Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 09, 2018 | |
Document And Entity Information | ||
Entity Registrant Name | MARRONE BIO INNOVATIONS INC | |
Entity Central Index Key | 1,441,693 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Entity Common Stock, Shares Outstanding | 110,690,532 | |
Trading Symbol | MBII | |
Document Fiscal Period Focus | Q3 | |
Document Fiscal Year Focus | 2,018 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 20,524 | $ 786 |
Restricted cash, current portion | 46 | 487 |
Accounts receivable | 3,072 | 3,785 |
Inventories, net | 8,843 | 9,827 |
Deferred cost of product revenues | 1 | 3,063 |
Prepaid expenses and other current assets | 1,292 | 1,170 |
Total current assets | 33,778 | 19,118 |
Property, plant and equipment, net | 14,870 | 16,016 |
Restricted cash, less current portion | 1,560 | 1,560 |
Other assets | 333 | 219 |
Total assets | 50,541 | 36,913 |
Current liabilities: | ||
Accounts payable | 1,862 | 3,800 |
Accrued liabilities | 5,933 | 8,189 |
Accrued interest due to related parties | 1,622 | |
Deferred revenue, current portion | 356 | 6,193 |
Derivative liability | 674 | |
Debt, current portion | 1,737 | 1,524 |
Total current liabilities | 9,888 | 22,002 |
Deferred revenue, less current portion | 2,632 | 2,046 |
Debt, less current portion | 11,882 | 24,407 |
Debt due to related parties | 7,300 | 37,822 |
Other liabilities | 794 | 1,287 |
Total liabilities | 32,496 | 87,564 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity (deficit): | ||
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at September 30, 2018 and December 31, 2017 | ||
Common stock: $0.00001 par value; 250,000 shares authorized, 110,668 and 31,351 shares issued and outstanding as of September 30, 2018 and December 31, 2017, respectively | 1 | |
Additional paid in capital | 293,506 | 214,921 |
Accumulated deficit | (275,462) | (265,572) |
Total stockholders' equity (deficit) | 18,045 | (50,651) |
Total liabilities and stockholders' equity (deficit) | $ 50,541 | $ 36,913 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
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 | 110,668,000 | 31,351,000 |
Common stock, shares outstanding | 110,668,000 | 31,351,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |||
Revenues: | ||||||
Total revenues | $ 5,425 | $ 4,219 | $ 15,501 | $ 14,849 | ||
Cost of product revenues | 2,803 | 2,492 | 8,075 | 8,737 | ||
Gross profit | 2,622 | 1,727 | 7,426 | 6,112 | ||
Operating Expenses: | ||||||
Research, development and patent | 2,658 | 3,152 | 7,685 | 8,449 | ||
Selling, general and administrative | 4,117 | 5,174 | 13,861 | 15,590 | ||
Total operating expenses | 6,775 | 8,326 | 21,546 | 24,039 | ||
Loss from operations | (4,153) | (6,599) | (14,120) | (17,927) | ||
Other income (expense): | ||||||
Interest expense | (300) | (804) | (1,759) | (2,308) | ||
Interest expense, related parties | (1,098) | (451) | (3,257) | |||
Change in fair value of financial instruments | (5,177) | |||||
Loss on extinguishment of debt, net | (303) | |||||
Gain on extinguishment of debt, related party | 9,622 | |||||
Other income (expense), net | 14 | (29) | (13) | (52) | ||
Total other income (expense), net | (286) | (1,931) | 1,919 | (5,617) | ||
Net loss | $ (4,439) | [1] | $ (8,530) | $ (12,201) | [1] | $ (23,544) |
Basic and diluted net loss per common share: | $ (0.04) | $ (0.27) | $ (0.12) | $ (0.83) | ||
Weighted-average shares outstanding used in computing basic and diluted net loss per common share: | 110,568,000 | 31,351,000 | 98,067,000 | 28,507,000 | ||
Product [Member] | ||||||
Revenues: | ||||||
Total revenues | $ 5,310 | $ 4,161 | $ 15,171 | $ 14,675 | ||
License [Member] | ||||||
Revenues: | ||||||
Total revenues | $ 115 | $ 58 | $ 330 | $ 174 | ||
[1] | The impact in conjunction with the adoption of ASC 606 did not change the basic and diluted net loss per common share as reported. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities | |||
Net loss | $ (12,201) | [1] | $ (23,544) |
Adjustments to reconcile net loss to net cash (used in) operating activities: | |||
Depreciation and amortization | 1,427 | 1,540 | |
Loss on disposal of equipment | 365 | ||
Share-based compensation | 1,310 | 1,724 | |
Non-cash interest expense | 807 | 1,130 | |
Change in fair value of financial instruments | 5,177 | ||
Loss on extinguishment of debt, net | 303 | ||
Gain on extinguishment of debt, related party, net | (9,622) | ||
Net changes in operating assets and liabilities: | |||
Accounts receivable | 713 | 1,723 | |
Inventories | 984 | (851) | |
Prepaid expenses and other assets | (359) | 420 | |
Deferred cost of product revenues | 4 | (255) | |
Accounts payable | (1,835) | 1,282 | |
Accrued and other liabilities | (1,794) | 2,491 | |
Accrued interest due to related parties | (1,614) | (803) | |
Deferred revenue | (114) | 341 | |
Net cash used in operating activities | (16,814) | (14,437) | |
Cash flows from investing activities | |||
Purchases of property, plant and equipment | (496) | (391) | |
Sale of property, plant and equipment | 15 | ||
Net cash used in investing activities | (496) | (376) | |
Cash flows from financing activities | |||
Proceeds from issuance of common stock, net of offering costs | 34,485 | 8,188 | |
Proceeds from issuance of debt | 2,000 | ||
Proceeds from secured borrowings | 15,402 | 7,831 | |
Reductions in secured borrowings | (15,181) | (6,631) | |
Repayment of debt | (190) | (340) | |
Repayment of capital leases | (420) | ||
Financing costs | (215) | ||
Net settlement of stock options | (14) | ||
Exercise of stock options | 7 | 17 | |
Exercise of warrants | 98 | ||
Net cash provided by financing activities | 36,607 | 8,430 | |
Net increase (decrease) in cash and cash equivalents and restricted cash | 19,297 | (6,383) | |
Cash and cash equivalents and restricted cash, beginning of period | 2,833 | 12,613 | |
Cash and cash equivalents and restricted cash, end of period | 22,130 | 6,230 | |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 2,698 | 5,231 | |
Supplemental disclosure of non-cash investing and financing activities | |||
Property, plant and equipment included in accounts payable and accrued liabilities | 30 | 331 | |
Equipment acquired with debt | 495 | ||
Embedded derivative liability associated with bridge loan | 573 | ||
Conversion of debt to equity | 10,000 | ||
Conversion of bridge loan (convertible note) to equity | 6,000 | ||
Conversion of debt, related party to equity | 35,000 | ||
Conversion of accrued liabilities into equity associated with the granting of restricted stock units | $ 205 | ||
[1] | The impact in conjunction with the adoption of ASC 606 did not change the basic and diluted net loss per common share as reported. |
Summary of Business, Basis of P
Summary of Business, Basis of Presentation and Liquidity | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Business, Basis of Presentation and Liquidity | 1. Summary of Business, Basis of Presentation and Liquidity Marrone Bio Innovations, Inc. (the “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 condensed 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. From October 2017 through January 2018, the Company borrowed, pursuant to a convertible promissory note (the “Secured December 2017 Convertible Note”) as amended and restated on December 22, 2017, $6,000,000, including $4,000,000 borrowed in 2017 and $2,000,000 borrowed in January 2018 Pursuant to a securities purchase agreement (the “Securities Purchase Agreement”) entered into on December 15, 2017, in February 2018, the Company issued, 70,514,000 unregistered shares of its common stock and converted $51,000,000 in outstanding debt principal of which $6,000,000 was outstanding under the Secured December 2017 Convertible Note and $45,000,000 was outstanding under long-term senior secured debt instruments (the “February Stock and Debt Conversion Transaction”). The gross proceeds to the Company from the offering were approximately $24,000,000, which excludes the $6,000,000 in debt converted under the Secured December 2017 Convertible Note. After deducting underwriting discounts and commissions and estimated offering expenses payable by the Company, the aggregate net proceeds to the Company totaled $21,819,000. See Notes 6, 11 and 12 for further discussion of the February Stock and Debt Conversion Transaction. In April 2018, the Company completed a public offering of 8,366,250 registered shares of its common stock The Company is an early stage company with a limited operating history and has a limited number of commercialized products. As of September 30, 2018, the Company had an accumulated deficit of $275,462,000, has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future. The Company had funded operations primarily with net proceeds from public sales and private placements of equity and debt securities and from 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 September 30, 2018, the Company had working capital of $23,890,000, including cash and cash equivalents of $20,524,000. In addition, as of September 30, 2018, the Company had debt and debt due to related parties of $13,619,000 and $7,300,000, 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 September 30, 2018, the Company had a total of $1,606,000 of restricted cash relating to these debt agreements (see Note 6). The June 2014 Secured Promissory Note (as defined in Note 6) 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 November 15, 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 September 30, 2018. If the Company breaches any of the covenants contained within the debt agreements or if the material adverse change clauses are triggered, the entire unpaid principal and interest balances would be due and payable upon demand. Without entering into a continuation of its current waiver, which expires November 15, 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 could exceed its maximum debt-to-worth requirement under a promissory note with Five Star Bank. A violation of a covenant in one debt agreement will cause the Company to be in violation of certain covenants under each of its other debt agreements. Breach of covenants included in the Company’s debt agreements, which could result in the lenders demanding payment of the unpaid principal and interest balances, would 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. It is possible the Company may need to raise additional funds in the future. If so, 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 be favorable. 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 or margin improvements necessary to fund the Company with cash flows from operations will have a material adverse effect upon the Company and may 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 condensed 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 any inability of the Company to continue as a going concern. The Company believes that its existing cash and cash equivalents of $20,524,000 at September 30, 2018 and, expected revenues are sufficient to fund operations as currently planned through at least one year from the date of the issuance of these financial statements. However, the Company cannot predict, with certainty, the outcome of its actions to grow revenues. The Company has based this belief 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 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. Management may seek additional capital through debt financings, collaborative or other funding arrangements with partners, or through other sources of financing. Should the Company seek additional financing from outside sources, the Company may not be able to raise such financing on terms acceptable to the Company or at all. If the Company is unable to raise additional capital when required or on acceptable terms, the Company may be required to scale back or to discontinue the promotion of currently available products, scale back or discontinue the advancement of product candidates, reduce headcount, file for bankruptcy, reorganize, merge with another entity, or cease operations. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying financial information as of September 30, 2018, and for the three and nine months ended September 30, 2018 and 2017, has been prepared by the Company, without audit, in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The information included in this Quarterly Report on Form 10-Q should be read in connection with the consolidated financial statements and accompanying notes included in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2017. In the opinion of management, the condensed consolidated financial statements as of September 30, 2018, and for the three and nine months ended September 30, 2018 and 2017, reflect all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results for the full fiscal year or any future periods. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company used significant estimates in accounting for the useful lives of property, plant and equipment, reserves for inventory obsolescence, fair value estimates and in its going concern analysis. Cash and Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows in thousands: SEPTEMBER 30, 2018 2017 Cash and cash equivalents $ 20,524 $ 3,737 Restricted cash, current portion 46 933 Restricted cash, less current portion 1,560 1,560 Total cash, cash equivalents and restricted cash $ 22,130 $ 6,230 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. 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. The Company’s principal sources of revenues are its Regalia, Grandevo and Venerate product lines. These three product lines accounted for 95% and 87% of the Company’s total revenues for the three months ended September 30, 2018 and 2017, respectively. These three product lines accounted for 93% and 87% of the Company’s total revenues for the nine months ended September 30, 2018 and 2017, respectively. Revenues generated from international customers were 11% and 4% for the three months ended September 30, 2018 and 2017, respectively, and 11% and 9% for each of the nine months ended September 30, 2018 and 2017, respectively. Customers to which 10% or more of the Company’s total revenues are attributable for any one of the periods presented consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C CUSTOMER D Three months ended September 30, 2018 31 % 19 % 13 % 6 % 2017 16 % 20 % 7 % 10 % CUSTOMER A CUSTOMER B CUSTOMER C Nine months ended September 30, 2018 22 % 20 % 12 % 2017 4 % 25 % 9 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either September 30, 2018 or December 31, 2017 consist of the following: CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER A B C D E F September 30, 2018 31 % 20 % 13 % 0 % 2 % 0 % December 31, 2017 9 % 22 % 2 % 16 % 11 % 11 % 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 has one supplier of 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 maintains 6-12 months of knotweed extract 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. Additionally, tariffs placed on Chinese goods exported to the United States may impact the cost of this active ingredient. 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 September 30, 2018 and December 31, 2017, the Company recorded deferred cost of product revenues of $1,000 and $3,063,000 respectively. Deferred Revenue When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring control of goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales after the Company has transferred control of the goods or services to the customer and all revenue recognition criteria are met. The Company’s deferred revenue is broken out as follows (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Product revenues $ 532 $ 6,449 Financing costs (1) 611 - License revenues 1,845 1,790 2,988 8,239 Less current portion (356 ) (6,193 ) $ 2,632 $ 2,046 (1) Revenue Recognition On January 1, 2018, the Company adopted the Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers The cumulative effect of the changes made to the Company’s condensed consolidated balance sheet on January 1, 2018 for the adoption of the new revenue standard was as follows (in thousands): BALANCE SHEET As Reported December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 ASSETS Deferred cost of product revenues $ 3,063 $ (3,058 ) $ 5 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue, current portion 6,193 (5,893 ) 300 Deferred revenue, less current portion 2,046 524 2,570 Accumulated deficit $ (265,572 ) $ 2,311 $ (263,261 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations was as follows (in thousands): SEPTEMBER 30, 2018 BALANCE SHEET As Reported Impacts Due to ASC 606 As Reported without Impacts of ASC 606 ASSETS Deferred cost of product revenues $ 1 $ 2,377 $ 2,378 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue, current portion 356 4,822 5,178 Deferred revenue, less current portion 2,632 (611 ) 2,021 Accrued liabilities 5,933 - 5,933 Accumulated deficit (275,462 ) $ (1,834 ) $ (277,296 ) For the Three Months Ended SEPTEMBER 30, 2018 As Reported Impacts Due to ASC 606 Results without Impacts of ASC 606 STATEMENT OF OPERATIONS Revenues Product $ 5,310 $ 972 $ 6,282 License 115 (41 ) 74 Cost of product revenues 2,803 455 3,258 Interest expense (300 ) 72 (228 ) Net loss (1) $ (4,439 ) $ 548 $ (3,891 ) For the Nine Months Ended SEPTEMBER 30, 2018 As Reported Impacts Due to ASC 606 Results without Impacts of ASC 606 STATEMENT OF OPERATIONS Revenues Product $ 15,171 $ 1,062 $ 16,233 License 330 (135 ) 195 Cost of product revenues 8,075 681 8,756 Interest expense (1,759 ) 231 (1,528 ) Net loss (1) $ (12,201 ) $ 477 $ (11,724 ) (1) Product Sales. Licenses Revenues. Financing Component Revenues. Revenue recognition requires the Company to make a number of estimates that include variable consideration. For example, customers may receive sales or volume-based pricing incentives or receive incentives for providing the Company with marketing-related information. The Company makes estimates surrounding variable consideration and the net impact to revenues. In making such estimates, significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives and the likelihood that customers will achieve them. In the event estimates related to variable consideration change, the cumulative effect of these changes is recognized as if the revised estimates had been used since revenue was initially recognized under the contract. Such revisions could occur in any reporting period, and the effects may be material. From time to time, the Company offers certain product rebates to its distributors and growers, which are estimated and recorded as reductions to product revenues, and an accrued liability is recorded at the later of when the revenues are recorded or the rebate is being offered. Contract Assets. Contract Liabilities. Research, Development and Patent Expenses Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended September 30, 2018 and 2017, research and development expenses totaled $2,381,000 and $2,890,000, respectively, and patent expenses totaled $277,000 and $262,000, respectively. For the nine months ended September 30, 2018 and 2017, research and development expenses totaled $6,898,000 and $7,881,000, respectively, and patent expenses totaled $787,000 and $568,000, 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. Shipping and handling costs for the three months ended September 30, 2018 and 2017 were $249,000 and $111,000, respectively. Shipping and handling costs for the nine months ended September 30, 2018 and 2017 were $705,000 and $315,000, respectively. Advertising The Company expenses advertising costs as incurred. Advertising costs for the three months ended September 30, 2018 and 2017 were $192,000 and $80,000, respectively. Advertising costs for the nine months ended September 30, 2018 and 2017 were $794,000 and $284,000, respectively. 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. Net Loss Per Share Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of certain potential common stock equivalents, which consist of stock options and warrants to purchase common stock and restricted stock units, are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands): SEPTEMBER 30, 2018 2017 Stock options outstanding 7,179 3,198 Warrants to purchase common stock 52,647 4,232 Restricted stock units outstanding 1,075 672 60,901 8,102 Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 in the first quarter of 2018 using the modified-retrospective method. This adoption primarily affected the Company’s product revenues accounted for using the sell-through method under ASC 605 , Revenue Recognition, The Company adopted Accounting Standards Update 2014-09 (“ASU 2014-09”), which supersedes the revenue guidance under ASC 605, generally requires the Company to recognize revenue and profit from its product sales arrangements earlier and in a more linear fashion than historical practice under ASC 605, including the estimation of sell-through revenue and variable consideration that would otherwise have been deferred. Following the adoption of ASU 2014-09, the revenue recognition for the Company’s license arrangements remained materially consistent with its historical practice. See the tables above in this note for the effects of the adoption of ASU 2014-09 on the Company’s condensed consolidated financial statements as of January 1, 2018 and for the nine months ended September 30, 2018. See “Revenue Recognition” above for further discussion of the effects of the adoption of ASU 2014-09 on the Company’s significant accounting policies. The adoption of this standard had a material impact on the Company’s condensed consolidated financial statements as disclosed above and is expected to continue to have a material impact for the foreseeable future. The Company adopted Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendment updated and clarified how certain cash receipts and cash payments are to be presented and classified in the statement of cash flows. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact on future periods. The Company adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The amendment requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 in the first quarter of 2018. The adoption primarily resulted in the inclusion of the restricted cash balances within the overall cash balances and a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheet. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact for the foreseeable future. See “Cash and Cash Equivalents and Restricted Cash” above for further discussion of the effects of the adoption of ASU 2016-18 on the Company’s significant accounting policies. In March 2018, the Financial Accounting Standards Board (“FASB”) issued guidance pertaining to the accounting of the Tax Cuts and Jobs Act (“TCJA”), allowing companies a year to finalize and record any provisional or inestimable impacts of the TCJA. This guidance is effective upon issuance during this quarter. The adoption of this particular guidance did not have a material effect on the Company’s condensed consolidated financial statements. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815), (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception,” (ASU No. 2017-11) which allows for the exclusion of a down round feature, when evaluating whether or not an instrument or embedded feature requires derivative classification. The Company early adopted this guidance beginning January 1, 2018. The adoption of this standard had a material impact on the Company’s condensed consolidated financial statements as the Company was not required to classify the warrants issued in conjunction with the February 5, 2018 equity financing as derivatives. In March 2018, the FASB issued ASU No. 2018-05, “Income Taxes (Topic 740)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” (ASU No. 2018-05) which amends certain Securities and Exchange Commission (SEC) material in Topic 740 for the income tax accounting implications of the recently issued Tax Reform. This guidance clarifies the application of Topic 740 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under Topic 740 for certain income tax effects of Tax Reform for the reporting period in which Tax Reform was enacted. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements of the Company. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718); Improvements to Nonemployee Share-Based Payment Accounting” (ASU No. 2018-07) which aligned certain aspects of share based payments accounting between employees and non-employees. Specifically nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied and an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. The Company early adopted this guidance beginning January 1, 2018 using the modified –retrospective method. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. Recently Issued Accounting Pronouncements 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 liabilities on the balance sheet and disclosing key quantitative and qualitative disclosures regarding leasing arrangements with terms longer than 12 months. 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 with certain practical expedients available. 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 its leasing arrangements under ASU 2016-02, and related ASUs issued after February 2016, including Accounting Standard Update No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and Accounting Standard Update No. 2018-11, Leases (Topic 842): Targeted Improvement (“ASU 2018-11”) issued in July 2018, to determine the potential impact to its condensed consolidated financial statements and related disclosures. 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 condensed consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220),” (ASU No. 2018-02) which allows for the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (Tax Reform) to be reclassified from accumulated other comprehensive income to retained earnings. The provisions of ASU No. 2018-02 are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual periods, with early adoption permitted. This ASU shall be applied either at the beginning of the annual or interim period of adoption or retrospectively to each period in which the income tax effects of Tax Reform affects the items remaining in accumulated other comprehensive income (loss). The Company has not yet determined the impact of implementing this new standard, on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820),” (ASU No. 2018-13), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The provisions of ASU No. 2018-13 are effective for annual reporting periods beginning after December 15, 2019 and interim reporting periods within those annual periods, with early adoption permitted. Amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurements uncertainty should be applied prospectively for only the most recent interim or annual periods presented in the initial year of adoption with all other amendments applied retroactively to all periods presented upon their effective date. The Company has not yet determined the impact of implementing this new standard on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40),” (ASU No. 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions of ASU No. 2018-15 are effective for annual reporting periods beginning after December 15, 2019 and interim reporting periods within those annual periods, with early adoption permitted. This ASU shall be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company has not yet determined the impact of implementing this new standard on its condensed consolidated financial statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification”, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholder’s equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholder’s equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. The Company intends to apply the new guidance to its condensed consolidated financial statements in the first interim period of fiscal year 2019. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 3. Fair Value Measurements Accounting Standards Codification (“ASC”) 820, Fair Value Measurements ASC 820 requires that the valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. ASC 820 establishes a three tier value hierarchy, which prioritizes inputs that may be used to measure fair value as follows: ● Level 1—Quoted prices in active markets for identical assets or liabilities. ● Level 2—Observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. ● Level 3—Inputs that are generally unobservable and typically reflect management’s estimate of assumptions that market participants would use in pricing the asset or liability. The following table presents the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands): SEPTEMBER 30, 2018 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Liabilities Derivative liability $ — $ — $ — $ — DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Derivative liability $ 674 $ — $ — $ 674 The Company estimated the fair value of the derivative liability as of February 5, 2018 and as of December 31, 2017 using an option pricing model. See Note 6 for further discussion of the extinguishment of the derivative liability in conjunction with the conversion of debt into common shares and issuance of warrants. 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. 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 December 31, 2017 and February 5, 2018, 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 condensed consolidated statement of operations. The following table provides a reconciliation of the activity between the beginning date and ending balances for the derivative liability measured at fair value using significant unobservable inputs (Level 3) (in thousands): DERIVATIVE LIABILITY Fair value at December 31, 2017 $ 674 Derivative liability issued 573 Change fair value of financial instruments 5,177 Derivative liability extinguished (6,424 ) Fair value at September 30, 2018 $ — The following table represents significant unobservable inputs used in determining the fair value of the derivative liability: FEBRUARY 5, 2018 DECEMBER 31, 2017 Stock Price volatility 60 % 60 % Risk-free rate 1.46 % 1.28 % Probability weighted term in years 0.18 0.42 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. Inventories Inventories, net consist of the following (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Raw materials $ 2,829 $ 2,310 Work in progress 2,026 2,441 Finished goods 3,988 5,076 $ 8,843 $ 9,827 As of September 30, 2018 and December 31, 2017, the Company had $421,000 and $252,000, respectively, in reserves against its inventories. |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 5. Accrued Liabilities Accrued liabilities consist of the following (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Accrued compensation $ 1,656 $ 1,825 Accrued warranty costs 402 556 Accrued legal costs 284 1,558 Accrued customer incentives 1,725 1,986 Accrued liabilities, other 1,866 2,264 $ 5,933 $ 8,189 The Company warrants the specifications 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. During the three and nine months ended September 30, 2018, the Company recognized $58,000 and $162,000, respectively, in warranty expense associated with product shipments for the period. This expense was reduced by $89,000 and $287,000, respectively, for the three and nine months ended September 30, 2018 as a result of the historical usage of warranty reserves being lower than previously estimated. Additionally, during the three and nine months ended September 30, 2018 the Company settled warranty claims in the amounts of $22,000 and $29,000, respectively. 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, 2017 $ 556 Warranties issued (released) during the period (125 ) Settlements made during the period (29 ) Balance at September 30, 2018 $ 402 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Debt, including debt due to related parties, consists of the following (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 8.00% per annum, interest and principal due at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of September 30, 2018 and December 31, 2017 of $0 and $103, respectively, with imputed interest rate of 0% $ 3,425 $ 12,347 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (7.0% as of September 30, 2018) 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 September 30, 2018 and December 31, 2017 of $210 and $226, respectively, with discount based on imputed interest rate of 7.0% 8,697 8,872 Senior secured convertible promissory notes (“Secured December 2017 Convertible Note”) bearing interest at 10% per annum, interest and principal through the conversion date in February 2018, collateralized by substantially all of the Company’s assets, net of unamortized discount as of September 30, 2018 and December 31, 2017 of $0 and $510, respectively — 3,490 Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.8% annually) payable through the lenders direct collection of certain accounts receivable through May 2018, collateralized by substantially all of the Company’s personal property, net of unamortized debt discount as of September 30, 2018 and December 31, 2017 of $0 and $54, respectively, with an imputed interest rate of 29.2% 1,497 1,222 Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest and principal payable at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets, net of unamortized discount as of September 30, 2018 and December 31, 2017 of $0 and $2,178, respectively, with debt discount based on imputed interest rate of 0% (see Note 11 and 12) 7,300 37,822 Debt, including debt due to related parties 20,919 63,753 Less debt due to related parties (7,300 ) (37,822 ) Less current portion (1,737 ) (1,524 ) $ 11,882 $ 24,407 As of September 30, 2018, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties, are due as follows (in thousands): Period ended September, 2018 2018 $ 1,562 2019 265 2020 283 2021 305 2022 7,778 Thereafter 7,663 Total future principal payments 17,856 Interest payments included in debt balance (1) 3,275 $ 21,131 (1) Due to the debt extinguishment requirement, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt, as further discussed in Notes 11 and 12. The fair value of the Company’s outstanding debt obligations as of September 30, 2018 and December 31, 2017 was $12,296,000 and $21,133,000, respectively, which as of September 30, 2018 was estimated based on a discounted cash flow model using an estimated market rate of interest of 15% for the fixed rate debt and 7.0% for the variable rate debt, and is classified as Level 3 within the fair value hierarchy. As of December 31, 2017, 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 conversion to equity and applying this ratio to the outstanding principal balance. The Company used 7.0%, 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. The following is a reconciliation of interest expense for the debt outstanding during the three and nine months ended (in thousands). SEPTEMBER 30, 2018 Interest Expense Related Party, Net Non cash Three Months October 2012 and April 2013 Secured Promissory Notes $ — $ — $ — June 2014 Secured Promissory Note 166 — 5 Secured December 2017 Convertible Note (1) — — — LSQ Financing 56 — — August 2015 Senior Secured Promissory Notes — — — ASC 606 Financing Component (2) 78 — 78 $ 300 $ — $ 83 SEPTEMBER 30, 2017 Interest Expense Related Party, Net Non cash Three Months October 2012 and April 2013 Secured Promissory Notes $ 482 $ — $ 46 June 2014 Secured Promissory Note 148 — 7 Secured December 2017 Convertible Note (1) — 1,098 291 LSQ Financing 108 — 54 August 2015 Senior Secured Promissory Notes — — — ASC 606 Financing Component (2) — — — Capital leases and other 66 — — $ 804 $ 1,098 $ 398 SEPTEMBER 30, 2018 Interest Expense Related Party, Net Non cash Nine Months October 2012 and April 2013 Secured Promissory Notes $ 213 $ — $ 42 June 2014 Secured Promissory Note 474 — 16 Secured December 2017 Convertible Note (1) 529 — 322 LSQ Financing 306 — 57 August 2015 Senior Secured Promissory Notes — 451 133 ASC 606 Financing Component (2) 237 — 237 $ 1,759 $ 451 $ 807 SEPTEMBER 30, 2017 Interest Expense Related Party, Net Non cash Nine Months October 2012 and April 2013 Secured Promissory Notes $ 1,444 $ — $ 138 June 2014 Secured Promissory Note 424 — 17 Secured December 2017 Convertible Note (1) — — — LSQ Financing 336 — 108 August 2015 Senior Secured Promissory Notes — 3,257 867 ASC 606 Financing Component (2) — — — Capital leases and other 104 — — $ 2,308 $ 3,257 $ 1,130 (1) This agreement was terminated in February 2018 (2) The Company adopted ASC 606 on January 1, 2018. Secured Promissory Notes On October 2, 2012, the Company borrowed $7,500,000 pursuant to senior notes (the “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, the “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 bore interest at 14% at until February 5, 2018. 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 is outstanding as of September 30, 2018. Simultaneously with the Snyder Debt Conversion, the maturity of the October 2012 and April 2013 Secured Promissory Notes was extended to December 31, 2022 (“Maturity Date”), 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 Date. This loan is collateralized by substantially all of the Company’s assets. The October 2012 and April 2013 Secured Promissory Notes contain representations and warranties by the Company and the lender, certain indemnification provisions in favor of the lenders and customary covenants (including limitations on other debt, liens, acquisitions, investments and dividends), and events of default (including payment defaults, breaches of covenants, a material impairment in the lender’s security interest or in the collateral, and events relating to bankruptcy or insolvency). The October 2012 and April 2013 Secured Promissory Notes contain several restrictive covenants. The Company is in compliance with all related covenants, or has received an appropriate waiver of these covenants. In conjunction with the Snyder Debt Conversion, the Company accounted for the partial debt extinguishment under the troubled debt restructuring accounting guidance. The Company recognized a gain of $2,821,000 for the nine months ended September 30, 2018 on partial extinguishment of the October 2012 and April 2013 Secured Promissory Notes. Because the Company recognized a gain on the partial extinguishment of debt, the Company was required to include all future interest and additional consideration, which included accrued interest, under the terms of this agreement as a reduction of the gain. As a result, the amount of the debt on the Company’s balance sheet related to the October 2012 and April 2013 Secured Promissory Notes is $3,425,000, as compared to $2,450,000 of contractual principal outstanding thereunder. Going forward, subject to future amendments to debt agreement or costs, the Company will not recognize future interest expense on the October 2012 and April 2013 Secured Promissory Notes. The accounting for the change due to the Snyder Debt Conversion is as follows (in thousands): December 31, 2017 $ 12,347 Conversion of debt into equity (10,000 ) Change in discount, net 103 Future interest expense 975 September 30, 2018 $ 3,425 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 7.0% as of September 30, 2018. 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 September 30, 2018, the Company had $46,000 remaining in this restricted deposit account, which is recorded as restricted cash included in current assets. The June 2014 Secured Promissory Note contains representations and warranties by the Company and the Lender, certain indemnification provisions in favor of the Lender and customary covenants (including limitations on other debt, liens, acquisitions, investments and dividends), and events of default (including payment defaults, breaches of covenants, a material impairment in the Lender’s security interest or in the collateral, and events relating to bankruptcy or insolvency). The June 2014 Secured Promissory Note contains several restrictive covenants and the most significant of which requires the Company to maintain a debt to net worth ratio of no greater than 4.0 to 1.0 at all times. The Company is in compliance with all related covenants, or has received an appropriate waiver of these covenants. 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 was subject to Anderson’s approval and due on October 23, 2020 (the “Anderson 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 Anderson 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 Anderson 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 Anderson Maturity Date, the aggregate outstanding principal balance of the October 2017 Convertible Note and all accrued and unpaid interest thereon could be converted, 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 was 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 the Securities Purchase Agreement with an affiliate of Anderson and certain other accredited investors (collectively, the “Buyers”). In conjunction with the transaction contemplated in the Securities 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 was received on January 31, 2018. 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 Convertible 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 February 5, 2018, the outstanding principal balance under the Secured December Convertible Note was $6,000,000. The interest rate and conversion terms of the Secured December 2017 Convertible Note remained unchanged from the terms of the October 2017 Convertible Note as described above. On February 5, 2018, the holder converted the outstanding principal of $6,000,000 under the Secured December 2017 Convertible Note into common shares of the Company in accordance with the terms of the Securities Purchase Agreement which provided for conversion of the outstanding balance at a rate of $0.50 per common share. After the conversion into common shares on February 5, 2018, there was no outstanding balance under the Secured December 2017 Convertible Note. The Company accounted for the full conversion of the Secured December 2017 Convertible Note using the accounting guidance related to an induced debt conversion of convertible notes. Under the induced conversion guidance, the Company recognized a loss on conversion in the amount of $9,867,000 associated with the change between the debt’s original terms and the induced conversion terms. This loss related to the induced conversion feature was partially offset by a gain on extinguishment of $6,424,000 of certain other elements of the Secured December 2017 Convertible Note. The accounting for the change due to the Secured December 2017 Convertible Note is as follows (in thousands): December 31, 2017 $ 3,490 Increase in debt 2,000 Conversion of debt into equity (6,000 ) Change in discount, net 510 September 30, 2018 $ - 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 Gordon Snyder, an individual, as administrative agent for the Snyder lenders (the “Snyder Agent”), on behalf of the Snyder lenders, and the agent for the holders of the August 2015 Senior Secured Promissory Notes. Advances by LSQ may be made at an advance rate of 80% of the face value of the receivables being sold. The Company also pays 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 original LSQ Financing was effective for one year with automatic one year renewals thereafter unless terminated within a 30-day window near 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. The agreement contains representations and warranties by the Company and LSQ, certain indemnification provisions in favor of LSQ and customary covenants (including limitations on other debt, liens, acquisitions, investments and dividends), and events of default (including payment defaults, breaches of covenants, a material impairment in LSQ’s security interest or in the collateral, and events relating to bankruptcy or insolvency). The Company is in compliance with all terms of the agreement. In January 2018, the Company notified LSQ that it would be terminating the LSQ Financing in March 2018. In March 2018, the Company and LSQ amended the LSQ Financing agreement and extended the term for an additional 60 days. In June 2018, the Company amended the LSQ Financing arrangement which effectively decreased the (i) invoice purchase fee from 1.00% to a range of 0.40% to 1.00% ii) funds usage fee from 0.035% to a range of 0.020% to 0.035% and extended the terms of the agreement to June 30, 2019. 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. As of September 30, 2018, $1,497,000 was outstanding under the LSQ Financing. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 7. Warrants The following table summarizes information about the Company’s common stock warrants outstanding as of September 30, 2018 (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 (November 2017 Warrants) June 2017 June 2027 80 $ 1.10 In connection with February 2018 Financing Transaction (February 2018 Warrants 1) February 2018 December 2020 43,350 $ 1.00 In connection with February 2018 Financing Transaction (February 2018 Warrants 2) February 2018 December 2020 5,065 $ 1.25 52,647 As of September 30, 2018, the weighted average remaining contractual life and exercise price for these warrants is 2.48 years and $1.10, respectively. (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. |
Share-Based Plans
Share-Based Plans | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Plans | 8. Share-Based Plans As of September 30, 2018, there were options to purchase 7,179,000 shares of common stock outstanding, 1,075,000 restricted stock units outstanding and 6,249,000 share-based awards available for grant under the outstanding equity incentive plans. For the three months ended September 30, 2018 and 2017, the Company recognized share-based compensation of $437,000 and $555,000, respectively. For the nine months ended September 30, 2018 and 2017, the Company recognized share-based compensation of $1,310,000 and $1,724,000, respectively. During the three months ended September 30, 2018 and 2017, the Company granted options to purchase 39,000 and 29,000 shares of common stock, respectively, at a weighted average exercise price of $1.99 and $1.18, respectively. During the three months ended September 30, 2018, options to purchase 53,000 shares of common stock were exercised at a weighted average exercise price of $1.17. During the three months ended September 30, 2017 there were no options exercised. During the nine months ended September 30, 2018 and 2017, the Company granted options to purchase 4,509,000 and 85,000 shares of common stock, respectively, at a weighted-average exercise price of $1.78 and $1.56, respectively. During the nine months ended September 30, 2018 and 2017, options to purchase 56,000 and 14,000 shares were exercised at a weighted average exercise prices of $1.17 and $1.21 per share, respectively. The following table summarizes the activity of restricted stock units from December 31, 2017 to September 30, 2018 (in thousands, except weighted average grant date fair value): WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Nonvested at December 31, 2017 335 $ 0.94 Granted 635 1.70 Vested (491 ) 1.18 Forfeited (46 ) 1.24 Nonvested at September 30, 2018 433 $ 1.37 During the three and nine months ended September 30, 2018, the Company granted 0 and 105,000 restricted stock units, respectively, in partial satisfaction of incentive compensation due to certain executives as of December 31, 2017. There were no such grants during the three and nine months ended September 30, 2017. These grants resulted in the reclassification of $205,000 from accrued liabilities to additional paid in capital as of September 30, 2018. |
Common Stock Offering
Common Stock Offering | 9 Months Ended |
Sep. 30, 2018 | |
Common Stock Offering | |
Common Stock Offering | 9. Common Stock Offering In April 2018, the Company completed an underwritten public offering of 8,366,250 registered shares of its common stock |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 10. Commitments and Contingencies Operating Leases In June 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. On January 19, 2016, the Company entered into an agreement with a sublessee to sublease approximately 3,800 square feet of vacant office space located in Davis, California pursuant to the terms of its lease agreement. The initial term of the sublease is for a period of approximately 43 months and commenced on February 1, 2016. The monthly base rent is approximately $5,000 per month for the first 12 months with a 5% increase each year thereafter. Litigation On April 3, 2018, the Company was named as a defendant in a complaint filed by Piper Jaffray, Inc. (“Piper”) with the Superior Court of the State of Delaware. The Company was informed of and received Piper’s complaint and related documents on April 5, 2018, following the filing of the Company’s Annual Report on Form 10-K for the year ended December 31, 2017. Piper’s complaint alleges one breach of contract claim, specifically, that the Company breached an engagement letter with Piper by failure to pay a $2,000,000 transaction fee, which Piper alleges is due under the engagement letter as a result of the Company’s consummation of its private placement and debt refinancing transactions in February 2018. Piper’s complaint includes a demand for payment the foregoing transaction fee, in addition to interest and costs and expenses incurred in pursuing the action, including reasonable attorneys’ fees. While the Company believes Piper’s complaint is without merit, this matter is at an early stage, and the outcome of this matter is not presently determinable. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 11. 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. The first interest payment was payable December 31, 2015 and until February 5, 2018, interest was payable semi-annually on June 30 and December 31. Until February 5, 2018, principal payments of $10,000,000, $10,000,000, and $20,000,000 were payable on the third, fourth and fifth anniversaries of the closing date of the August 2015 Senior Secured Promissory Notes. Debt due to related parties as of September 30, 2018 was $7,300,000. The fair value of the Company’s debt due to related parties was $4,028,000 and $21,714,000 as of September 30, 2018 and December 31, 2017, respectively. 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. The August 2015 Senior Secured Promissory Notes contain representations and warranties by the Company and the lenders, certain indemnification provisions in favor of the lenders and customary covenants (including limitations on other debt, liens, acquisitions, investments and dividends), and events of default (including payment defaults, breaches of covenants, a material impairment in the Lender’s security interest or in the collateral, and events relating to bankruptcy or insolvency). The August 2015 Senior Secured Promissory Notes contain several restrictive covenants and the most significant of which requires the Company to maintain a minimum cash balance of $15,000,000. In May 2016, the agreement was amended to remove this minimum cash balance requirement. The Company is in compliance with all other related covenants, or has received an appropriate waiver of these covenants. On February 5, 2018, the holders of the August 2015 Senior Secured Promissory Notes, pursuant to an amendment dated December 15, 2017, converted $35,000,000 of the then outstanding debt into 20,000,000 shares of common stock and warrants to purchase 4,000,000 shares of common stock (such conversion, the “Waddell Debt Conversion”). After the conversion, $5,000,000 in principal remained outstanding. Simultaneously with the Waddell Debt Conversion, the maturity of the August 2015 Senior Secured Promissory Notes was extended to December 31, 2022, and payment of all future interest 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. In conjunction with the Waddell Debt Conversion, the Company accounted for the partial debt extinguishment under the troubled debt restructuring accounting guidance. The Company recognized a gain of $9,622,000 for the nine months ended September 30, 2018, on partial extinguishment of the August 2015 Senior Secured Promissory Notes. Because the Company recognized a gain on the partial extinguishment of debt, the Company was required to include all future interest and additional consideration, which included accrued interest, under the terms of this agreement as a reduction of the gain. As a result, the amount of the debt on the Company’s balance sheet related to the August 2015 Senior Secured Promissory Notes is $7,300,000, as compared to $5,000,000 of contractual principal amount outstanding thereunder. Going forward, subject to future amendments to debt agreement or costs, the Company will not recognize future interest expense on the August 2015 Senior Secured Promissory Notes. The accounting for the change due to the August 2015 Senior Secured Promissory Notes is as follows (in thousands): December 31, 2017 $ 37,822 Conversion of debt into equity (35,000 ) Change in discount, net 2,178 Accrued and future interest expense (1) 2,300 September 30, 2018 $ 7,300 (1) Includes reclassification of $598,000 in accrued interest to debt. |
Equity Offering and Related Tra
Equity Offering and Related Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Equity Offering And Related Transactions | |
Equity Offering and Related Transactions | 12. Equity Offering and Related Transactions On February 5, 2018, pursuant to a private placement, the Company issued 70,514,000 shares of common stock and warrants to purchase 48,493,000 shares of common stock. Of the shares issued, 44,000,000, 25,714,000 and 800,000 shares were issued pursuant to the Securities Purchase Agreement, certain debt agreement amendments (see Notes 6 and 11) and as part of a placement agent fee, respectively. Of the warrants, warrants to purchase 41,333,000, 5,143,000 and 2,017,000 shares were issued pursuant to the Securities Purchase Agreement, certain debt agreements (see Notes 6 and 11) and as part of a placement agent fee, respectively. For further discussion of the warrants, see Note 7. The gross proceeds from the 44,000,000 shares issued under the Securities Purchase Agreement were $30,000,000 which included the conversion of $6,000,000 in convertible debt under the then outstanding December 2017 Convertible Note. Also, the Company converted $10,000,000 in debt under the October 2012 and April 2013 Secured Promissory Notes and $35,000,000 in debt under the Senior Secured Promissory Notes into a total of 25,714,000 shares. The estimated net proceeds from this private placement, inclusive of the cash received from the December 2017 Convertible Note, was $27,300,000. The Company incurred $2,700,000 in expenses associated with the private placement and debt conversion of which $2,180,000 was related to the equity component of these transactions. The Company classified the warrants issued in connection with the Securities Purchase Agreement and conversion of debt into equity as equity. As a result of the financing transaction discussed above, the Company’s additional paid in capital and common stock increased by $64,312,000 and $1,000, respectively. The Company allocated the value of the financing transaction to the common shares issued in the amount of $53,385,000 and to the warrants issued in the amount of $10,928,000 based on the relative fair values of each on the transaction date. In April 2018, the Company completed an underwritten public offering of 8,366,250 registered shares of its common stock |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events None. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial information as of September 30, 2018, and for the three and nine months ended September 30, 2018 and 2017, has been prepared by the Company, without audit, in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Certain information and note disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such SEC rules and regulations and accounting principles applicable for interim periods. However, the Company believes that the disclosures are adequate to make the information presented not misleading. The information included in this Quarterly Report on Form 10-Q should be read in connection with the consolidated financial statements and accompanying notes included in the Company’s Annual Report filed on Form 10-K for the fiscal year ended December 31, 2017. In the opinion of management, the condensed consolidated financial statements as of September 30, 2018, and for the three and nine months ended September 30, 2018 and 2017, reflect all adjustments, which are normal recurring adjustments, necessary to present a fair statement of financial position, results of operations and cash flows. The results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the operating results for the full fiscal year or any future periods. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The Company used significant estimates in accounting for the useful lives of property, plant and equipment, reserves for inventory obsolescence, fair value estimates and in its going concern analysis. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows in thousands: SEPTEMBER 30, 2018 2017 Cash and cash equivalents $ 20,524 $ 3,737 Restricted cash, current portion 46 933 Restricted cash, less current portion 1,560 1,560 Total cash, cash equivalents and restricted cash $ 22,130 $ 6,230 |
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. |
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. The Company’s principal sources of revenues are its Regalia, Grandevo and Venerate product lines. These three product lines accounted for 95% and 87% of the Company’s total revenues for the three months ended September 30, 2018 and 2017, respectively. These three product lines accounted for 93% and 87% of the Company’s total revenues for the nine months ended September 30, 2018 and 2017, respectively. Revenues generated from international customers were 11% and 4% for the three months ended September 30, 2018 and 2017, respectively, and 11% and 9% for each of the nine months ended September 30, 2018 and 2017, respectively. Customers to which 10% or more of the Company’s total revenues are attributable for any one of the periods presented consist of the following: CUSTOMER A CUSTOMER B CUSTOMER C CUSTOMER D Three months ended September 30, 2018 31 % 19 % 13 % 6 % 2017 16 % 20 % 7 % 10 % CUSTOMER A CUSTOMER B CUSTOMER C Nine months ended September 30, 2018 22 % 20 % 12 % 2017 4 % 25 % 9 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either September 30, 2018 or December 31, 2017 consist of the following: CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER A B C D E F September 30, 2018 31 % 20 % 13 % 0 % 2 % 0 % December 31, 2017 9 % 22 % 2 % 16 % 11 % 11 % |
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 has one supplier of 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 maintains 6-12 months of knotweed extract 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. Additionally, tariffs placed on Chinese goods exported to the United States may impact the cost of this active ingredient. |
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 September 30, 2018 and December 31, 2017, the Company recorded deferred cost of product revenues of $1,000 and $3,063,000 respectively. |
Deferred Revenue | Deferred Revenue When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring control of goods or services to the customer under the terms of a sales contract, the Company records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales after the Company has transferred control of the goods or services to the customer and all revenue recognition criteria are met. The Company’s deferred revenue is broken out as follows (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Product revenues $ 532 $ 6,449 Financing costs (1) 611 - License revenues 1,845 1,790 2,988 8,239 Less current portion (356 ) (6,193 ) $ 2,632 $ 2,046 (1) |
Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted the Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers The cumulative effect of the changes made to the Company’s condensed consolidated balance sheet on January 1, 2018 for the adoption of the new revenue standard was as follows (in thousands): BALANCE SHEET As Reported December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 ASSETS Deferred cost of product revenues $ 3,063 $ (3,058 ) $ 5 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue, current portion 6,193 (5,893 ) 300 Deferred revenue, less current portion 2,046 524 2,570 Accumulated deficit $ (265,572 ) $ 2,311 $ (263,261 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations was as follows (in thousands): SEPTEMBER 30, 2018 BALANCE SHEET As Reported Impacts Due to ASC 606 As Reported without Impacts of ASC 606 ASSETS Deferred cost of product revenues $ 1 $ 2,377 $ 2,378 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue, current portion 356 4,822 5,178 Deferred revenue, less current portion 2,632 (611 ) 2,021 Accrued liabilities 5,933 - 5,933 Accumulated deficit (275,462 ) $ (1,834 ) $ (277,296 ) For the Three Months Ended SEPTEMBER 30, 2018 As Reported Impacts Due to ASC 606 Results without Impacts of ASC 606 STATEMENT OF OPERATIONS Revenues Product $ 5,310 $ 972 $ 6,282 License 115 (41 ) 74 Cost of product revenues 2,803 455 3,258 Interest expense (300 ) 72 (228 ) Net loss (1) $ (4,439 ) $ 548 $ (3,891 ) For the Nine Months Ended SEPTEMBER 30, 2018 As Reported Impacts Due to ASC 606 Results without Impacts of ASC 606 STATEMENT OF OPERATIONS Revenues Product $ 15,171 $ 1,062 $ 16,233 License 330 (135 ) 195 Cost of product revenues 8,075 681 8,756 Interest expense (1,759 ) 231 (1,528 ) Net loss (1) $ (12,201 ) $ 477 $ (11,724 ) (1) Product Sales. Licenses Revenues. Financing Component Revenues. Revenue recognition requires the Company to make a number of estimates that include variable consideration. For example, customers may receive sales or volume-based pricing incentives or receive incentives for providing the Company with marketing-related information. The Company makes estimates surrounding variable consideration and the net impact to revenues. In making such estimates, significant judgment is required to evaluate assumptions related to the amount of net contract revenues, including the impact of any performance incentives and the likelihood that customers will achieve them. In the event estimates related to variable consideration change, the cumulative effect of these changes is recognized as if the revised estimates had been used since revenue was initially recognized under the contract. Such revisions could occur in any reporting period, and the effects may be material. From time to time, the Company offers certain product rebates to its distributors and growers, which are estimated and recorded as reductions to product revenues, and an accrued liability is recorded at the later of when the revenues are recorded or the rebate is being offered. Contract Assets. Contract Liabilities. |
Research, Development and Patent Expenses | Research, Development and Patent Expenses Research and development expenses include payroll-related expenses, field trial costs, toxicology costs, regulatory costs, consulting costs and lab costs. Patent expenses include legal costs relating to the patents and patent filing costs. These costs are expensed to operations as incurred. For the three months ended September 30, 2018 and 2017, research and development expenses totaled $2,381,000 and $2,890,000, respectively, and patent expenses totaled $277,000 and $262,000, respectively. For the nine months ended September 30, 2018 and 2017, research and development expenses totaled $6,898,000 and $7,881,000, respectively, and patent expenses totaled $787,000 and $568,000, 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. Shipping and handling costs for the three months ended September 30, 2018 and 2017 were $249,000 and $111,000, respectively. Shipping and handling costs for the nine months ended September 30, 2018 and 2017 were $705,000 and $315,000, respectively. |
Advertising | Advertising The Company expenses advertising costs as incurred. Advertising costs for the three months ended September 30, 2018 and 2017 were $192,000 and $80,000, respectively. Advertising costs for the nine months ended September 30, 2018 and 2017 were $794,000 and $284,000, respectively. |
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. |
Net Loss Per Share | Net Loss Per Share Net loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding for the period. The calculation of basic and diluted net loss per share is the same for all periods presented as the effect of certain potential common stock equivalents, which consist of stock options and warrants to purchase common stock and restricted stock units, are anti-dilutive due to the Company’s net loss position. Anti-dilutive common stock equivalents are excluded from diluted net loss per share. The following table sets forth the potential shares of common stock as of the end of each period presented that are not included in the calculation of diluted net loss per share because to do so would be anti-dilutive (in thousands): SEPTEMBER 30, 2018 2017 Stock options outstanding 7,179 3,198 Warrants to purchase common stock 52,647 4,232 Restricted stock units outstanding 1,075 672 60,901 8,102 |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606) The Company adopted ASU 2014-09 in the first quarter of 2018 using the modified-retrospective method. This adoption primarily affected the Company’s product revenues accounted for using the sell-through method under ASC 605 , Revenue Recognition, The Company adopted Accounting Standards Update 2014-09 (“ASU 2014-09”), which supersedes the revenue guidance under ASC 605, generally requires the Company to recognize revenue and profit from its product sales arrangements earlier and in a more linear fashion than historical practice under ASC 605, including the estimation of sell-through revenue and variable consideration that would otherwise have been deferred. Following the adoption of ASU 2014-09, the revenue recognition for the Company’s license arrangements remained materially consistent with its historical practice. See the tables above in this note for the effects of the adoption of ASU 2014-09 on the Company’s condensed consolidated financial statements as of January 1, 2018 and for the nine months ended September 30, 2018. See “Revenue Recognition” above for further discussion of the effects of the adoption of ASU 2014-09 on the Company’s significant accounting policies. The adoption of this standard had a material impact on the Company’s condensed consolidated financial statements as disclosed above and is expected to continue to have a material impact for the foreseeable future. The Company adopted Accounting Standards Update No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (“ASU 2016-15”). The amendment updated and clarified how certain cash receipts and cash payments are to be presented and classified in the statement of cash flows. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact on future periods. The Company adopted Accounting Standards Update No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash (“ASU 2016-18”). The amendment requires that the statement of cash flows explain the change during the period in the total cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. The Company adopted ASU 2016-18 in the first quarter of 2018. The adoption primarily resulted in the inclusion of the restricted cash balances within the overall cash balances and a reconciliation of cash, cash equivalents and restricted cash reported on the condensed consolidated balance sheet. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and is not expected to have a material impact for the foreseeable future. See “Cash and Cash Equivalents and Restricted Cash” above for further discussion of the effects of the adoption of ASU 2016-18 on the Company’s significant accounting policies. In March 2018, the Financial Accounting Standards Board (“FASB”) issued guidance pertaining to the accounting of the Tax Cuts and Jobs Act (“TCJA”), allowing companies a year to finalize and record any provisional or inestimable impacts of the TCJA. This guidance is effective upon issuance during this quarter. The adoption of this particular guidance did not have a material effect on the Company’s condensed consolidated financial statements. In July 2017, the FASB issued ASU No. 2017-11, “Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815), (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception,” (ASU No. 2017-11) which allows for the exclusion of a down round feature, when evaluating whether or not an instrument or embedded feature requires derivative classification. The Company early adopted this guidance beginning January 1, 2018. The adoption of this standard had a material impact on the Company’s condensed consolidated financial statements as the Company was not required to classify the warrants issued in conjunction with the February 5, 2018 equity financing as derivatives. In March 2018, the FASB issued ASU No. 2018-05, “Income Taxes (Topic 740)—Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 118,” (ASU No. 2018-05) which amends certain Securities and Exchange Commission (SEC) material in Topic 740 for the income tax accounting implications of the recently issued Tax Reform. This guidance clarifies the application of Topic 740 in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete the accounting under Topic 740 for certain income tax effects of Tax Reform for the reporting period in which Tax Reform was enacted. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements of the Company. In June 2018, the FASB issued ASU No. 2018-07, “Compensation – Stock Compensation (Topic 718); Improvements to Nonemployee Share-Based Payment Accounting” (ASU No. 2018-07) which aligned certain aspects of share based payments accounting between employees and non-employees. Specifically nonemployee share-based payment awards within the scope of Topic 718 are measured at grant-date fair value of the equity instruments that an entity is obligated to issue when the good has been delivered or the service has been rendered and any other conditions necessary to earn the right to benefit from the instruments have been satisfied and an entity considers the probability of satisfying performance conditions when nonemployee share-based payment awards contain such conditions. The Company early adopted this guidance beginning January 1, 2018 using the modified –retrospective method. The adoption of this standard did not have a material impact on the condensed consolidated financial statements. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements 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 liabilities on the balance sheet and disclosing key quantitative and qualitative disclosures regarding leasing arrangements with terms longer than 12 months. 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 with certain practical expedients available. 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 its leasing arrangements under ASU 2016-02, and related ASUs issued after February 2016, including Accounting Standard Update No. 2018-10, Codification Improvements to Topic 842, Leases (“ASU 2018-10”) and Accounting Standard Update No. 2018-11, Leases (Topic 842): Targeted Improvement (“ASU 2018-11”) issued in July 2018, to determine the potential impact to its condensed consolidated financial statements and related disclosures. 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 condensed consolidated financial statements and related disclosures. In February 2018, the FASB issued ASU No. 2018-02, “Income Statement—Reporting Comprehensive Income (Topic 220),” (ASU No. 2018-02) which allows for the stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017 (Tax Reform) to be reclassified from accumulated other comprehensive income to retained earnings. The provisions of ASU No. 2018-02 are effective for annual reporting periods beginning after December 15, 2018, and interim reporting periods within those annual periods, with early adoption permitted. This ASU shall be applied either at the beginning of the annual or interim period of adoption or retrospectively to each period in which the income tax effects of Tax Reform affects the items remaining in accumulated other comprehensive income (loss). The Company has not yet determined the impact of implementing this new standard, on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820),” (ASU No. 2018-13), which modifies the disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement. The provisions of ASU No. 2018-13 are effective for annual reporting periods beginning after December 15, 2019 and interim reporting periods within those annual periods, with early adoption permitted. Amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurements uncertainty should be applied prospectively for only the most recent interim or annual periods presented in the initial year of adoption with all other amendments applied retroactively to all periods presented upon their effective date. The Company has not yet determined the impact of implementing this new standard on its condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15, “Intangibles – Goodwill and Other-Internal-Use Software (Subtopic 350-40),” (ASU No. 2018-15), which aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software. The provisions of ASU No. 2018-15 are effective for annual reporting periods beginning after December 15, 2019 and interim reporting periods within those annual periods, with early adoption permitted. This ASU shall be applied either retrospectively or prospectively to all implementation costs incurred after the date of adoption. The Company has not yet determined the impact of implementing this new standard on its condensed consolidated financial statements. In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, “Disclosure Update and Simplification”, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements on the analysis of stockholder’s equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholder’s equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of comprehensive income is required to be filed. This final rule is effective on November 5, 2018. The Company intends to apply the new guidance to its condensed consolidated financial statements in the first interim period of fiscal year 2019. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts shown in the statement of cash flows in thousands: SEPTEMBER 30, 2018 2017 Cash and cash equivalents $ 20,524 $ 3,737 Restricted cash, current portion 46 933 Restricted cash, less current portion 1,560 1,560 Total cash, cash equivalents and restricted cash $ 22,130 $ 6,230 |
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 CUSTOMER C CUSTOMER D Three months ended September 30, 2018 31 % 19 % 13 % 6 % 2017 16 % 20 % 7 % 10 % CUSTOMER A CUSTOMER B CUSTOMER C Nine months ended September 30, 2018 22 % 20 % 12 % 2017 4 % 25 % 9 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either September 30, 2018 or December 31, 2017 consist of the following: CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER CUSTOMER A B C D E F September 30, 2018 31 % 20 % 13 % 0 % 2 % 0 % December 31, 2017 9 % 22 % 2 % 16 % 11 % 11 % |
Schedule of Deferred Revenue | The Company’s deferred revenue is broken out as follows (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Product revenues $ 532 $ 6,449 Financing costs (1) 611 - License revenues 1,845 1,790 2,988 8,239 Less current portion (356 ) (6,193 ) $ 2,632 $ 2,046 (1) |
Schedule of Condensed Balance Sheet | The cumulative effect of the changes made to the Company’s condensed consolidated balance sheet on January 1, 2018 for the adoption of the new revenue standard was as follows (in thousands): BALANCE SHEET As Reported December 31, 2017 Adjustments Due to ASC 606 Balance at January 1, 2018 ASSETS Deferred cost of product revenues $ 3,063 $ (3,058 ) $ 5 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue, current portion 6,193 (5,893 ) 300 Deferred revenue, less current portion 2,046 524 2,570 Accumulated deficit $ (265,572 ) $ 2,311 $ (263,261 ) In accordance with the new revenue standard requirements, the disclosure of the impact of adoption on the Company’s Condensed Consolidated Balance Sheet and Condensed Consolidated Statement of Operations was as follows (in thousands): SEPTEMBER 30, 2018 BALANCE SHEET As Reported Impacts Due to ASC 606 As Reported without Impacts of ASC 606 ASSETS Deferred cost of product revenues $ 1 $ 2,377 $ 2,378 LIABILITIES AND STOCKHOLDERS’ EQUITY Deferred revenue, current portion 356 4,822 5,178 Deferred revenue, less current portion 2,632 (611 ) 2,021 Accrued liabilities 5,933 - 5,933 Accumulated deficit (275,462 ) $ (1,834 ) $ (277,296 ) |
Schedule of Condensed Financial Statements | For the Three Months Ended SEPTEMBER 30, 2018 As Reported Impacts Due to ASC 606 Results without Impacts of ASC 606 STATEMENT OF OPERATIONS Revenues Product $ 5,310 $ 972 $ 6,282 License 115 (41 ) 74 Cost of product revenues 2,803 455 3,258 Interest expense (300 ) 72 (228 ) Net loss (1) $ (4,439 ) $ 548 $ (3,891 ) For the Nine Months Ended SEPTEMBER 30, 2018 As Reported Impacts Due to ASC 606 Results without Impacts of ASC 606 STATEMENT OF OPERATIONS Revenues Product $ 15,171 $ 1,062 $ 16,233 License 330 (135 ) 195 Cost of product revenues 8,075 681 8,756 Interest expense (1,759 ) 231 (1,528 ) Net loss (1) $ (12,201 ) $ 477 $ (11,724 ) (1) |
Schedule of Antidilutive Securities Excluded from Computation of Earnings 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): SEPTEMBER 30, 2018 2017 Stock options outstanding 7,179 3,198 Warrants to purchase common stock 52,647 4,232 Restricted stock units outstanding 1,075 672 60,901 8,102 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Schedule of Derivative Liability Level 1 Valuation Hierarchy | The following table presents the Company’s financial assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017 (in thousands): SEPTEMBER 30, 2018 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Liabilities Derivative liability $ — $ — $ — $ — DECEMBER 31, 2017 TOTAL LEVEL 1 LEVEL 2 LEVEL 3 Derivative liability $ 674 $ — $ — $ 674 |
Schedule of Derivative Liability Measured at Fair Value Using Unobservable Inputs | The following table provides a reconciliation of the activity between the beginning date and ending balances for the derivative liability measured at fair value using significant unobservable inputs (Level 3) (in thousands): DERIVATIVE LIABILITY Fair value at December 31, 2017 $ 674 Derivative liability issued 573 Change fair value of financial instruments 5,177 Derivative liability extinguished (6,424 ) Fair value at September 30, 2018 $ — |
Schedule of Fair Value of Derivative Liability | The following table represents significant unobservable inputs used in determining the fair value of the derivative liability: FEBRUARY 5, 2018 DECEMBER 31, 2017 Stock Price volatility 60 % 60 % Risk-free rate 1.46 % 1.28 % Probability weighted term in years 0.18 0.42 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net consist of the following (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Raw materials $ 2,829 $ 2,310 Work in progress 2,026 2,441 Finished goods 3,988 5,076 $ 8,843 $ 9,827 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Accrued compensation $ 1,656 $ 1,825 Accrued warranty costs 402 556 Accrued legal costs 284 1,558 Accrued customer incentives 1,725 1,986 Accrued liabilities, other 1,866 2,264 $ 5,933 $ 8,189 |
Schedule of Changes in Accrued Warranty Costs | Changes in the Company’s accrued warranty costs during the period are as follows (in thousands): Balance at December 31, 2017 $ 556 Warranties issued (released) during the period (125 ) Settlements made during the period (29 ) Balance at September 30, 2018 $ 402 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Including Debt to Related Parties | Debt, including debt due to related parties, consists of the following (in thousands): SEPTEMBER 30, 2018 DECEMBER 31, 2017 Secured promissory notes (“October 2012 and April 2013 Secured Promissory Notes”) bearing interest at 8.00% per annum, interest and principal due at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets, net of unamortized debt discount as of September 30, 2018 and December 31, 2017 of $0 and $103, respectively, with imputed interest rate of 0% $ 3,425 $ 12,347 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (7.0% as of September 30, 2018) 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 September 30, 2018 and December 31, 2017 of $210 and $226, respectively, with discount based on imputed interest rate of 7.0% 8,697 8,872 Senior secured convertible promissory notes (“Secured December 2017 Convertible Note”) bearing interest at 10% per annum, interest and principal through the conversion date in February 2018, collateralized by substantially all of the Company’s assets, net of unamortized discount as of September 30, 2018 and December 31, 2017 of $0 and $510, respectively — 3,490 Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.8% annually) payable through the lenders direct collection of certain accounts receivable through May 2018, collateralized by substantially all of the Company’s personal property, net of unamortized debt discount as of September 30, 2018 and December 31, 2017 of $0 and $54, respectively, with an imputed interest rate of 29.2% 1,497 1,222 Senior secured promissory notes due to related parties (“August 2015 Senior Secured Promissory Notes”) bearing interest at 8% per annum, interest and principal payable at maturity (December 31, 2022), collateralized by substantially all of the Company’s assets, net of unamortized discount as of September 30, 2018 and December 31, 2017 of $0 and $2,178, respectively, with debt discount based on imputed interest rate of 0% (see Note 11 and 12) 7,300 37,822 Debt, including debt due to related parties 20,919 63,753 Less debt due to related parties (7,300 ) (37,822 ) Less current portion (1,737 ) (1,524 ) $ 11,882 $ 24,407 |
Schedule of Contractual Future Principal Payments | As of September 30, 2018, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties, are due as follows (in thousands): Period ended September, 2018 2018 $ 1,562 2019 265 2020 283 2021 305 2022 7,778 Thereafter 7,663 Total future principal payments 17,856 Interest payments included in debt balance (1) 3,275 $ 21,131 (1) Due to the debt extinguishment requirement, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt, as further discussed in Notes 11 and 12. |
Reconciliation of Interest Expense for Debt Outstanding | The following is a reconciliation of interest expense for the debt outstanding during the three and nine months ended (in thousands). SEPTEMBER 30, 2018 Interest Expense Related Party, Net Non cash Three Months October 2012 and April 2013 Secured Promissory Notes $ — $ — $ — June 2014 Secured Promissory Note 166 — 5 Secured December 2017 Convertible Note (1) — — — LSQ Financing 56 — — August 2015 Senior Secured Promissory Notes — — — ASC 606 Financing Component (2) 78 — 78 $ 300 $ — $ 83 SEPTEMBER 30, 2017 Interest Expense Related Party, Net Non cash Three Months October 2012 and April 2013 Secured Promissory Notes $ 482 $ — $ 46 June 2014 Secured Promissory Note 148 — 7 Secured December 2017 Convertible Note (1) — 1,098 291 LSQ Financing 108 — 54 August 2015 Senior Secured Promissory Notes — — — ASC 606 Financing Component (2) — — — Capital leases and other 66 — — $ 804 $ 1,098 $ 398 SEPTEMBER 30, 2018 Interest Expense Related Party, Net Non cash Nine Months October 2012 and April 2013 Secured Promissory Notes $ 213 $ — $ 42 June 2014 Secured Promissory Note 474 — 16 Secured December 2017 Convertible Note (1) 529 — 322 LSQ Financing 306 — 57 August 2015 Senior Secured Promissory Notes — 451 133 ASC 606 Financing Component (2) 237 — 237 $ 1,759 $ 451 $ 807 SEPTEMBER 30, 2017 Interest Expense Related Party, Net Non cash Nine Months October 2012 and April 2013 Secured Promissory Notes $ 1,444 $ — $ 138 June 2014 Secured Promissory Note 424 — 17 Secured December 2017 Convertible Note (1) — — — LSQ Financing 336 — 108 August 2015 Senior Secured Promissory Notes — 3,257 867 ASC 606 Financing Component (2) — — — Capital leases and other 104 — — $ 2,308 $ 3,257 $ 1,130 (1) This agreement was terminated in February 2018 (2) The Company adopted ASC 606 on January 1, 2018. |
Schedule of Debt Conversion | The accounting for the change due to the Snyder Debt Conversion is as follows (in thousands): December 31, 2017 $ 12,347 Conversion of debt into equity (10,000 ) Change in discount, net 103 Future interest expense 975 September 30, 2018 $ 3,425 The accounting for the change due to the Secured December 2017 Convertible Note is as follows (in thousands): December 31, 2017 $ 3,490 Increase in debt 2,000 Conversion of debt into equity (6,000 ) Change in discount, net 510 September 30, 2018 $ - |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
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 September 30, 2018 (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 (November 2017 Warrants) June 2017 June 2027 80 $ 1.10 In connection with February 2018 Financing Transaction (February 2018 Warrants 1) February 2018 December 2020 43,350 $ 1.00 In connection with February 2018 Financing Transaction (February 2018 Warrants 2) February 2018 December 2020 5,065 $ 1.25 52,647 (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. |
Share-Based Plans (Tables)
Share-Based Plans (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Restricted Stock Units Activity | The following table summarizes the activity of restricted stock units from December 31, 2017 to September 30, 2018 (in thousands, except weighted average grant date fair value): WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Nonvested at December 31, 2017 335 $ 0.94 Granted 635 1.70 Vested (491 ) 1.18 Forfeited (46 ) 1.24 Nonvested at September 30, 2018 433 $ 1.37 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Schedule of Debt Conversion | The accounting for the change due to the Snyder Debt Conversion is as follows (in thousands): December 31, 2017 $ 12,347 Conversion of debt into equity (10,000 ) Change in discount, net 103 Future interest expense 975 September 30, 2018 $ 3,425 The accounting for the change due to the Secured December 2017 Convertible Note is as follows (in thousands): December 31, 2017 $ 3,490 Increase in debt 2,000 Conversion of debt into equity (6,000 ) Change in discount, net 510 September 30, 2018 $ - |
August 2015 Senior Secured Promissory Notes [Member] | |
Schedule of Debt Conversion | The accounting for the change due to the August 2015 Senior Secured Promissory Notes is as follows (in thousands): December 31, 2017 $ 37,822 Conversion of debt into equity (35,000 ) Change in discount, net 2,178 Accrued and future interest expense (1) 2,300 September 30, 2018 $ 7,300 (1) Includes reclassification of $598,000 in accrued interest to debt. |
Summary of Business, Basis of_2
Summary of Business, Basis of Presentation and Liquidity (Details Narrative) - USD ($) | Feb. 05, 2018 | Apr. 30, 2018 | Feb. 28, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 31, 2018 | Dec. 31, 2017 | Dec. 22, 2017 |
Date of incorporation | Jun. 15, 2006 | |||||||
Debt conversion amount | $ 6,000,000 | |||||||
Proceeds from offering | $ 13,804,000 | |||||||
Proceeds from issuance of common stock | $ 12,666,000 | $ 34,485,000 | 8,188,000 | |||||
Debt agreements financial and non-financial covenants | As of September 30, 2018, the Company had an accumulated deficit of $275,462,000, has incurred significant losses since inception and expects to continue to incur losses for the foreseeable future. The Company had funded operations primarily with net proceeds from public sales and private placements of equity and debt securities and from 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 September 30, 2018, the Company had working capital of $23,890,000, including cash and cash equivalents of $20,524,000. | |||||||
Accumulated deficit | $ 275,462,000 | $ 265,572,000 | ||||||
Working capital | 23,890,000 | |||||||
Cash and cash equivalents | 20,524,000 | $ 3,737,000 | 786,000 | |||||
Debt excluding related parties | 13,619,000 | |||||||
Debt due to related parties | 7,300,000 | 37,822,000 | ||||||
Restricted cash | 1,606,000 | |||||||
Cash on hand | 0 | |||||||
Securities Purchase Agreement [Member] | ||||||||
Number of shares issued during period | 70,514,000 | |||||||
Debt conversion amount | $ 51,000,000 | |||||||
Proceeds from offering | 24,000,000 | |||||||
Proceeds from issuance of debt | 21,819,000 | |||||||
Secured December 2017 Convertible Note [Member] | ||||||||
Debt conversion amount | $ 6,000,000 | 6,000,000 | $ 6,000,000 | |||||
Secured debt | 6,000,000 | |||||||
Long-term Senior Secured Debt [Member] | ||||||||
Secured debt | $ 45,000,000 | |||||||
October 2017 Through January 2018 [Member] | Secured December 2017 Convertible Note [Member] | ||||||||
Convertible promissory note | $ 2,000,000 | $ 4,000,000 | $ 6,000,000 | |||||
April 2018 [Member] | ||||||||
Number of shares issued during period | 8,366,250 | |||||||
Proceeds from offering | $ 13,804,000 | |||||||
Shares issued price per share | $ 1.65 | |||||||
Proceeds from issuance of common stock | $ 12,666,000 |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Number | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | |
Concentration risk, supplier | The active ingredient in the Company's Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently has one supplier of 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 maintains 6-12 months of knotweed extract 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 | ||||
Deferred cost of product revenues | $ 1 | $ 1 | $ 3,063 | ||
Deferred product revenue | 532 | 532 | $ 6,449 | ||
Research and development expenses | 2,381 | $ 2,890 | 6,898 | $ 7,881 | |
Patent expenses | 277 | 262 | 787 | 568 | |
Shipping and handling costs | 249 | 111 | 705 | 315 | |
Advertising costs | $ 192 | $ 80 | $ 794 | $ 284 | |
Operating segment | Number | 1 | ||||
Sales Revenue Net [Member] | Three Product [Member] | International [Member] | |||||
Customers accounted for percentage of company's total revenues | 95.00% | 87.00% | 93.00% | 87.00% | |
Sales Revenue Net [Member] | Customer Concentration Risk [Member] | International [Member] | |||||
Customers accounted for percentage of company's total revenues | 11.00% | 4.00% | 11.00% | 9.00% | |
Maximum [Member] | |||||
Receivables due period | 120 days |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Reconciliation of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 20,524 | $ 786 | $ 3,737 | |
Restricted cash, current portion | 46 | 487 | 933 | |
Restricted cash, less current portion | 1,560 | 1,560 | 1,560 | |
Total cash, cash equivalents and restricted cash | $ 22,130 | $ 2,833 | $ 6,230 | $ 12,613 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Significant Customer's Revenues and Account Receivable Percentage (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Customer A [Member] | Sales Revenue Net [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 31.00% | 16.00% | 22.00% | 4.00% | |
Customer A [Member] | Accounts Receivable [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 31.00% | 9.00% | |||
Customer B [Member] | Sales Revenue Net [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 19.00% | 20.00% | 20.00% | 25.00% | |
Customer B [Member] | Accounts Receivable [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 20.00% | 22.00% | |||
Customer C [Member] | Sales Revenue Net [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 13.00% | 7.00% | 12.00% | 9.00% | |
Customer C [Member] | Accounts Receivable [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 13.00% | 2.00% | |||
Customer D [Member] | Sales Revenue Net [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 6.00% | 10.00% | |||
Customer D [Member] | Accounts Receivable [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 0.00% | 16.00% | |||
Customer E [Member] | Accounts Receivable [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 2.00% | 11.00% | |||
Customer F [Member] | Accounts Receivable [Member] | |||||
Customers accounted for percentage of company's total revenues and accounts receivable | 0.00% | 11.00% |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Product revenues | $ 532 | $ 6,449 | |
Financing costs | [1] | 611 | |
License revenues | 1,845 | 1,790 | |
Deferred revenue | 2,988 | 8,239 | |
Less current portion | (356) | (6,193) | |
Deferred revenue | $ 2,632 | $ 2,046 | |
[1] | Financing costs relate to the implementation of ASC 606. Refer to the Company's revenue recognition policy in this note. |
Significant Accounting Polici_8
Significant Accounting Policies - Schedule of Condensed Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred cost of product revenues | $ 1 | $ 3,063 |
Deferred revenue, current portion | 356 | 6,193 |
Deferred revenue, less current portion | 2,632 | 2,046 |
Accrued liabilities | 5,933 | 8,189 |
Accumulated deficit | (275,462) | (265,572) |
January 1, 2018 [Member] | ||
Deferred cost of product revenues | 5 | |
Deferred revenue, current portion | 300 | |
Deferred revenue, less current portion | 2,570 | |
Accumulated deficit | (263,261) | |
Adjustments Due to ASC 606 [Member] | ||
Deferred cost of product revenues | (3,058) | |
Deferred revenue, current portion | (5,893) | |
Deferred revenue, less current portion | 524 | |
Accumulated deficit | $ 2,311 | |
Impact Due to ASC 606 [Member] | ||
Deferred cost of product revenues | 2,377 | |
Deferred revenue, current portion | 4,822 | |
Deferred revenue, less current portion | (611) | |
Accrued liabilities | ||
Accumulated deficit | (1,834) | |
As Reported Without Impact of ASC 606 [Member] | ||
Deferred cost of product revenues | 2,378 | |
Deferred revenue, current portion | 5,178 | |
Deferred revenue, less current portion | 2,021 | |
Accrued liabilities | 5,933 | |
Accumulated deficit | $ (277,296) |
Significant Accounting Polici_9
Significant Accounting Policies - Schedule of Condensed Financial Statements (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||||
Revenues | $ 5,425 | $ 4,219 | $ 15,501 | $ 14,849 | |||
Cost of product revenues | 2,803 | 2,492 | 8,075 | 8,737 | |||
Interest expense | (300) | (804) | (1,759) | (2,308) | |||
Net loss | (4,439) | [1] | (8,530) | (12,201) | [1] | (23,544) | |
Impact Due to ASC 606 [Member] | |||||||
Cost of product revenues | 455 | 681 | |||||
Interest expense | 72 | 231 | |||||
Net loss | [1] | 548 | 477 | ||||
Results Without Impact of ASC 606 [Member] | |||||||
Cost of product revenues | 3,258 | 8,756 | |||||
Interest expense | (228) | (1,528) | |||||
Net loss | [1] | (3,891) | (11,724) | ||||
Product [Member] | |||||||
Revenues | 5,310 | 4,161 | 15,171 | 14,675 | |||
Product [Member] | Impact Due to ASC 606 [Member] | |||||||
Revenues | 972 | 1,062 | |||||
Product [Member] | Results Without Impact of ASC 606 [Member] | |||||||
Revenues | 6,282 | 16,233 | |||||
License [Member] | |||||||
Revenues | 115 | $ 58 | 330 | $ 174 | |||
License [Member] | Impact Due to ASC 606 [Member] | |||||||
Revenues | (41) | (135) | |||||
License [Member] | Results Without Impact of ASC 606 [Member] | |||||||
Revenues | $ 74 | $ 195 | |||||
[1] | The impact in conjunction with the adoption of ASC 606 did not change the basic and diluted net loss per common share as reported. |
Significant Accounting Polic_10
Significant Accounting Policies - Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 60,901,000 | 8,102,000 |
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 | 7,179,000 | 3,198,000 |
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 | 52,647,000 | 4,232,000 |
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 | 1,075,000 | 672,000 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Derivative Liability Level 1 Valuation Hierarchy (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Derivative liability | $ 674 | |
Derivative Liability [Member] | ||
Derivative liability | 674 | |
Derivative Liability [Member] | Fair Value, Inputs, Level 1 [Member] | ||
Derivative liability | ||
Derivative Liability [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Derivative liability | ||
Derivative Liability [Member] | Fair Value, Inputs, Level 3 [Member] | ||
Derivative liability | $ 674 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Derivative Liability Measured at Fair Value Using Unobservable Inputs (Details) - Fair Value, Inputs, Level 3 [Member] - Derivative Liability [Member] $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Fair value at December 31, 2017 | $ 674 |
Derivative liability issued | 573 |
Change fair value of financial instruments | 5,177 |
Derivative liability extinguished | (6,424) |
Fair value at September 30, 2018 |
Fair Value Measurements - Sch_3
Fair Value Measurements - Schedule of Fair Value of Derivative Liability (Details) | Feb. 05, 2018 | Dec. 31, 2017 |
Fair Value Disclosures [Abstract] | ||
Stock Price volatility | 60.00% | 60.00% |
Risk-free rate | 1.46% | 1.28% |
Probability weighted term in years | 2 months 5 days | 5 months 1 day |
Inventories (Details Narratives
Inventories (Details Narratives) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Inventory reserve | $ 421 | $ 252 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw materials | $ 2,829 | $ 2,310 |
Work in progress | 2,026 | 2,441 |
Finished goods | 3,988 | 5,076 |
Inventories, total | $ 8,843 | $ 9,827 |
Accrued Liabilities (Details Na
Accrued Liabilities (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Payables and Accruals [Abstract] | ||
Warranty expense | $ 58 | $ 162 |
Warranty reserve | 89 | 287 |
Settlement of warrant | $ 22 | $ 29 |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 1,656 | $ 1,825 |
Accrued warranty costs | 402 | 556 |
Accrued legal costs | 284 | 1,558 |
Accrued customer incentives | 1,725 | 1,986 |
Accrued liabilities, other | 1,866 | 2,264 |
Accrued liabilities, total | $ 5,933 | $ 8,189 |
Accrued Liabilities - Schedul_2
Accrued Liabilities - Schedule of Changes in Accrued Warranty Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2018 | Sep. 30, 2018 | |
Payables and Accruals [Abstract] | ||
Beginning Balance | $ 556 | |
Warranties issued (released) during the period | (125) | |
Settlements made during the period | $ (22) | (29) |
Ending Balance | $ 402 | $ 402 |
Debt (Details Narrative)
Debt (Details Narrative) - USD ($) | Feb. 05, 2018 | Dec. 22, 2017 | Dec. 15, 2017 | Oct. 12, 2017 | Mar. 24, 2017 | Apr. 10, 2013 | Oct. 02, 2012 | Sep. 30, 2018 | Jun. 30, 2018 | Feb. 28, 2018 | Jun. 30, 2014 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Debt conversion amount | $ 6,000,000 | |||||||||||||||
Warrants to purchase common stock | 52,647,000 | 52,647,000 | 52,647,000 | |||||||||||||
Gain on extinguishment of debt | $ (303,000) | |||||||||||||||
Amount of debt, outstanding | $ 21,131,000 | 21,131,000 | 21,131,000 | |||||||||||||
Required deposit balance | 1,560,000 | 1,560,000 | 1,560,000 | 1,560,000 | 1,560,000 | $ 1,560,000 | ||||||||||
Restricted cash, current portion | $ 46,000 | 46,000 | $ 933,000 | 46,000 | $ 933,000 | 487,000 | ||||||||||
LSQ Funding Group L C [Member] | ||||||||||||||||
Debt instrument, maturity date | Jun. 30, 2019 | |||||||||||||||
Short term debt, outstanding | $ 1,497,000 | 1,497,000 | 1,497,000 | |||||||||||||
Sale of certain accounts receivable to third-party | $ 7,000,000 | |||||||||||||||
Advancement rate of receivables face value | 80.00% | |||||||||||||||
Invoice purchase fee percentage | 1.00% | |||||||||||||||
Additional monthly funds usage rate | 0.035% | |||||||||||||||
Automatic renewal receivable financing agreement duration | 1 year | |||||||||||||||
Maximum [Member] | ||||||||||||||||
Aging collection fee percentage | 0.00% | |||||||||||||||
Maximum [Member] | LSQ Funding Group L C [Member] | ||||||||||||||||
Invoice purchase fee percentage | 1.00% | |||||||||||||||
Additional monthly funds usage rate | 0.035% | |||||||||||||||
Minimum [Member] | ||||||||||||||||
Aging collection fee percentage | 0.35% | |||||||||||||||
Minimum [Member] | LSQ Funding Group L C [Member] | ||||||||||||||||
Invoice purchase fee percentage | 0.40% | |||||||||||||||
Additional monthly funds usage rate | 0.02% | |||||||||||||||
Securities Purchase Agreement [Member] | ||||||||||||||||
Debt conversion amount | $ 51,000,000 | |||||||||||||||
Secured Debt [Member] | ||||||||||||||||
Amount of debt, outstanding | 20,919,000 | 20,919,000 | $ 20,919,000 | $ 63,753,000 | ||||||||||||
Debt instrument description | The June 2014 Secured Promissory Note contains several restrictive covenants and the most significant of which requires the Company to maintain a debt to net worth ratio of no greater than 4.0 to 1.0 at all times | |||||||||||||||
Secured Convertible Debt [Member] | Securities Purchase Agreement [Member] | Dwight W. Anderson [Member] | ||||||||||||||||
Common stock price per share description | Company’s common stock at a rate of one share of common stock per $0.50. | |||||||||||||||
Conversion price per share | $ 0.50 | |||||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | ||||||||||||||||
Debt instrument, interest rate | 14.00% | |||||||||||||||
Debt conversion amount | $ 10,000,000 | |||||||||||||||
Conversion of debt, shares | 5,714,285 | |||||||||||||||
Warrants to purchase common stock | 1,142,856 | |||||||||||||||
Secured debt | 2,450,000 | 2,450,000 | $ 2,450,000 | |||||||||||||
Debt instrument, maturity date | Dec. 31, 2022 | |||||||||||||||
Gain on extinguishment of debt | 2,821,000 | |||||||||||||||
Amount of debt, outstanding | $ 3,425,000 | $ 3,425,000 | $ 3,425,000 | |||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Maximum [Member] | ||||||||||||||||
Debt instrument borrowing amount | $ 12,450,000 | |||||||||||||||
Debt instrument, interest rate | 14.00% | |||||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Minimum [Member] | ||||||||||||||||
Debt instrument borrowing amount | 7,500,000 | |||||||||||||||
Debt instrument, interest rate | 8.00% | |||||||||||||||
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] | Loan Agreement [Member] | Maximum [Member] | ||||||||||||||||
Debt instrument borrowing amount | $ 5,000,000 | |||||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Secured Debt [Member] | ||||||||||||||||
Debt instrument borrowing amount | $ 7,500,000 | |||||||||||||||
Secured Promissory Note Interest Rate at Prime Plus 2% Through June 2036 [Member] | Secured Debt [Member] | ||||||||||||||||
Debt instrument, prime rate | 2.00% | 2.00% | ||||||||||||||
Debt instrument borrowing amount | $ 10,000,000 | |||||||||||||||
Debt instrument, interest rate | 7.00% | 7.00% | 7.00% | |||||||||||||
Debt instrument, maturity date | Jun. 30, 2036 | |||||||||||||||
Amount of debt, outstanding | $ 8,697,000 | $ 8,697,000 | $ 8,697,000 | $ 8,872,000 | ||||||||||||
Required deposit balance | 1,560,000 | 1,560,000 | 1,560,000 | |||||||||||||
Restricted cash, current portion | 46,000 | 46,000 | 46,000 | |||||||||||||
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 | |||||||||||||||
Common stock price per share description | Company’s common stock at a rate of one share of common stock per $1.00 | |||||||||||||||
Conversion price per share | $ 1 | |||||||||||||||
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] | ||||||||||||||||
Debt conversion amount | $ 6,000,000 | 6,000,000 | 6,000,000 | |||||||||||||
Secured debt | $ 6,000,000 | |||||||||||||||
Gain on extinguishment of debt | $ 6,424,000 | |||||||||||||||
Amount of debt, outstanding | 3,490,000 | |||||||||||||||
Common stock price per share description | conversion of the outstanding balance at a rate of $0.50 per common share | |||||||||||||||
Conversion price per share | $ 0.50 | |||||||||||||||
Loss on induced conversion of debt | $ 9,867,000 | |||||||||||||||
Secured December 2017 Convertible Note [Member] | Dwight W. Anderson [Member] | ||||||||||||||||
Secured debt | $ 6,000,000 | |||||||||||||||
Debt instrument, maturity date | Oct. 12, 2020 | |||||||||||||||
Secured December 2017 Convertible Note [Member] | Maximum [Member] | Dwight W. Anderson [Member] | ||||||||||||||||
Secured debt | $ 6,000,000 | |||||||||||||||
Fair Value, Inputs, Level 3 [Member] | ||||||||||||||||
Fair value of debt | $ 12,296,000 | $ 12,296,000 | $ 12,296,000 | $ 21,133,000 | ||||||||||||
Current interest rate | 0.15 | |||||||||||||||
Debt instrument, prime rate | 7.00% | |||||||||||||||
Fair Value, Inputs, Level 3 [Member] | Variable Income Interest Rate [Member] | ||||||||||||||||
Current interest rate | 0.070 |
Debt - Schedule of Debt Includi
Debt - Schedule of Debt Including Debt to Related Parties (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Debt, including debt due to related parties | $ 21,131 | |
Less debt due to related parties | (7,300) | $ (37,822) |
Debt | 11,882 | 24,407 |
Secured Debt [Member] | ||
Debt, including debt due to related parties | 20,919 | 63,753 |
Less debt due to related parties | (7,300) | (37,822) |
Less current portion | (1,737) | (1,524) |
Debt | 11,882 | 24,407 |
Secured Debt [Member] | Secured Promissory Notes Interest Rate at 8.00% [Member] | ||
Debt, including debt due to related parties | 3,425 | 12,347 |
Secured Debt [Member] | Secured Promissory Note Interest Rate at Prime Plus 2% Through June 2036 [Member] | ||
Debt, including debt due to related parties | 8,697 | 8,872 |
Secured Debt [Member] | Secured Promissory Note Interest Rate at 10% Through February 2018 [Member] | ||
Debt, including debt due to related parties | 3,490 | |
Secured Debt [Member] | Secured Revolving Borrowing Interest Rate at 12.8% Through May 2018 [Member] | ||
Debt, including debt due to related parties | 1,497 | 1,222 |
Secured Debt [Member] | Senior Secured Promissory Note Interest Rate at 8% [Member] | ||
Debt, including debt due to related parties | $ 7,300 | $ 37,822 |
Debt - Schedule of Debt Inclu_2
Debt - Schedule of Debt Including Debt to Related Parties (Details) (Parenthetical) - Secured Debt [Member] - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Secured Promissory Notes Interest Rate at 8.00% [Member] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument, maturity date | Dec. 31, 2022 | Dec. 31, 2022 |
Unamortized debt discount | $ 0 | $ 103 |
Debt instrument, imputed interest rate | 0.00% | 0.00% |
Secured Promissory Note Interest Rate at Prime Plus 2% Through June 2036 [Member] | ||
Debt instrument, interest rate | 7.00% | |
Debt instrument, maturity date | Jun. 30, 2036 | |
Unamortized debt discount | $ 210 | $ 226 |
Debt instrument, imputed interest rate | 7.00% | 7.00% |
Debt instrument, payment terms | Payable monthly through June 2036 | Payable monthly through June 2036 |
Debt instrument, prime rate | 2.00% | 2.00% |
Secured Promissory Note Interest Rate at 10% Through February 2018 [Member] | ||
Debt instrument, interest rate | 10.00% | 10.00% |
Unamortized debt discount | $ 0 | $ 510 |
Debt instrument, payment terms | through the conversion date in February 2018 | through the conversion date in February 2018 |
Secured Revolving Borrowing Interest Rate at 12.8% Through May 2018 [Member] | ||
Debt instrument, interest rate | 12.80% | 12.80% |
Unamortized debt discount | $ 0 | $ 54 |
Debt instrument, imputed interest rate | 29.20% | 29.20% |
Debt instrument, payment terms | through May 2018 | through May 2018 |
Senior Secured Promissory Note Interest Rate at 8% [Member] | ||
Debt instrument, interest rate | 8.00% | 8.00% |
Debt instrument, maturity date | Dec. 31, 2022 | Dec. 31, 2022 |
Unamortized debt discount | $ 0 | $ 2,178 |
Debt instrument, imputed interest rate | 0.00% | 0.00% |
Debt - Schedule of Contractual
Debt - Schedule of Contractual Future Principal Payments (Details) $ in Thousands | Sep. 30, 2018USD ($) | |
Debt Disclosure [Abstract] | ||
2,018 | $ 1,562 | |
2,019 | 265 | |
2,020 | 283 | |
2,021 | 305 | |
2,022 | 7,778 | |
Thereafter | 7,663 | |
Total future principal payments | 17,856 | |
Interest payments included in debt balance | 3,275 | [1] |
Debt, including debt due to related parties | $ 21,131 | |
[1] | Due to the debt extinguishment requirement, the Company has included both accrued interest and future interest in the debt balance for certain outstanding debt as further discussed in Notes 11 and 12. |
Debt - Reconciliation of Intere
Debt - Reconciliation of Interest Expense for Debt Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Expense | $ 300 | $ 804 | $ 1,759 | $ 2,308 | |
Related Party | 1,098 | 451 | 3,257 | ||
Non cash | 83 | 398 | 807 | 1,130 | |
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | |||||
Expense | 482 | 213 | 1,444 | ||
Related Party | |||||
Non cash | 46 | 42 | 138 | ||
Secured Debt [Member] | June 2014 Secured Promissory Notes [Member] | |||||
Expense | 166 | 148 | 474 | 424 | |
Related Party | |||||
Non cash | 5 | 7 | 16 | 17 | |
Secured Debt [Member] | December 2017 Convertible Note [Member] | |||||
Expense | [1] | 529 | |||
Related Party | [1] | 1,098 | |||
Non cash | [1] | 291 | 322 | ||
Secured Debt [Member] | LSQ Financing [Member] | |||||
Expense | 56 | 108 | 306 | 336 | |
Related Party | |||||
Non cash | 54 | 57 | 108 | ||
Secured Debt [Member] | August 2015 Senior Secured Promissory Notes [Member] | |||||
Expense | |||||
Related Party | 451 | 3,257 | |||
Non cash | 133 | 867 | |||
Secured Debt [Member] | ASC 606 Financing Component [Member] | |||||
Expense | [2] | 78 | 237 | ||
Related Party | [2] | ||||
Non cash | [2] | $ 78 | $ 237 | ||
Secured Debt [Member] | Capital Leases and Other [Member] | |||||
Expense | 66 | 104 | |||
Related Party | |||||
Non cash | |||||
[1] | This agreement was terminated in February 2018 | ||||
[2] | The Company adopted ASC 606 on January 1, 2018. |
Debt - Schedule of Debt Convers
Debt - Schedule of Debt Conversion (Details) - USD ($) | Feb. 05, 2018 | Feb. 28, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Conversion of debt into equity | $ (6,000,000) | |||
Ending balance | 21,131,000 | |||
Snyder Debt Conversion [Member] | ||||
Beginning balance | 12,347,000 | |||
Conversion of debt into equity | (10,000,000) | |||
Change in discount, net | 103,000 | |||
Future interest expense | 975,000 | |||
Ending balance | 3,425,000 | |||
Secured December 2017 Convertible Note [Member] | ||||
Beginning balance | 3,490,000 | |||
Conversion of debt into equity | $ (6,000,000) | $ (6,000,000) | (6,000,000) | |
Change in discount, net | 510,000 | |||
Increase in debt | 2,000,000 | |||
Ending balance |
Warrants (Details Narrative)
Warrants (Details Narrative) | 9 Months Ended |
Sep. 30, 2018$ / shares | |
Warrants Details Narrative Abstract | |
Warrant weighted average remaining contractual life | 2 years 5 months 23 days |
Warrant exercise price | $ 1.10 |
Warrants - Summary of Informati
Warrants - Summary of Information about Common Stock Warrants Outstanding (Details) | 9 Months Ended | |
Sep. 30, 2018$ / sharesshares | ||
Class of Warrant or Right [Line Items] | ||
Number of shares subject to warrant issued | shares | 52,647,000 | |
Exercise price | $ / shares | $ 1.10 | |
June 2013 Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issue date | 2013-06 | |
Expiration date | 2023-06 | [1] |
Number of shares subject to warrant issued | shares | 27,000 | |
Exercise price | $ / shares | $ 8.40 | |
August 2015 Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issue date | 2015-08 | |
Expiration date | 2023-08 | |
Number of shares subject to warrant issued | shares | 4,000,000 | |
Exercise price | $ / shares | $ 1.91 | |
November 2016 Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issue date | 2016-11 | |
Expiration date | 2026-11 | |
Number of shares subject to warrant issued | shares | 125,000 | |
Exercise price | $ / shares | $ 2.38 | |
November 2017 Warrants [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issue date | 2017-06 | |
Expiration date | 2027-06 | |
Number of shares subject to warrant issued | shares | 80,000 | |
Exercise price | $ / shares | $ 1.10 | |
February 2018 Warrants 1 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issue date | 2018-02 | |
Expiration date | 2020-12 | |
Number of shares subject to warrant issued | shares | 43,350,000 | |
Exercise price | $ / shares | $ 1 | |
February 2018 Warrants 2 [Member] | ||
Class of Warrant or Right [Line Items] | ||
Issue date | 2018-02 | |
Expiration date | 2020-12 | |
Number of shares subject to warrant issued | shares | 5,065,000 | |
Exercise price | $ / shares | $ 1.25 | |
[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. |
Warrants - Summary of Informa_2
Warrants - Summary of Information about Common Stock Warrants Outstanding (Details) (Parenthetical) | Sep. 30, 2018 |
Warrants and Rights Note Disclosure [Abstract] | |
Subject to acquisition or sales percentage | 50.00% |
Share-Based Plans (Details Narr
Share-Based Plans (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||
Number of options outstanding | 7,179,000 | 7,179,000 | ||
Number of restricted stock units outstanding | 1,075,000 | 1,075,000 | ||
Number of shares available for grant | 6,249,000 | 6,249,000 | ||
Share based compensation expense recognized | $ 437 | $ 555 | $ 1,310 | $ 1,724 |
Number of option granted to purchase common stock | 39,000 | 29,000 | 4,509,000 | 85,000 |
Number of options weighted-average exercise price | $ 1.99 | $ 1.18 | $ 1.78 | $ 1.56 |
Option to purchase of shares | 53,000 | 56,000 | 14,000 | |
Purchase shares weighted-average exercise price | $ 1.17 | $ 1.21 | $ 1.17 | $ 1.21 |
Number of restricted stock units granted in lieu of incentive compensation | 0 | 105,000 | ||
Reclass from accrued liabilities to additional paid in capital | $ 205 | $ 205 |
Share-Based Plans - Summary of
Share-Based Plans - Summary of Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Shares outstanding, Beginning balance | shares | 335,000 |
Shares outstanding, Granted | shares | 635,000 |
Shares outstanding, Vested | shares | (491,000) |
Shares outstanding, Forfeited | shares | (46,000) |
Shares outstanding, Ending balance | shares | 433,000 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 0.94 |
Weighted average grant date fair value, Granted | $ / shares | 1.70 |
Weighted average grant date fair value, Vested | $ / shares | 1.18 |
Weighted average grant date fair value, Forfeited | $ / shares | 1.24 |
Weighted average grant date fair value, Ending balance | $ / shares | $ 1.37 |
Common Stock Offering (Details
Common Stock Offering (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended | |
Apr. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | |
Common Stock Offering | |||
Number of common stock under public offering | 8,366,250 | ||
Offering price per share | $ 1.65 | ||
Gross proceeds from offering | $ 13,804 | ||
Proceeds from issuance of common stock | $ 12,666 | $ 34,485 | $ 8,188 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) | Jan. 19, 2016USD ($)ft² | Feb. 28, 2018USD ($) | Apr. 30, 2014USD ($)ft² | Jun. 30, 2013USD ($)ft² |
Piper Jaffray, Inc. [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Litigation settlement | $ 2,000,000 | |||
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 | |||
Office and Laboratory Space One [Member] | ||||
Commitments And Contingencies [Line Items] | ||||
Office facility lease agreement | ft² | 27,300 | |||
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% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | Feb. 05, 2018 | Dec. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Aug. 20, 2015 |
Debt instrument principal amount, payable two years | $ 265 | $ 265 | ||||||
Debt instrument principal amount, payable three years | 283 | 283 | ||||||
Debt instrument principal amount, payable four years | 305 | 305 | ||||||
Debt due to related parties | $ 7,300 | $ 7,300 | $ 37,822 | |||||
Warrants to purchase common stock | 52,647,000 | 52,647,000 | ||||||
Gain on extinguishment of debt | $ (303) | |||||||
August 2015 Senior Secured Promissory Notes [Member] | ||||||||
Debt due to related parties | 7,300 | 7,300 | 37,822 | |||||
August 2015 Senior Secured Promissory Notes [Member] | ||||||||
Debt due to related parties | 7,300 | 7,300 | ||||||
Number of shares converted amount | $ 35,000 | |||||||
Number of shares converted | 20,000,000 | |||||||
Warrants to purchase common stock | 4,000,000 | |||||||
Principal remaining outstanding | $ 5,000 | 5,000 | 5,000 | |||||
Maturity date | Dec. 31, 2022 | |||||||
Gain on extinguishment of debt | 9,622 | |||||||
Beneficial Owner [Member] | ||||||||
Affiliate revenues percent | 5.00% | |||||||
Beneficial Owner [Member] | August 2015 Senior Secured Promissory Notes [Member] | ||||||||
Debt instrument to be issued, principal amount | $ 40,000 | |||||||
Debt instrument, interest rate | 8.00% | |||||||
Debt instrument, frequency of periodic payment of interest | semi-annually | |||||||
Debt instrument principal amount, payable two years | $ 10,000 | |||||||
Debt instrument principal amount, payable three years | 10,000 | |||||||
Debt instrument principal amount, payable four years | $ 20,000 | |||||||
Debt due to related parties | 7,300 | 7,300 | ||||||
Debt due to related parties, fair value | 4,028 | 4,028 | $ 21,714 | |||||
Minimum cash balance not required to maintain | $ 15,000 | $ 15,000 |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Debt Conversion (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Beginning balance | $ 37,822 | ||
Conversion of debt into equity | (6,000) | ||
Ending balance | 7,300 | ||
August 2015 Senior Secured Promissory Notes [Member] | |||
Beginning balance | 37,822 | ||
Conversion of debt into equity | (35,000) | ||
Change in discount, net | 2,178 | ||
Accrued and future interest expense | [1] | 2,300 | |
Ending balance | $ 7,300 | ||
[1] | Includes reclassification of $598,000 in accrued interest to debt. |
Related Party Transactions - _2
Related Party Transactions - Schedule of Debt Conversion (Details) (Parenthetical) $ in Thousands | Sep. 30, 2018USD ($) |
August 2015 Senior Secured Promissory Notes [Member] | |
Accrued interest | $ 598 |
Equity Offering and Related T_2
Equity Offering and Related Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 05, 2018 | Apr. 30, 2018 | Feb. 28, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 |
Warrant to purchase of common stock | 52,647,000 | 52,647,000 | |||||
Gross proceeds from common stock | $ 12,666 | $ 34,485 | $ 8,188 | ||||
Debt conversion amount | 6,000 | ||||||
Interest expenses | $ 300 | $ 804 | $ 1,759 | $ 2,308 | |||
Number of common stock under public offering | 8,366,250 | ||||||
Offering price per share | $ 1.65 | ||||||
Gross proceeds from offering | $ 13,804 | ||||||
Securities Purchase Agreement [Member] | |||||||
Number of common stock shares issued | 70,514,000 | ||||||
Debt conversion amount | $ 51,000 | ||||||
Value of financing transaction to common shares | $ 53,385 | ||||||
Warrant issued amount | 10,928 | ||||||
Gross proceeds from offering | $ 24,000 | ||||||
Securities Purchase Agreement [Member] | December 2017 Convertible Note [Member] | |||||||
Debt conversion amount | 6,000 | ||||||
Net proceeds from private placement | 27,300 | ||||||
Securities Purchase Agreement [Member] | October 2012 Secured Promissory Notes [Member] | |||||||
Debt conversion amount | 10,000 | ||||||
Securities Purchase Agreement [Member] | April 2013 Secured Promissory Notes [Member] | |||||||
Debt conversion amount | 10,000 | ||||||
Securities Purchase Agreement [Member] | Senior Secured Promissory Notes [Member] | |||||||
Debt conversion amount | $ 35,000 | ||||||
Private Placement [Member] | |||||||
Number of common stock shares issued | 70,514,000 | ||||||
Warrant to purchase of common stock | 48,493,000 | ||||||
Debt conversion amount | $ 2,180 | ||||||
Interest expenses | $ 2,700 | ||||||
Private Placement [Member] | Securities Purchase Agreement [Member] | |||||||
Number of common stock shares issued | 44,000,000 | ||||||
Warrant to purchase of common stock | 41,333,000 | ||||||
Gross proceeds from common stock | $ 30,000 | ||||||
Debt converted into shares | 25,714,000 | ||||||
Increase in Additional paid in capital | $ 64,312 | ||||||
Increase in common stock | $ 1 | ||||||
Private Placement [Member] | Debt Agreement Amendments [Member] | |||||||
Number of common stock shares issued | 25,714,000 | ||||||
Warrant to purchase of common stock | 5,143,000 | ||||||
Private Placement [Member] | Placement Agent Fee [Member] | |||||||
Number of common stock shares issued | 800,000 | ||||||
Warrant to purchase of common stock | 2,017,000 |