders of record as constituted immediately prior to such acquisition or sale will, immediately after such acquisition or sale (by virtue of securities issued as consideration for the Company’s acquisition or sale or otherwise), hold at least fifty percent (50%) of the voting power of the surviving or acquiring entity. |
Common Stock (Tables)
Common Stock (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Notes to Financial Statements | |
Reserved Shares of Common Stock for Future Issuances | As of December 31, 2017, the Company had reserved shares of common stock for future issuances as follows (in thousands): SHARES Shares available for future grant under stock incentive plans 2,340 Stock options outstanding 3,121 Warrants to purchase common stock 4,232 Restricted stock units 822 Convertible notes payable 4,005 14,520 |
Stock Option Plans (Tables)
Stock Option Plans (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Activity under Company's Stock Option Plans and Shares Available for Grant under Company's Stock Incentive Plans | The following table summarizes the activity under the Company’s stock option plans for the year ended December 31, 2017 (in thousands, except exercise price and remaining contractual life data): WEIGHTED- AVERAGE WEIGHTED- REMAINING AVERAGE CONTRACTUAL AGGREGATE SHARES EXERCISE LIFE INTRINSIC OUTSTANDING PRICE (IN YEARS) VALUE Balances at December 31, 2016 3,397 $ 5.62 7.9 $ 1,599 Options granted 124 1.40 Options exercised (14 ) 1.21 Options cancelled (386 ) 5.77 Balances at December 31, 2017 3,121 5.45 6.9 114 Vested and expected to vest at December 31, 2017 2,847 5.81 6.8 95 Exercisable at December 31, 2017 2,124 7.19 6.2 47 |
Stock Incentive Plan [Member] | |
Summary of Activity under Company's Stock Option Plans and Shares Available for Grant under Company's Stock Incentive Plans | The following table summarizes shares available for grant under the Company’s stock incentive plans for the year ended December 31, 2017 (in thousands): SHARES AVAILABLE FOR GRANT Balances at December 31, 2016 1,622 Shares authorized 863 Options granted (124 ) Options cancelled 386 Restricted stock units granted (407 ) Balances at December 31, 2017 2,340 |
Restricted Stock Units [Member] | |
Summary of Restricted Stock Units Activity | The following table summarizes the activity of restricted stock units for the year ended December 31, 2017 (in thousands, except weighted average grant date fair value): WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Nonvested at December 31, 2016 350 $ 0.75 Granted 407 1.07 Vested (422 ) 0.89 Nonvested at December 31, 2017 335 $ 0.94 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments And Contingencies Tables | |
Schedule of Non-Cancelable Lease Agreements | As of December 31, 2017, the Company’s aggregate contractual future minimum lease payments under non-cancelable lease agreements is as follows (in thousands): OPERATING LEASES Year Ended December 31, 2018 949 2019 615 Total minimum payments required $ 1,564 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets | The temporary timing differences that give rise to the deferred tax assets are as follows (in thousands): DECEMBER 31, 2017 2016 Components of deferred taxes: Net operating loss carryforwards $ 56,945 $ 71,329 Research and development tax credits 3,202 2,670 Other, net 4,384 6,005 Net deferred tax assets 64,531 80,004 Less valuation allowance (64,531 ) (80,004 ) Net deferred tax assets $ — $ — |
Reconciliation of Effective Income Tax Rate to US Federal Income Tax Statutory Rate | The provision for income taxes is different than the amount computed using the applicable statutory federal income tax rate with the difference for each year summarized below: DECEMBER 31, 2017 2016 2015 Federal tax benefit at statutory rate 34 % 34 % 34 % State tax benefit, net of federal benefit 3 4 5 Interest expense (2 ) (1 ) (1 ) Share-based compensation expense 5 (1 ) (2 ) Other — (1 ) — Change in federal deferred tax rate (90 ) Adjustment due to change in valuation allowance 50 (35 ) (36 ) Provision for income taxes — % — % — % |
Reconciliation of Beginning and Ending Unrecognized Tax Benefits | A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands): DECEMBER 31, 2017 2016 2015 Balance at January 1 $ 1,083 $ 982 $ 853 Increase related to prior year tax positions — — — Increase related to current year tax positions 118 101 129 Balance at December 31 $ 1,201 $ 1,083 $ 982 |
Quarterly Financial Informati38
Quarterly Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Quarterly Financial Information | MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, 2017 2017 2017 2017 (In thousands, except per share data) Total revenues $ 4,154 $ 6,476 $ 4,219 $ 3,318 Gross profit (loss) 1,875 2,510 1,727 1,527 Net loss (7,629 ) (7,385 ) (8,530 ) (7,381 ) Basic and diluted net loss per common share $ (0.31 ) $ (0.25 ) $ (0.27 ) $ (0.24 ) MARCH 31, JUNE 30, SEPTEMBER 30, DECEMBER 31, 2016 2016 2016 2016 (In thousands, except per share data) Total revenues $ 2,669 $ 5,049 $ 3,634 $ 2,690 Gross profit (loss) 400 1,931 1,141 1,048 Net loss (9,276 ) (6,783 ) (7,202 ) (7,810 ) Basic and diluted net loss per common share $ (0.38 ) $ (0.28 ) $ (0.29 ) $ (0.32 ) |
Summary of Business, Basis of39
Summary of Business, Basis of Presentation and Liquidity (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Date of incorporation | Jun. 15, 2006 | |||
Debt agreements financial and non-financial covenants | As of December 31, 2017, the Company had an accumulated deficit of $265,914,000 has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future. Until the completion of the IPO in August 2013, the Company had funded operations primarily with net proceeds from the private placements of convertible preferred stock, convertible notes, 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 December 31, 2017, the Company had a working capital deficit of $3,083,000, including cash and cash equivalents of $786,000. | |||
Accumulated deficit | $ 265,572 | $ 234,647 | ||
Working capital | 2,884 | |||
Cash and cash equivalents | 786 | 9,609 | $ 19,838 | $ 35,324 |
Debt excluding related parties | 25,931 | |||
Debt due to related parties | 37,822 | 36,667 | ||
Restricted cash | 2,047 | |||
Securities Purchase Agreement [Member] | ||||
Aggregate purchase price of common stock | $ 30,000 | |||
Maximum [Member] | ||||
Sale and issuance value of stock, debt securities and warrants authorized | 50,000 | |||
Sell value of common stock through at-the-market program accordance with offering agreement | $ 15,000 |
Significant Accounting Polici40
Significant Accounting Policies (Details Narrative) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017USD ($)Number | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Concentration risk, supplier | The active ingredient in the Companys Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such 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 Companys manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long term business relationship with this supplier. The Company endeavors to keep 6 months of knotweed extract on hand at any given time, but an unexpected disruption in supply could have an effect on Regalia supply and revenues. 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. | ||
Allowance for doubtful accounts | |||
Adjustment to inventory reserves | 125 | 177 | 19 |
Adjustment of actual utilization of manufacturing plant | 224 | 771 | $ 2,545 |
Reserves against inventories | 252 | 127 | |
Deferred cost of product revenues | 3,063 | 2,688 | |
Impairment charge | 369 | ||
Estimated net realizable value of equipment | 70 | ||
Current deferred product revenues | $ 6,193 | $ 5,647 | |
Percentage of total revenue recognized on sell-through basis | 39.00% | 44.00% | 47.00% |
Deferred payments received | $ 300 | $ 750 | |
Recognized license revenues | 232 | 327 | 333 |
Non-current deferred revenues | 2,046 | 1,787 | |
Research and development expenses | 9,711 | 8,654 | 12,392 |
Patent expenses | 1,109 | 1,016 | 1,108 |
Advertising costs | $ 386 | 213 | 456 |
Percentage of recognized uncertain tax position upon ultimate settlement | 50.00% | ||
Uncertain tax positions | |||
Interest and penalties related to income tax | |||
Operating segment | Number | 1 | ||
Strategic Collaboration and Distribution Agreements [Member] | |||
Current deferred product revenues | $ 233 | 236 | |
Non-current deferred revenues | $ 1,557 | $ 1,787 | |
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | International [Member] | |||
Customers accounted for percentage of company's total revenues | 9.00% | 10.00% | 9.00% |
Sales Revenue Net [Member] | Product Concentration Risk [Member] | |||
Customers accounted for percentage of company's total revenues | 87.00% | 89.00% | 96.00% |
Maximum [Member] | |||
Receivables due period | 120 days |
Significant Accounting Polici41
Significant Accounting Policies - Assets Measured at Fair Value on Recurring Basis (Details) - Money Market Funds [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Assets at fair value | $ 3,752 | |
Quoted Prices in Active Markets for Identical Assets or Liabilities Level 1 [Member] | ||
Assets at fair value | 3,752 | |
Observable Inputs Other Than Quoted Prices in Active Markets for Identical Assets and Liabilities Level 2 [Member] | ||
Assets at fair value | ||
Unobservable Inputs Level 3 [Member] | ||
Assets at fair value |
Significant Accounting Polici42
Significant Accounting Policies - Schedule of Derivative Liability Level 1 Valuation Hierarchy (Details) - Derivative Liability [Member] - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Derivative liability | $ 674 | |
Quoted Prices in Active Markets for Identical Assets or Liabilities Level 1 [Member] | ||
Derivative liability | ||
Observable Inputs Other Than Quoted Prices in Active Markets for Identical Assets and Liabilities Level 2 [Member] | ||
Derivative liability | ||
Unobservable Inputs Level 3 [Member] | ||
Derivative liability | $ 674 |
Significant Accounting Polici43
Significant Accounting Policies - Schedule of Derivative Liability Measured at Fair Value Using Unobservable Inputs (Details) - Unobservable Inputs Level 3 [Member] - Warrant Liability [Member] $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Fair value at December 31, 2016 | |
Derivative liability issued | 578 |
Change in estimated fair value recorded of financial instruments | 96 |
Fair value at December 31, 2017 | $ 674 |
Significant Accounting Polici44
Significant Accounting Policies - Schedule of Fair Value of Derivative Liability (Details) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Accounting Policies [Abstract] | ||
Stock Price volatility | 60.00% | |
Risk-free rate | 1.28% | |
Probability weighted term in years | 5 months 1 day | 0 years |
Significant Accounting Polici45
Significant Accounting Policies - Schedule of Risk Percentage (Details) - Customer Concentration Risk [Member] | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Customer A [Member] | Sales Revenue Net [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 24.00% | 25.00% | 28.00% |
Customer A [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 22.00% | 21.00% | |
Customer B [Member] | Sales Revenue Net [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 2.00% | 3.00% | 10.00% |
Customer B [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 3.00% | 10.00% | |
Customer C [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 0.00% | 14.00% | |
Customer D [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 16.00% | 0.00% | |
Customer E [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 11.00% | 1.00% | |
Customer F [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 11.00% | 0.00% |
Significant Accounting Polici46
Significant Accounting Policies - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||
Raw materials | $ 2,310 | $ 3,491 |
Work in progress | 2,441 | 2,044 |
Finished goods | 5,076 | 2,947 |
Inventories, total | $ 9,827 | $ 8,482 |
Significant Accounting Polici47
Significant Accounting Policies - Summary of Property, Plant and Equipment Estimated Useful Lives (Details) | 12 Months Ended |
Dec. 31, 2017 | |
Building [Member] | |
Property, plant and equipment, estimated useful life | 30 years |
Computer Equipment and Software [Member] | Minimum [Member] | |
Property, plant and equipment, estimated useful life | 2 years |
Computer Equipment and Software [Member] | Maximum [Member] | |
Property, plant and equipment, estimated useful life | 3 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Property, plant and equipment, estimated useful life | 3 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Property, plant and equipment, estimated useful life | 20 years |
Office Equipment [Member] | Minimum [Member] | |
Property, plant and equipment, estimated useful life | 3 years |
Office Equipment [Member] | Maximum [Member] | |
Property, plant and equipment, estimated useful life | 5 years |
Furniture [Member] | Minimum [Member] | |
Property, plant and equipment, estimated useful life | 3 years |
Furniture [Member] | Maximum [Member] | |
Property, plant and equipment, estimated useful life | 5 years |
Leasehold Improvements [Member] | |
Property, plant and equipment, estimated useful life, description | Shorter of lease term or useful life |
Software [Member] | |
Property, plant and equipment, estimated useful life | 3 years |
Significant Accounting Polici48
Significant Accounting Policies - Fair Value Assumptions of Stock Options Granted (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Expected life (years) | 6 years 29 days | 6 years 29 days | |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum [Member] | |||
Expected life (years) | 5 years 10 months 6 days | ||
Estimated volatility factor | 43.00% | 45.00% | 46.00% |
Risk-free interest rate | 1.82% | 1.13% | 1.86% |
Maximum [Member] | |||
Expected life (years) | 6 years 29 days | ||
Estimated volatility factor | 45.00% | 46.00% | 47.00% |
Risk-free interest rate | 2.30% | 2.18% | 1.93% |
Property, Plant and Equipment49
Property, Plant and Equipment (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 2,044 | $ 2,235 | $ 3,510 |
Property, Plant and Equipment -
Property, Plant and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 25,287 | $ 24,670 |
Less accumulated depreciation | (9,271) | (7,327) |
Property, plant and equipment, net | 16,016 | 17,343 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1 | 1 |
Building [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 6,528 | 6,528 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 522 | 522 |
Furniture, Fixtures and Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 343 | 352 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 15,302 | 14,887 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 2,373 | 2,373 |
Construction in Progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 218 | $ 7 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Anti-dilutive Securities Excluded from Computation of Diluted Net Loss Per Share (Details) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Convertible Notes Payable [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earning per share | |||
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 | 3,121,000 | 3,397,000 | 2,116,000 |
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 | 4,232,000 | 4,152,000 | 4,027,000 |
Restricted Stock Units [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earning per share | 822,000 | 415,000 | 107,000 |
Convertible Notes Payable [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from computation of earning per share | 4,005,000 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Common Shares Upon Exercise of Warrants and Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | |||||||||||
Net loss | $ (7,381) | $ (8,530) | $ (7,385) | $ (7,629) | $ (7,810) | $ (7,202) | $ (6,783) | $ (9,276) | $ (30,925) | $ (31,071) | $ (43,728) |
Weighted average shares outstanding used for basic and diluted net loss per share | 29,235,000 | 24,617,000 | 24,469,000 | ||||||||
Basic and diluted net loss per share | $ (0.24) | $ (0.27) | $ (0.25) | $ (0.31) | $ (0.32) | $ (0.29) | $ (0.28) | $ (0.38) | $ (1.06) | $ (1.26) | $ (1.79) |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 1,825 | $ 1,403 |
Accrued warranty costs | 556 | 754 |
Accrued legal costs | 1,558 | 569 |
Accrued customer incentives | 1,986 | 639 |
Accrued liabilities, other | 2,264 | 2,143 |
Accrued liabilities, total | $ 8,189 | $ 5,508 |
Accrued Liabilities - Schedul54
Accrued Liabilities - Schedule of Changes in Accrued Warranty Costs (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Payables and Accruals [Abstract] | |
Beginning Balance | $ 754 |
Warranties issued (released) during the period | (188) |
Settlements made during the period | (10) |
Ending Balance | $ 556 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Dec. 22, 2017 | Dec. 15, 2017 | Oct. 12, 2017 | Mar. 24, 2017 | Apr. 10, 2013 | Oct. 02, 2012 | Jun. 30, 2014 | Dec. 31, 2017 | Dec. 31, 2016 | Aug. 22, 2017 |
Required deposit balance | $ 1,560,000 | $ 1,560,000 | ||||||||
Restricted cash, current portion | $ 487,000 | 1,444,000 | ||||||||
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 | |||||||||
Invoice purchase fee percentage | 1.00% | |||||||||
Additional monthly funds usage rate | 0.035% | |||||||||
Automatic renewal receivable financing agreement duration | 1 year | |||||||||
Financing-related costs incurred | $ 215,000 | |||||||||
Unamortized debt discount | 108,000 | |||||||||
Accounts receivable | 2,931,000 | |||||||||
Derivative liability | 674,000 | |||||||||
Equipment Financing Agreement [Member] | ||||||||||
Amount borrowed under amended loan agreement | $ 496,000 | |||||||||
Payment principal | ||||||||||
LSQ Funding Group L C [Member] | ||||||||||
Sale of certain accounts receivable to third-party | $ 7,000,000 | |||||||||
Advancement rate of receivables face value | 80.00% | |||||||||
Maximum [Member] | ||||||||||
Aging collection fee percentage | 0.00% | |||||||||
Notice period to cancel receivable financing agreement | 60 days | |||||||||
Minimum [Member] | ||||||||||
Aging collection fee percentage | 0.35% | |||||||||
Notice period to cancel receivable financing agreement | 90 days | |||||||||
Secured Convertible Debt [Member] | Securities Purchase Agreement [Member] | Dwight W. Anderson [Member] | ||||||||||
Conversion price per share | $ 0.50 | |||||||||
Common stock price per share description | Companys common stock at a rate of one share of common stock per $0.50. | |||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | ||||||||||
Debt instrument, interest rate | 14.00% | |||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Loan Agreement [Member] | ||||||||||
Debt instrument borrowing amount | $ 4,950,000 | |||||||||
Issued in partial consideration | 3,700,000 | |||||||||
Partial conversion for the cancellation amount | 1,250,000 | |||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Maximum [Member] | ||||||||||
Debt instrument borrowing amount | $ 12,450,000 | |||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Maximum [Member] | Loan Agreement [Member] | ||||||||||
Debt instrument borrowing amount | $ 5,000,000 | |||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Minimum [Member] | ||||||||||
Debt instrument borrowing amount | 7,500,000 | |||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Secured Debt [Member] | ||||||||||
Debt instrument borrowing amount | $ 7,500,000 | |||||||||
Payment principal | ||||||||||
Secured Promissory Note Interest Rate at Prime Plus 2% Through June 2036 [Member] | Secured Debt [Member] | ||||||||||
Debt instrument borrowing amount | $ 10,000,000 | |||||||||
Prime rate | 6.50% | |||||||||
Debt instrument description | Promissory note (June 2014 Secured Promissory Note) with Five Star Bank (Lender) which bears interest at 6.5% | |||||||||
Debt instrument, prime rate | 2.00% | 2.00% | ||||||||
Debt instrument monthly payment | $ 71,051 | |||||||||
Debt instrument, maturity date | Jun. 30, 2036 | |||||||||
Required deposit balance | $ 1,560,000 | |||||||||
Restricted cash, current portion | 487,000 | |||||||||
Unamortized debt discount | $ 226,000 | $ 247,000 | ||||||||
Senior Secured Promissory Note Interest Rate at 8% [Member] | ||||||||||
Debt instrument, covenant compliance | Effective September 30, 2015, the Companys 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 14, which increased the Companys debt while the Company continued to incur net losses, which decreased stockholders equity. However, the Company received a waiver from Five Star Bank with respect to compliance with the requirements to (i) maintain a current ratio greater than 1.25-to-1.0 (extended to December 31, 2017, and subsequently extended to October 1, 2018) and (ii) maintain a debt-to-worth ratio less than 4.0-to-1.0 (extended to December 31, 2017, and subsequently extended to October 1, 2018). In March 2018, the Company received a waiver from Five Star Bank with respect to compliance with the requirements to (i) maintain a current ratio greater than 1.25-to-1.0 (extended to April 3, 2019) and (ii) maintain a debt-to-worth ratio less than 4.0-to-1.0 (extended to April 3, 2019), as well as a waiver of the material adverse change clause, also through April 3rd, 2019. The Company would otherwise have been in default of both the current ratio and the debt-to-w orth ratio, without the covenant waivers. The receipt of these waiver and the extension to provide financial statements under the October 2012 and April 2013 Secured Promissory Notes cured the Companys otherwise being in breach of the covenants under the loan agreement for the year ended December 31, 2016 and 2017. | |||||||||
Senior Secured Promissory Note Interest Rate at 8% [Member] | Secured Debt [Member] | ||||||||||
Debt instrument, interest rate | 8.00% | 8.00% | ||||||||
Unamortized debt discount | $ 2,178,000 | $ 3,333,000 | ||||||||
LSQ Financing [Member] | ||||||||||
Financing-related costs incurred | 54,000 | |||||||||
Unamortized debt discount | 1,222,000 | |||||||||
Excess funds available on reserve account outstanding | 4,000 | |||||||||
October 2017 Convertible Note [Member] | ||||||||||
Derivative liability | 578,000 | |||||||||
Unamortized financing costs | 367,000 | |||||||||
October 2017 Convertible Note [Member] | Secured Convertible Debt [Member] | Due through December 1, 2017 [Member] | ||||||||||
Debt instrument, interest rate | 1.00% | |||||||||
October 2017 Convertible Note [Member] | Secured Convertible Debt [Member] | beginning January 1, 2018 [Member] | ||||||||||
Debt instrument, interest rate | 10.00% | |||||||||
October 2017 Convertible Note [Member] | Secured Convertible Debt [Member] | Dwight W. Anderson [Member] | ||||||||||
Debt instrument, maturity date | Oct. 23, 2020 | |||||||||
Convertible promissory note | $ 1,000,000 | |||||||||
Conversion price per share | $ 1 | |||||||||
Common stock price per share description | Companys common stock at a rate of one share of common stock per $1.00 | |||||||||
October 2017 Convertible Note [Member] | Secured Convertible Debt [Member] | Maximum [Member] | Dwight W. Anderson [Member] | ||||||||||
Unsecured debt | $ 6,000,000 | |||||||||
Secured December 2017 Convertible Note [Member] | Dwight W. Anderson [Member] | ||||||||||
Debt instrument, maturity date | Oct. 12, 2020 | |||||||||
Unamortized debt discount | 510,000 | |||||||||
Secured debt | 4,000,000 | |||||||||
Secured December 2017 Convertible Note [Member] | Maximum [Member] | Dwight W. Anderson [Member] | ||||||||||
Secured debt | $ 6,000,000 | |||||||||
Unobservable Inputs Level 3 [Member] | ||||||||||
Fair value of debt | $ 21,133,000 | $ 21,611,000 | ||||||||
Unobservable Inputs Level 3 [Member] | Variable Income Interest Rate [Member] | ||||||||||
Current interest rate | 6.50% |
Debt - Schedule of Debt Includi
Debt - Schedule of Debt Including Debt to Related Parties (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Debt, including debt due to related parties | $ 63,753 | $ 58,002 |
Less debt due to related parties | (37,822) | (36,667) |
Less current portion | (1,524) | (252) |
Debt | 24,407 | 21,083 |
Secured Debt [Member] | Secured Promissory Notes Interest Rate at 14.00% Through October 2018 [Member] | ||
Debt, including debt due to related parties | 12,347 | 12,222 |
Secured Debt [Member] | Secured Promissory Note Interest Rate at Prime Plus 2% Through June 2036 [Member] | ||
Debt, including debt due to related parties | 8,872 | 9,113 |
Secured Debt [Member] | Secured Promissory Note Interest Rate at 1% Through October 2020 [Member] | ||
Debt, including debt due to related parties | 3,490 | |
Secured Debt [Member] | Secured Promissory Notes Interest Rate at 14.00% Through October 2018 [Member] | ||
Debt, including debt due to related parties | 1,222 | |
Secured Debt [Member] | Senior Secured Promissory Note Interest Rate at 8% [Member] | ||
Debt, including debt due to related parties | $ 37,822 | 36,667 |
Secured Debt [Member] | Secured Revolving Borrowing Interest Rate at 13.6% Through March 2018 [Member] | ||
Debt, including debt due to related parties |
Debt - Schedule of Debt Inclu57
Debt - Schedule of Debt Including Debt to Related Parties (Details) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Unamortized debt discount | $ 108,000 | |
Secured Debt [Member] | Secured Promissory Notes Interest Rate at 14.00% Through October 2018 [Member] | ||
Debt instrument, interest rate | 14.00% | 14.00% |
Debt instrument, payment terms | Payable monthly through October 2018 | Payable monthly through October 2018 |
Unamortized debt discount | $ 103,000 | $ 228,000 |
Debt instrument, imputed interest rate | 15.50% | 15.50% |
Secured Debt [Member] | October 2012 Secured Promissory Notes [Member] | ||
Debt instrument, interest rate | 14.00% | |
Secured Debt [Member] | April 2013 Secured Promissory Notes [Member] | ||
Debt instrument, interest rate | 14.00% | |
Secured Debt [Member] | Secured Promissory Note Interest Rate at Prime Plus 2% Through June 2036 [Member] | ||
Debt instrument, payment terms | Payable monthly through June 2036 | Payable monthly through June 2036 |
Unamortized debt discount | $ 226,000 | $ 247,000 |
Debt instrument, imputed interest rate | 6.60% | 6.60% |
Debt instrument, prime rate | 2.00% | 2.00% |
Secured Debt [Member] | Secured Promissory Note Interest Rate at 1% Through October 2020 [Member] | ||
Debt instrument, interest rate | 1.00% | 1.00% |
Debt instrument, payment terms | Principal due at maturity (October 2020) | Principal due at maturity (October 2020) |
Unamortized debt discount | $ 510,000 | |
Debt instrument, imputed interest rate | 54.60% | |
Secured Debt [Member] | Secured Promissory Notes Interest Rate at 14.00% Through October 2018 [Member] | ||
Debt instrument, interest rate | 13.60% | |
Unamortized debt discount | $ 54,000 | |
Secured Debt [Member] | Secured Revolving Borrowing Interest Rate at 13.6% Through March 2018 [Member] | ||
Debt instrument, interest rate | 13.60% | |
Debt instrument, payment terms | through March 2018 | |
Unamortized debt discount | $ 0 | |
Secured Debt [Member] | Senior Secured Promissory Note Interest Rate at 8% [Member] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument, payment terms | Payable biannually with principal payments due in increments at three, four and five years from the closing date | Payable biannually with principal payments due in increments at three, four and five years from the closing date |
Unamortized debt discount | $ 2,178,000 | $ 3,333,000 |
Debt instrument, imputed interest rate | 11.00% | 11.00% |
Debt - Schedule of Contractual
Debt - Schedule of Contractual Future Principal Payments (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Debt Disclosure [Abstract] | |
2,018 | $ 23,988 |
2,019 | 10,279 |
2,020 | 24,296 |
2,021 | 318 |
2,022 | 339 |
Thereafter | 7,604 |
Total future principal payments | $ 66,824 |
Debt - Activity Related to Secu
Debt - Activity Related to Secured Promissory Note (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017USD ($) | ||
Debt, beginning balance | $ 58,002 | |
Debt, ending balance | 63,753 | |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | ||
Debt, beginning balance | 12,222 | |
Additions | ||
Amortization of debt discount | 125 | |
Principal payments | ||
Debt, ending balance | 12,347 | |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | Principal [Member] | ||
Debt, beginning balance | 12,450 | |
Additions | ||
Amortization of debt discount | ||
Principal payments | ||
Debt, ending balance | 12,450 | |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | Debt Discount Related to the Issuance of Common Stock Warrants [Member] | ||
Debt, beginning balance | (203) | [1] |
Additions | [1] | |
Amortization of debt discount | 111 | [1] |
Principal payments | [1] | |
Debt, ending balance | (92) | [1] |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | Discount Related to Notes [Member] | ||
Debt, beginning balance | (25) | [1] |
Additions | [1] | |
Amortization of debt discount | 14 | [1] |
Principal payments | [1] | |
Debt, ending balance | $ (11) | [1] |
[1] | The amortization of this account is included in interest expense in the consolidated statements of operations and as non-cash interest expense in the consolidated statements of cash flows. |
Debt - Activity Related to Se60
Debt - Activity Related to Secured Promissory Note (Details) (Parenthetical) $ in Thousands | Dec. 31, 2017USD ($) |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | |
Promissory notes issued | $ 3,750 |
Warrants - Summary of Informati
Warrants - Summary of Information about Common Stock Warrants Outstanding (Details) | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Number of shares subject to warrant issued | 4,232,000 |
June Two Thousand Thirteen Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Issue date | 2013-06 |
Expiration date | 2023-06 |
Number of shares subject to warrant issued | 27,000 |
Exercise price | $ / shares | $ 8.40 |
August Two Thousand Fifteen Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Issue date | 2015-08 |
Expiration date | 2023-08 |
Number of shares subject to warrant issued | 4,000,000 |
Exercise price | $ / shares | $ 1.91 |
November Two Thousand Sixteen Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Issue date | 2016-11 |
Expiration date | 2026-11 |
Number of shares subject to warrant issued | 125,000 |
Exercise price | $ / shares | $ 2.38 |
June Two Thousand Seventeen Warrant [Member] | |
Class of Warrant or Right [Line Items] | |
Issue date | 2017-06 |
Expiration date | 2027-06 |
Number of shares subject to warrant issued | 80,000 |
Exercise price | $ / shares | $ 1.10 |
Warrants - Summary of Informa62
Warrants - Summary of Information about Common Stock Warrants Outstanding (Details) (Parenthetical) | 12 Months Ended |
Dec. 31, 2017 | |
Warrants and Rights Note Disclosure [Abstract] | |
Voting power percentage | 50.00% |
Common Stock (Details Narrative
Common Stock (Details Narrative) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Equity [Abstract] | ||
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, par value | $ 0.00001 | $ 0.00001 |
Common Stock - Reserved Shares
Common Stock - Reserved Shares of Common Stock for Future Issuances (Details) | Dec. 31, 2017shares |
Class of Stock [Line Items] | |
Reserved shares of common stock for future issuances | 14,520,000 |
Convertible Notes Payable [Member] | |
Class of Stock [Line Items] | |
Reserved shares of common stock for future issuances | 4,005,000 |
Shares Available for Future Grant Under Stock Incentive Plans [Member] | |
Class of Stock [Line Items] | |
Reserved shares of common stock for future issuances | 2,340,000 |
Stock Options Outstanding [Member] | |
Class of Stock [Line Items] | |
Reserved shares of common stock for future issuances | 3,121,000 |
Warrants To Purchase Common Stock [Member] | |
Class of Stock [Line Items] | |
Reserved shares of common stock for future issuances | 4,232,000 |
Restricted Stock Units [Member] | |
Class of Stock [Line Items] | |
Reserved shares of common stock for future issuances | 822,000 |
Stock Option Plans (Details Nar
Stock Option Plans (Details Narrative) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||
Aug. 31, 2013shares | Dec. 31, 2017USD ($)Number$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Dec. 31, 2015USD ($)$ / shares | Jul. 31, 2011shares | Jul. 31, 2006shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options outstanding | 3,121,000 | 3,397,000 | ||||
Number of options weighted-average exercise price | $ / shares | $ 5.45 | $ 5.62 | ||||
Number of options exercised | 14,000 | |||||
Number of options canceled | 386,000 | |||||
Number of options granted | 124,000 | 1,261,000 | ||||
Total intrinsic value of options exercised | $ | $ 12 | $ 20 | $ 35 | |||
Estimated fair value of options vested | $ | $ 2,066 | $ 2,466 | $ 4,950 | |||
Weighted-average estimated fair value of options granted | $ / shares | $ 0.63 | $ 0.61 | $ 0.75 | |||
Share based compensation expense recognized | $ | $ 2,114 | $ 2,669 | $ 3,811 | |||
Unvested options granted to employees stock option plans | $ | $ 521 | |||||
Equity Incentive Plan Two Thousand Six [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares authorized | 1,434,000 | |||||
Number of stock options exercised, subject to repurchase | 0 | 0 | ||||
Number of options outstanding | 215,000 | |||||
Number of options weighted-average exercise price | $ / shares | $ 1.13 | |||||
Number of options vested | 215,000 | |||||
Number of options exercised | 13,000 | |||||
Number of options canceled | 0 | |||||
Equity Incentive Plan Two Thousand Eleven [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares authorized | 1,167,000 | |||||
Number of options outstanding | 305,000 | |||||
Number of options weighted-average exercise price | $ / shares | $ 7.41 | |||||
Number of options vested | 305,000 | |||||
Number of options exercised | 1,000 | |||||
Number of options canceled | 17,000 | |||||
Exercise of incentive stock options | 2,446,000 | |||||
Equity Incentive Plan Two Thousand Thirteen [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Common stock shares authorized | 1,600,000 | |||||
Number of options outstanding | 2,601,000 | |||||
Number of options weighted-average exercise price | $ / shares | $ 5.58 | |||||
Number of options vested | 1,604,000 | |||||
Number of options exercised | 0 | |||||
Number of options canceled | 361,000 | |||||
Percentage increase by number of shares of common stock outstanding | 3.50% | |||||
Number of options granted | 124,000 | |||||
Number of equal annual installments in which restricted stock units vest | Number | 5 | |||||
Equity Incentive Plan Two Thousand Thirteen [Member] | Share Based Compensation Award General Tranche [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted vesting period description | Generally, options vest 25% on the first anniversary from the date of grant and 1/48 per month thereafter (Standard Vesting Terms) | |||||
Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense recognized | $ | $ 123 | $ 198 | 96 | |||
Weighted average period of share based compensation expense recognized | 1 year 3 months 19 days | |||||
Unrecognized share-based payment expense related to nonvested stock options | $ | $ 314 | |||||
Restricted Stock Units [Member] | Equity Incentive Plan Two Thousand Thirteen [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Restricted stock units granted vesting period description | On the date of grant, 7/12 of the restricted stock units vested immediately with 5/12 vesting equally over the five monthly anniversaries following the date of issuance of the award. | |||||
Restricted stock units granted in current period, vesting periods description | The vesting periods for the restricted stock are subject to board approval and during the year ended December 31, 2017 varied from immediate to 36 months. | |||||
Number of restricted stock units outstanding | 822,000 | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share based compensation expense recognized | $ | $ 1,937 | 2,471 | 3,715 | |||
Tax benefit not realized | $ | $ 0 | $ 0 | $ 0 | |||
Weighted average period of share based compensation expense recognized | 2 years |
Stock Option Plans - Summary of
Stock Option Plans - Summary of Activity under Company's Stock Option Plans and Shares Available for Grant under Company's Stock Incentive Plans (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Outstanding, Beginning balance | 3,397,000 | |
Shares Outstanding, Options granted | 124,000 | 1,261,000 |
Shares Outstanding, Options exercised | (14,000) | |
Shares Outstanding, Options cancelled | (386,000) | |
Shares Outstanding, Ending balance | 3,121,000 | 3,397,000 |
Shares Outstanding, Vested and expected to vest | 2,847,000 | |
Shares Outstanding, Exercisable | 2,124,000 | |
Weighted Average Exercise Price, Beginning balance | $ 5.62 | |
Weighted Average Exercise Price, Options granted | 1.40 | $ 1.12 |
Weighted Average Exercise Price, Options exercised | 1.21 | 0.56 |
Weighted Average Exercise Price, Options cancelled | 5.77 | |
Weighted Average Exercise Price, Ending balance | 5.45 | $ 5.62 |
Weighted Average Exercise Price, Vested and expected to vest | 5.81 | |
Weighted Average Exercise Price, Exercisable | $ 7.19 | |
Weighted-Average Remaining Contractual Life | 6 years 10 months 25 days | 7 years 10 months 25 days |
Weighted-Average Remaining Contractual Life, Vested and expected to vest | 6 years 9 months 18 days | |
Weighted-Average Remaining Contractual Life, Exercisable | 6 years 2 months 12 days | |
Aggregate Intrinsic Value | $ 114 | $ 1,599 |
Aggregate Intrinsic Value, Vested and expected to vest | 95 | |
Aggregate Intrinsic Value, Exercisable | $ 47 | |
Shares Available for Grant, Ending balance | 2,416,000 | |
Stock Incentive Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares Available for Grant, Beginning balance | 1,622,000 | |
Shares Available for Grant ,Shares authorized | 863,000 | |
Shares Available for Grant, Options granted | (124,000) | |
Shares Available for Grant, Options cancelled | 386,000 | |
Shares Available for Grant, Restricted stock units granted | (407,000) | |
Shares Available for Grant, Ending balance | 2,340,000 | 1,622,000 |
Stock Option Plans - Summary 67
Stock Option Plans - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] | 12 Months Ended |
Dec. 31, 2017$ / sharesshares | |
Shares outstanding, Beginning balance | shares | 350,000 |
Shares outstanding, Granted | shares | 407,000 |
Shares outstanding, Vested | shares | (422,000) |
Shares outstanding, Ending balance | shares | 335,000 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 0.75 |
Weighted average grant date fair value, Granted | $ / shares | 1.07 |
Weighted average grant date fair value, Vested | $ / shares | 0.89 |
Weighted average grant date fair value, Ending balance | $ / shares | $ 0.94 |
Capital Leases (Details Narrati
Capital Leases (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Capital Leased Assets [Line Items] | |||
Amortization of capital leases | $ 194,000 | $ 265,000 | $ 1,567,000 |
Equipment [Member] | |||
Capital Leased Assets [Line Items] | |||
Property plant and equipment under capital leases | 1,904,000 | ||
Property plant and equipment, accumulated amortization under capital leases | $ 473,000 |
Commitments and Contingencies69
Commitments and Contingencies (Details Narrative) | May 25, 2016USD ($) | Jan. 19, 2016USD ($)ft² | Apr. 30, 2014USD ($)ft² | Sep. 30, 2013USD ($)ft² | Dec. 31, 2017USD ($)ft² | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Mar. 31, 2016USD ($) |
Commitments And Contingencies [Line Items] | |||||||||
Rental expense | $ 625,000 | $ 959,000 | $ 1,102,000 | ||||||
Litigation settlement | $ 12,000,000 | ||||||||
Commitment and contingencies civil penalty amount | $ 1,750,000 | ||||||||
Expense for penalties arising from enforcement action | $ 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 | ||||||||
Sub lease commenced date | Feb. 1, 2016 | ||||||||
Sublease agreement, monthly base rent | $ 5,000 | ||||||||
Operating leases rent expense sublease rentals | $ 60,000 | $ 60,000 | |||||||
Noncontiguous Office Space [Member] | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Office facility lease agreement | ft² | 24,500 | ||||||||
Operating leases termination description | California under which a portion of the covered space terminated beginning in February 2014. The remaining portion of the space terminated in October 2016. The lease includes negotiated annual increases in the monthly rental payments. | ||||||||
Office And Laboratory Space One [Member] | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Office facility lease agreement | ft² | 27,300 | ||||||||
Lease start date | Sep. 30, 2013 | ||||||||
Lease agreement period | 60 months | ||||||||
Lease commenced date | Aug. 31, 2014 | ||||||||
Monthly base rent | $ 44,000 | ||||||||
Initial base rent term | 12 months | ||||||||
Percentage of annual increase in base rent | 3.00% | ||||||||
Office And Laboratory Space Two [Member] | |||||||||
Commitments And Contingencies [Line Items] | |||||||||
Office facility lease agreement | ft² | 17,400 | ||||||||
Lease agreement period | 60 months | ||||||||
Lease commenced date | Aug. 31, 2014 | ||||||||
Monthly base rent | $ 28,000 | ||||||||
Percentage of annual increase in base rent | 3.00% |
Commitments and Contingencies -
Commitments and Contingencies - Schedule of Non-Cancelable Lease Agreements (Details) $ in Thousands | Dec. 31, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 949 |
2,019 | 615 |
Total minimum payments required | $ 1,564 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | ||||
Net deferred tax assets | $ 64,531,000 | $ 80,004,000 | ||
Change in valuation allowance | 15,473,000 | 11,035,000 | $ 15,241,000 | |
Deferred tax liability | ||||
Income taxes | ||||
Unrecognized tax benefits | $ 1,201,000 | $ 1,083,000 | $ 982,000 | $ 853,000 |
Income tax examination year | The Company is subject to U.S. federal and state income tax examination for 2007 through 2016 due to unutilized net operating loss carryforwards and research and development tax credit carryforwards. | |||
Income tax rate | 0.00% | 0.00% | 0.00% | |
Domestic Country [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | $ 215,973,000 | |||
Research and development tax credit carryforwards | $ 2,316,000 | |||
Tax credit carryforwards, expiry period | 2,026 | |||
State and Local Jurisdiction [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Research and development tax credit carryforwards | $ 2,476,000 | |||
State and Local Jurisdiction [Member] | California [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | $ 134,256,000 | |||
State and Local Jurisdiction [Member] | Maximum [Member] | California [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards, expiry period | 2,026 | |||
Other States Tax Jurisdiction [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards | $ 44,904,000 | |||
Other States Tax Jurisdiction [Member] | Maximum [Member] | Loss Carryforwards Expiring in Two Thousand Twenty Eight Through Two Thousand Thirty Seven [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards, expiry period | 2,037 | |||
Other States Tax Jurisdiction [Member] | Minimum [Member] | Loss Carryforwards Expiring in Two Thousand Twenty Eight Through Two Thousand Thirty Seven [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Net operating loss carryforwards, expiry period | 2,028 | |||
Tax Cuts and Jobs Act | ||||
Income Tax Contingency [Line Items] | ||||
Income tax rate | 35.00% | |||
Reduce from income tax rate | 21.00% | |||
Decrease of deferred tax assets | $ 27,971,000 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Dec. 31, 2017 | Dec. 31, 2016 |
Income Tax Disclosure [Abstract] | ||
Net operating loss carryforwards | $ 56,945,000 | $ 71,329,000 |
Research and development tax credits | 3,202,000 | 2,670,000 |
Other, net | 4,384,000 | 6,005,000 |
Net deferred tax assets | 64,531,000 | 80,004,000 |
Less valuation allowance | (64,531,000) | (80,004,000) |
Net deferred tax assets |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Effective Income Tax Rate to US Federal Income Tax Statutory Rate (Details) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Federal tax benefit at statutory rate | 34.00% | 34.00% | 34.00% |
State tax benefit, net of federal benefit | 3.00% | 4.00% | 5.00% |
Interest expense | (2.00%) | (1.00%) | (1.00%) |
Share-based compensation expense | (1.00%) | (1.00%) | (2.00%) |
Other | (1.00%) | (1.00%) | 0.00% |
Change in federal deferred tax rate | (98.00%) | ||
Adjustment due to change in valuation allowance | (64.00%) | (35.00%) | (36.00%) |
Provision for income taxes | 0.00% | 0.00% | 0.00% |
Income Taxes - Reconciliation74
Income Taxes - Reconciliation of Beginning and Ending Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |||
Beginning balance | $ 1,083,000 | $ 982,000 | $ 853,000 |
Increase related to prior year tax positions | |||
Increase related to current year tax positions | 118,000 | 101,000 | 129,000 |
Ending balance | $ 1,201,000 | $ 1,083,000 | $ 982,000 |
Employee Benefit Plan (Details
Employee Benefit Plan (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Employee contribution, maximum percentage | 3.00% |
Employee contribution , additional matching contribution percentage | 50.00% |
Employee contribution, vesting percentage | 100.00% |
Employee contribution, matching contribution amount | $ 317 |
Minimum [Member] | |
Employee contribution , additional matching contribution percentage | 3.00% |
Employee contribution, matching contribution amount | $ 282 |
Maximum [Member] | |
Employee contribution , additional matching contribution percentage | 5.00% |
Employee contribution, matching contribution amount | $ 330 |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2017 | Dec. 31, 2015 | Dec. 31, 2016 | May 31, 2016 | Aug. 20, 2015 | |
Debt instrument principal amount, payable two years | $ 10,279,000 | ||||
Debt instrument principal amount, payable three years | 24,296,000 | ||||
Debt instrument principal amount, payable four years | 318,000 | ||||
Debt due to related parties | 37,822,000 | $ 36,667,000 | |||
Unamortized debt discount | $ 108,000 | ||||
Purchase of warrant shares | 4,232,000 | ||||
Tremont Group, Inc [Member] | |||||
Recognized purchase of resold | $ 492,000 | ||||
Senior Secured Promissory Note Interest Rate at 8% [Member] | August 2015 [Member] | |||||
Affiliate revenues percent | 40.00% | ||||
Purchase of warrant shares | 4,000,000 | ||||
Warrant exercise price per share | $ 1.91 | ||||
Fair value of warrant | $ 4,610,000 | ||||
Beneficial Owner [Member] | |||||
Affiliate revenues percent | 5.00% | ||||
legal fees | $ 302,000 | ||||
Beneficial Owner [Member] | Senior Secured Promissory [Member] | |||||
Debt instrument to be issued, principal amount | $ 40,000,000 | ||||
Debt instrument, interest rate | 8.00% | ||||
Debt instrument principal amount, payable two years | $ 10,000,000 | ||||
Debt instrument principal amount, payable three years | 10,000,000 | ||||
Debt instrument principal amount, payable four years | $ 20,000,000 | ||||
Beneficial Owner [Member] | Senior Secured Promissory Note Interest Rate at 8% [Member] | |||||
Debt instrument, frequency of periodic payment of interest | semi-annually | ||||
Debt due to related parties | $ 37,822,000 | ||||
Unamortized debt discount | 2,178,000 | ||||
Debt due to related parties, fair value | $ 21,714,000 | ||||
Minimum cash balance not required to maintain | $ 15,000,000 |
Public offerings (Details Narra
Public offerings (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Apr. 30, 2017 | Dec. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Sales of stock value | $ 50,000 | $ 8,188 | |||
Sales of stock share | 104,000 | ||||
Weighted average exercise price per share | $ 2.22 | ||||
Proceeds from sale of stock net of commission | $ 200 | ||||
Public offering price per share | $ 1.40 | ||||
Proceeds from sale of available-for-sale securities | $ 41,600 | ||||
Proceeds from common stock sold | 50,000 | 8,188 | |||
Available-for-sale [Member] | |||||
Proceeds from sale of available-for-sale securities | 25,800 | ||||
IPO [Member] | |||||
Sales of stock share | 6,571,000 | ||||
Weighted average exercise price per share | $ 1.40 | ||||
Total gross proceeds | $ 9,200 | ||||
Over-Allotments [Member] | |||||
Sales of stock share | 857,000 | ||||
Offering Agreement [Member] | H.C. Wainwright [Member] | |||||
Sales of stock value | 15,000 | ||||
Proceeds from sale of stock net of commission | $ 14,800 | ||||
Proceeds from common stock sold | $ 15,000 |
Quarterly Financial Informati78
Quarterly Financial Information - Summary of Quarterly Financial Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Total revenues | $ 3,318 | $ 4,219 | $ 6,476 | $ 4,154 | $ 2,690 | $ 3,634 | $ 5,049 | $ 2,669 | $ 18,167 | $ 14,042 | $ 9,801 |
Gross profit (loss) | 1,527 | 1,727 | 2,510 | 1,875 | 1,048 | 1,141 | 1,931 | 400 | 7,639 | 4,520 | 545 |
Net loss | $ (7,381) | $ (8,530) | $ (7,385) | $ (7,629) | $ (7,810) | $ (7,202) | $ (6,783) | $ (9,276) | $ (30,925) | $ (31,071) | $ (43,728) |
Basic and diluted net loss per common share | $ (0.24) | $ (0.27) | $ (0.25) | $ (0.31) | $ (0.32) | $ (0.29) | $ (0.28) | $ (0.38) | $ (1.06) | $ (1.26) | $ (1.79) |
Subsequent Event (Details Narra
Subsequent Event (Details Narrative) - Subsequent Event [Member] $ / shares in Units, $ in Thousands | Feb. 05, 2018USD ($)$ / sharesshares |
August 2015 Senior Secured Promissory Notes [Member] | Waddell [Member] | |
Debt instrument, maturity date | Dec. 31, 2022 |
August 2015 Senior Secured Promissory Notes [Member] | Ospraie [Member] | |
Debt instrument, maturity date | Dec. 31, 2022 |
October 2012 Secured Promissory Notes [Member] | |
Common stock, issued shares | 5,714,285 |
Aggregate principal conversion amount | $ | $ 2,450 |
Aggregate principal amount | $ | $ 10,000 |
Debt instrument, maturity date | Dec. 31, 2022 |
Warrant to purchases common stock shares | 1,142,856 |
Debt instrument, interest rate | 14.00% |
Debt instrument, reduced interest rate | 8.00% |
October 2012 Secured Promissory Notes [Member] | Snyder [Member] | |
Debt instrument, maturity date | Dec. 31, 2022 |
April 2013 Secured Promissory Notes [Member] | |
Common stock, issued shares | 5,714,285 |
Aggregate principal conversion amount | $ | $ 2,450 |
Aggregate principal amount | $ | $ 10,000 |
Debt instrument, maturity date | Dec. 31, 2022 |
Warrant to purchases common stock shares | 1,142,856 |
Debt instrument, interest rate | 14.00% |
Debt instrument, reduced interest rate | 8.00% |
Purchase Agreement [Member] | |
Common stock, issued shares | 40,000,001 |
Warrant exercise price per share | $ / shares | $ 0.8 |
Aggregate principal conversion amount | $ | $ 30,000 |
Purchase Agreement [Member] | National Securities Corporation [Member] | |
Common stock, issued shares | 800,000 |
Warrant to purchases common stock shares | 2,017,143 |
Purchase Agreement [Member] | August 2015 Senior Secured Promissory Notes [Member] | |
Common stock, issued shares | 20,000 |
Aggregate principal conversion amount | $ | $ 5,000 |
Aggregate principal amount | $ | $ 35,000 |
Warrant to purchases common stock shares | 4,000,000 |