Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | MARRONE BIO INNOVATIONS INC | |
Entity Central Index Key | 0001441693 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 110,724,611 | |
Trading Symbol | MBII | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | |
Current assets: | |||
Cash and cash equivalents | $ 13,586 | $ 18,221 | |
Accounts receivable | 8,759 | 2,720 | |
Inventories, net | 7,554 | 8,224 | |
Prepaid expenses and other current assets | 1,310 | 971 | |
Total current assets | 31,209 | 30,136 | |
Property, plant and equipment, net | 14,132 | 14,512 | |
Right of use assets, net | 5,126 | ||
Restricted cash | 1,560 | 1,560 | |
Other assets | 356 | 359 | |
Total assets | 52,383 | 46,567 | |
Current liabilities: | |||
Accounts payable | 2,377 | 1,692 | |
Accrued liabilities | 7,015 | 6,871 | |
Deferred revenue, current portion | 379 | 438 | |
Lease liability, current portion | 752 | ||
Debt, current portion, net | 5,541 | 2,318 | |
Total current liabilities | 16,064 | 11,319 | |
Deferred revenue, less current portion | 2,327 | 2,399 | |
Lease liability, less current portion | 4,607 | ||
Debt, less current portion, net | 11,732 | 11,819 | |
Debt due to related parties | 7,300 | 7,300 | |
Other liabilities | 776 | 794 | |
Total liabilities | 42,806 | 33,631 | |
Commitments and contingencies (Note 10) | |||
Stockholders' equity: | |||
Preferred stock: $0.00001 par value; 20,000 shares authorized and no shares issued or outstanding at March 31, 2019 and December 31, 2018 | |||
Common stock: $0.00001 par value; 250,000 shares authorized, 110,691 shares issued and outstanding as of March 31, 2019 and December 31, 2018 | 1 | 1 | |
Additional paid in capital | 296,967 | 296,409 | |
Accumulated deficit | [1] | (287,391) | (283,474) |
Total stockholders' equity | 9,577 | 12,936 | |
Total liabilities and stockholders' equity | $ 52,383 | $ 46,567 | |
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
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 | 110,691,000 | 110,691,000 |
Common stock, shares outstanding | 110,691,000 | 110,691,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Revenues: | |||
Total revenues | $ 8,716 | $ 4,324 | |
Cost of product revenues | 3,729 | 2,242 | |
Gross profit | 4,987 | 2,082 | |
Operating Expenses: | |||
Research, development and patent | 2,942 | 2,535 | |
Selling, general and administrative | 5,674 | 5,030 | |
Total operating expenses | 8,616 | 7,565 | |
Loss from operations | (3,629) | (5,483) | |
Other income (expense): | |||
Interest expense | (306) | (1,119) | |
Interest expense, related parties | (434) | ||
Change in fair value of financial instruments | (5,177) | ||
Loss on extinguishment of debt, net | [1] | (2,196) | |
Gain on extinguishment of debt, related party | [1] | 9,183 | |
Other income (expense), net | 18 | (31) | |
Total other income (expense), net | (288) | 226 | |
Net loss | [1] | $ (3,917) | $ (5,257) |
Basic and diluted net loss per common share: | $ (0.04) | $ (0.07) | |
Weighted-average shares outstanding used in computing basic and diluted net loss per common share: | 110,691 | 74,591 | |
Product [Member] | |||
Revenues: | |||
Total revenues | $ 8,601 | $ 4,224 | |
License [Member] | |||
Revenues: | |||
Total revenues | $ 115 | $ 100 | |
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common Stock [Memeber] | Additional Paid In Capital [Member] | Accumulated Deficit [Member] | Total | ||
Balance at Dec. 31, 2017 | $ 214,921 | $ (265,572) | $ (50,651) | |||
Balance, shares at Dec. 31, 2017 | 31,351 | |||||
ASC 606 Adjustment | 2,311 | 2,311 | ||||
Net loss | [1] | (5,257) | (5,257) | |||
Settlement of restricted stock units | ||||||
Settlement of restricted stock units, shares | 228 | |||||
Issuance of RSUs for 2017 bonuses | 205 | 205 | ||||
Share-based compensation | 491 | 491 | ||||
Conversion of related party notes for common stock and warrants | 21,685 | 21,685 | ||||
Conversion of related party notes for common stock and warrants, shares | 20,000 | |||||
Conversion of secured promissory notes for common stock and warrants | 6,196 | 6,196 | ||||
Conversion of secured promissory notes for common stock and warrants, shares | 5,714 | |||||
Conversion of convertible notes for common stock and warrants | 16,843 | 16,843 | ||||
Conversion of convertible notes for common stock and warrants, shares | 12,000 | |||||
Fair value of common stock and warrants issued to placement agent in connection with private placement and note conversion | 1,610 | 1,610 | ||||
Fair value of common stock and warrants issued to placement agent in connection with private placement and note conversion, shares | 800 | |||||
Issuance of common stock and warrants in private placement, net of offering costs and underwriter commissions | $ 1 | 20,310 | 20,311 | |||
Issuance of common stock and warrants in private placement, net of offering costs and underwriter commissions, shares | 32,000 | |||||
Balance at Mar. 31, 2018 | $ 1 | 282,261 | (268,518) | 13,744 | ||
Balance, shares at Mar. 31, 2018 | 102,093 | |||||
Balance at Dec. 31, 2018 | $ 1 | 296,409 | (283,474) | 12,936 | ||
Balance, shares at Dec. 31, 2018 | 110,691 | |||||
Net loss | (3,917) | (3,917) | [1] | |||
Share-based compensation | 558 | 558 | ||||
Balance at Mar. 31, 2019 | $ 1 | $ 296,967 | $ (287,391) | $ 9,577 | ||
Balance, shares at Mar. 31, 2019 | 110,691 | |||||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | ||
Cash flows from operating activities | ||||
Net loss | [1] | $ (3,917) | $ (5,257) | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 455 | 478 | ||
Right of use assets amortization | 199 | |||
Share-based compensation | 558 | 491 | ||
Non-cash interest expense | 73 | 611 | ||
Change in fair value of financial instruments | 5,177 | |||
Loss on extinguishment of debt, net | [1] | 2,196 | ||
Gain on extinguishment of debt, related party, net | [1] | (9,183) | ||
Net changes in operating assets and liabilities: | ||||
Accounts receivable | (6,039) | (567) | ||
Inventories | 670 | (220) | ||
Prepaid Expenses and other assets | (336) | 146 | ||
Deferred cost of product revenues | 2 | |||
Accounts payable | 726 | (1,085) | ||
Accrued and other liabilities | 310 | (793) | ||
Accrued interest due to related parties | (1,614) | |||
Lease Liability | (150) | |||
Deferred revenue | (199) | (128) | ||
Net cash used in operating activities | (7,650) | (9,746) | ||
Cash flows from investing activities | ||||
Purchases of property, plant and equipment | (116) | (362) | ||
Net cash used in investing activities | (116) | (362) | ||
Cash flows from financing activities | ||||
Proceeds from issuance of common stock, net of offering costs | 21,820 | |||
Proceeds from issuance of debt | 2,000 | |||
Proceeds from secured borrowings | 6,714 | 3,520 | ||
Reductions in secured borrowings | (3,511) | (3,194) | ||
Repayment of debt | (72) | (67) | ||
Net cash provided by financing activities | 3,131 | 24,079 | ||
Net increase (decrease) in cash and cash equivalents and restricted cash | (4,635) | 13,971 | ||
Cash and cash equivalents and restricted cash, beginning of period | 19,781 | 2,833 | $ 2,833 | |
Cash and cash equivalents and restricted cash, end of period | 15,146 | 16,804 | $ 19,781 | |
Supplemental disclosure of cash flow information | ||||
Cash paid for interest | 223 | 2,145 | ||
Supplemental disclosure of non-cash investing and financing activities | ||||
Property, plant and equipment included in accounts payable and accrued liabilities | 10 | 200 | ||
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 above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Summary of Business, Basis of P
Summary of Business, Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Business, Basis of Presentation | 1. Summary of Business, Basis of Presentation 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. Going Concern, Liquidity, and Management Plans The accompanying condensed consolidated financial statements have been prepared under the assumption that the Company will continue to operate as a going concern, for the 12 months upon the issuance of these condensed consolidated financial statements, 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 is an early stage company with a limited operating history and has a limited number of commercialized products. As of March 31, 2019, the Company had an accumulated deficit of $287,391,000, 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 March 31, 2019, the Company had working capital of $15,145,000, including cash and cash equivalents of $13,586,000. In addition, as of March 31, 2019, the Company had debt and debt due to related parties of $17,273,000 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. As of March 31, 2019, the Company had a total of $1,560,000 of restricted cash relating to these debt agreements (see Note 6). The Company’s operating results, including historical prior periods of negative working capital, indicate that substantial doubt exists related to the Company’s ability to continue as a going concern for the next 12 months from the date of issuance of these condensed consolidated financial statements. However, the Company believes that its existing cash and cash equivalents of $10,899,000 at May 9, 2019 together with expected revenues, expected future debt or equity financings and cost management as well as cost reductions will be sufficient to fund operations as currently planned through one year from the date of the issuance of these condensed consolidated financial statements. The Company anticipates securing additional sources of through equity and/or debt financings, collaborative or other funding arrangements with partners, or through other sources of financing, consistent with historic results. The Company cannot predict, with certainty, the outcome of its actions to grow revenue, to manage or reduce costs or to secure additional financing from outside sources on terms acceptable to the Company or at all. 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. The actions discussed above cannot be considered probable of occurring and mitigating the substantial doubt raised by its operating results and satisfying its estimated liquidity needs for 12 months from the issuance of these consolidated financial statements. If the Company becomes unable to continue as a going concern, it may have to liquidate its assets, and stockholders may lose all or part of their investment in the Company’s common stock. |
Significant Accounting Policies
Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial information as of March 31, 2019, and for the three months ended March 31, 2019 and 2018, 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, 2018. In the opinion of management, the condensed consolidated financial statements as of March 31, 2019, and for the three months ended March 31, 2019 and 2018, 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 months ended March 31, 2019 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 assumptions and estimates associated with revenue recognition, including assumptions and estimates used in determining the timing and amount of revenue to recognize for those transactions with variable considerations, reserves for inventory obsolescence, share-based compensation, right-of-use, fair value of financial instruments, warrants and in its going concern analysis. 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 97% and 91% of the Company’s total revenues for the three months ended March 31, 2019 and 2018, respectively. Revenues generated from international customers were 7% and 18% for the three months ended March 31, 2019 and 2018, 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 Three months ended March 31, 2019 36 % 16 % 12 % 2018 14 % 23 % 6 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2019 or December 31, 2018, which may or may not correspond with the customers above, consist of the following: CUSTOMER CUSTOMER CUSTOMER CUSTOMER A B C D March 31, 2019 35 % 21 % 11 % 4 % December 31, 2018 52 % 8 % 3 % 24 % Concentrations of Supplier Dependence The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long-term business relationship with this supplier. The Company endeavors to keep 6 months of knotweed extract on hand at any given time, but an unexpected disruption in supply could have an effect on Regalia supply and revenues. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price. The Company continues to rely on third parties to formulate Grandevo and Zequanox into spray-dried powders, for all of its production of Venerate, Majestene/Zelto, Stargus/Amplitude and Haven, and from time to time, third-party manufacturers for supplemental production capacity to meet excess seasonal demand and for packaging. The Company’s products have been produced in quantities, and on timelines, sufficient to meet commercial demand and for the Company to satisfy its delivery schedules. However, the Company’s dependence upon others for the production of a portion of its products, or for a portion of the manufacturing process, particularly for drying and for all of its production of Venerate, may adversely affect its ability to satisfy demand and meet delivery obligations, as well as to develop and commercialize new products, on a timely and competitive basis. The Company has not entered into any long-term manufacturing or supply agreements for any of its products, and it may need to enter into additional agreements for the commercial development, manufacturing and sale of its products. There can be no assurance that it can do so on favorable terms, if at all. 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): MARCH 31, 2019 DECEMBER 31, 2018 Product revenues $ 398 $ 457 Financing costs 600 604 License revenues 1,708 1,776 2,706 2,837 Less current portion (379 ) (438 ) $ 2,327 $ 2,399 Revenue Recognition 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 March 31, 2019 and 2018, research and development expenses totaled $2,627,000 and $2,287,000, respectively, and patent expenses totaled $315,000 and $248,000, 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 March 31, 2019 and 2018 were $281,000 and $174,000, respectively. Advertising The Company expenses advertising costs as incurred. Advertising costs for the three months ended March 31, 2019 and 2018 were $191,000 and $206,000, 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): MARCH 31, 2019 2018 Stock options outstanding 6,965 5,343 Warrants to purchase common stock 52,647 52,725 Restricted stock units outstanding 1,217 931 Common shares to be issued in lieu of agent fees 498 498 61,327 59,497 Recently Adopted 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 lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted ASU 2016-02 in the first quarter of 2019 using the modified-retrospective method. This adoption primarily affected the Company’s condensed consolidated balance sheet based on the recording of Right-of-use assets and Lease liability, current and non-current for its operating leases. The adoption of ASU 2016-02, did not change the Company’s historical classification of these leases or the straight-line recognition of related expenses. See Note 4 for the effects of the adoption of ASU 2016-02 on the Company’s condensed consolidated financial statements as of January 1, 2019 and for the three months ended March 31, 2019. The adoption of this standard had a material impact on the Company’s condensed consolidated financial statements and is expected to continue to have a material impact for the foreseeable future. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 3. Inventories Inventories, net consist of the following (in thousands): MARCH 31, DECEMBER 31, 2019 2018 Raw materials $ 1,411 $ 1,844 Work in progress 1,058 1,580 Finished goods 5,085 4,800 $ 7,554 $ 8,224 As of March 31, 2019 and December 31, 2018, the Company had $526,000 and $579,000, respectively, in reserves against its inventories. |
Right-of-Use and Lease Liabilit
Right-of-Use and Lease Liability | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Right-of-Use and Lease Liability | 4. Right-Of-Use and Lease Liability On January 1, 2019, the Company adopted Accounting Standards Update No. 2016-02, “Leases (Topic 842)” (ASU 2016-02) using the modified retrospective transition method allowing it to apply the new standard at the adoption date and to recognize a cumulative-effect adjustment to the opening balance of retained earnings on the date of adoption. Under this transition method, the prior comparative period continues to be reported under the accounting standards in effect for that period. The Company elected to use the package of practical expedients permitted which allows (i) an entity not to reassess whether any expired or existing contracts are or contain leases; (ii) an entity need not reassess the lease classification for any expired or existing leases; and iii) an entity need not reassess any initial direct costs for any existing leases. The Company made an accounting policy election to adopt the short-term lease exception which allows the Company to not recognize on the balance sheet those leases with terms of 12 months or less resulting in short-term lease payments being recognized in the condensed consolidated statements of income on a straight-line basis over the lease term. All of the Company’s leases were previously classified as operating and are similarly classified as operating lease under the new standard. Adoption of the new standard resulted in recognition of both right-of-use assets and lease liabilities of approximately $5,324,000 and $5,510,000 as of January 1, 2019, respectively. As the right-of-use assets and lease liabilities were substantially the same at adoption, the Company did not record a cumulative effect adjustment to the opening balance of retained earnings. The Company’s operating leases have remaining terms ranging from less than one year to six years. The leases are for office space and various office equipment. The Company determines if an arrangement includes a lease at the inception of the agreement and the right-of-use asset and lease liability is determined at the lease commencement date and is based on the present value of estimated lease payments. The Company’s lease agreements contain both fixed and variable lease payments, none of which are based on a rate or an index. Fixed lease payments are included in the determination of the right-of-use asset and lease liability. Variable lease payments that are not based on a rate or index are expensed when incurred. The present value of estimated lease payments is determined utilizing the rate implicit in the lease agreement if that rate can be determined. If the implicit rate cannot be determined, the present value of estimated lease payments is determined utilizing the Company’s incremental borrowing rate. The incremental borrowing rate is determined at the lease commencement date and is estimated utilizing similar or collateralized borrowing instruments adjusted for the terms of leasing arrangement as necessary. Some of the leases include an option to renew that can extend the lease term. For those leases which are reasonably certain to be renewed, the Company included the renewal period in the lease term. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2019, the weighted average incremental borrowing rate and the weighted average remaining lease term for the operating leases held by the Company were 7.04% and 5.5 years, respectively. The components of lease expense were as follows: THREE MONTHS ENDED MARCH 31, 2019 (in thousands) Operating lease cost $ 297 Short-term lease cost 13 Sublease income (23 ) $ 287 Other information Cash paid for amounts included in the measurement of lease liabilities $ 222 Right-of-use assets obtained in exchange for operating lease liabilities $ 199 Maturities of lease liabilities for each future calendar year as of March 31, 2019 are as follows: OPERATING LEASES (in thousands) 2019, remaining 9 months $ 813 2020 1,182 2021 1,205 2022 1,241 2023 and beyond 2,036 Total lease payments 6,477 Less: imputed interest 1,118 Total lease obligation 5,359 Less lease obligation, current portion 752 Lease obligation, non-current portion $ 4,607 |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | 5. Accrued Liabilities Accrued liabilities consist of the following (in thousands): MARCH 31, DECEMBER 31, 2019 2018 Accrued compensation $ 2,726 $ 2,570 Accrued warranty costs 360 320 Accrued legal costs 315 69 Accrued customer incentives 2,432 2,170 Accrued liabilities, other 1,182 1,742 $ 7,015 $ 6,871 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 months ended March 31, 2019 and 2018, the Company recognized $94,000 and $44,000, respectively in warranty expense associated with product shipments for the period. This expense was reduced by $54,000 for the three months ended March 31, 2019 as a result of the historical usage of warranty reserves being lower than previously estimated and during the three months ended March 31, 2019 the Company settled no warranty claims. 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, 2018 $ 320 Warranties issued (released) during the period 40 Settlements made during the period - Balance at March 31, 2019 $ 360 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 6. Debt Debt, including debt due to related parties, consists of the following (in thousands): MARCH 31, DECEMBER 31, 2019 2018 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. $ 3,425 $ 3,425 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (7.5% as of March 31, 2019) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2019 and December 31, 2018 of $200 and $205. 8,572 8,639 Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.8% annually) payable through the lenders direct collection of certain accounts receivable through June 2019, collateralized by substantially all of the Company’s personal property. 5,276 2,073 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. 7,300 7,300 Debt, including debt due to related parties 24,573 21,437 Less debt due to related parties, non-current (7,300 ) (7,300 ) Less current portion (5,541 ) (2,318 ) Debt, non-current $ 11,732 $ 11,819 As of March 31, 2019, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties for each calendar year, are due as follows (in thousands): Period ended March 31, 2019 Debt Debt to Related Party 2019 $ 5,464 $ - 2020 270 - 2021 292 - 2022 2,766 5,000 2023 340 - Thereafter 7,365 - Total future principal payments 16,497 5,000 Interest payments included in debt balance (1) 975 2,300 $ 17,472 $ 7,300 (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. The following is a reconciliation of interest expense for the debt outstanding during the three months ended (in thousands). MARCH 31, 2019 Interest Three Months Expense Related Party, Net Non cash June 2014 Secured Promissory Note 158 — 5 LSQ Financing 76 — — ASC 606 Financing Component 68 — 68 Other 4 — — $ 306 $ — $ 73 MARCH 31, 2018 Interest Three Months Expense Related Party, Net Non cash October 2012 and April 2013 Secured Promissory Notes $ 213 $ — $ 42 June 2014 Secured Promissory Notes 152 — 6 Secured December 2017 Convertible Notes (1) 529 — 322 LSQ Financing 152 — 54 August 2015 Senior Secured Promissory Notes — 434 114 ASC 606 Financing Component 73 — 73 $ 1,119 $ 434 $ 611 (1) This agreement was terminated in February 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. 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 March 31, 2019. 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. 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 $3,015,000 for the three ended March 31, 2018 on partial extinguishment of the October 2012 and April 2013 Secured Promissory Notes, which included the recognition of the debt discount. 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 consolidated 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): Principal (pre-conversion) $ 12,450 Discount (pre-conversion) (134 ) Consideration of common stock and warrants provided at conversion (6,196 ) Gain on extinguishment (2,695 ) Principal and future interest at March 31, 2019 $ 3,425 Additionally, in conjunction with the terms of the October 2012 Secured Promissory Notes and the April 2013 Secured Promissory Notes, the Company agreed to pay a fee of 7% of the funded principal amount to the agent that facilitated the 2018 February Financing Transactions between the Company and the collective lenders. As part of the Snyder Debt Conversion, the Company renegotiated the Agent Fee, which resulted in 498,000 shares of the Company’s common stock being issuable to the agent in lieu of a cash payment for services. These shares are issuable at the Maturity Date of the note. The Company has included this liability in other non-current liabilities. The change in the value of the agent fee and the fair value of the common stock granted in lieu of cash was also included in the gain on partial extinguishment of debt as follows: Agent fee, included in other liabilities, long term (pre-conversion) $ 827 Gain on extinguishment (319 ) Agent fee payable in common shares $ 508 June 2014 Secured Promissory Note In June 2014, the Company borrowed $10,000,000 pursuant to a business loan agreement and promissory note (“June 2014 Secured Promissory Note”) with Five Star Bank that bears interest at 7.5% as of March 31, 2019. 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 $74,997 and adjusted from time-to-time as the interest rate changes, with the final payment due in June 2036. The Company is required to maintain a deposit balance with the Five Star Bank of $1,560,000, which is recorded as restricted cash included in non-current assets. Under this note the Company is required to maintain a current ratio of not less than 1.25-to-1.0, a debt-to-worth ratio of no greater than 4.0-to-1.0 and a loan-to-value ratio of no greater than 70% as determined by Five Star Bank. The Company is also required to comply with certain affirmative and negative covenants under the loan agreement discussed above. In the event of default on the debt, Five Star Bank may declare the entire unpaid principal and interest immediately due and payable. As of March 31, 2019, the Company was in compliance with each of these covenants except, potentially, a requirement that no material adverse situation shall have occurred, given the Company’s current going concern assessment and the requirement that her be no unapproved compensation increases for the Company’s executives for calendar year 2019. However, the Company has obtained a waiver from the lender for any non-compliance through November 15, 2020. The following table reflects the activity under this note: Principal balance, net at December 31, 2018 $ 8,639 Principal payments (225 ) Interest 153 Debt discount amortization 5 Principal balance, net at March 31, 2019 $ 8,572 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, was subject to Anderson’s approval and due on October 23, 2020 (the “Anderson Maturity Date”). 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”). Under the amendment, the Secured December 2017 ConvertibleNote became a secured promissory note and the maturity date was reverted to the original terms, due on October 12, 2020 (the “Maturity Date”). The interest rate and conversion terms of the Secured December 2017 Convertible Note remain unchanged from the terms of the October 2017 Convertible Note as described above. As of December 31, 2017, the outstanding principal balance under the Secured December Convertible Note was $4,000,000, exclusive of a $510,000 discount. In January 2018, the Company borrowed the remaining available principal under the Secured December 2017 Convertible Note of $2,000,000, exclusive of an additional derivative liability discount of $574,000. On February 5, 2018, the holder converted the entire outstanding principal of $6,000,000 under the Secured December 2017 Convertible Note into 12,000,000 each common stock and warrants units 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. Upon the conversion on February 5, 2018, the outstanding principal balance under the Secured December 2017 Convertible Note was reduced to zero. The Company accounted for the full conversion of the Secured December 2017 Convertible Note using the accounting guidance related to an induced debt conversion. Under the induced conversion guidance, the Company recognized a loss on conversion in the amount of $11,634,000 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 related to the fair value of the derivative liability on the date of conversion. The following table reflects the accounting for the activities under the Secured December 2017 Convertible Note as follows (in thousands): Principal (pre-conversion) $ 6,000 Discount (pre-conversion) (791 ) Consideration of common stock and warrants provided at conversion (16,843 ) Derivative liability extinguished 6,424 Loss on extinguishment 5,210 Balance at March 31, 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. Advances by LSQ may be made at an advance rate of up to 80% of the face value of the receivables being sold. Upon the sale of the receivable, the Company will not maintain servicing. LSQ may require the Company to repurchase accounts receivable if (i) the payment is disputed by the account debtor, with the purchaser being under no obligation to determine the bona fides of such dispute, (ii) the account debtor has become insolvent or (iii) upon the effective date of the termination of the LSQ Financing. LSQ will retain its security interest in any accounts repurchased from the Company. The Company will also pay to LSQ (i) an invoice purchase fee equal to 1% of the face amount of each purchased invoice, at the time of the purchase, and (ii) a funds usage fee equal to 0.035%, payable monthly in arrears. An aging and collection fee would be 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 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 June 2018, the Company amended the LSQ Financing arrangement which effectively (i) decreased the invoice purchase fee from 1.00% to a range of 0.40% to 1.00%, (ii) decreased the funds usage fee from 0.035% to a range of 0.020% to 0.035% and (iii) extended the terms of the agreement to June 30, 2019. As of March 31, 2019, $5,276,000 was outstanding under the LSQ Financing. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2019 | |
Warrants and Rights Note Disclosure [Abstract] | |
Warrants | 7. Warrants The following table summarizes information about the Company’s common stock warrants outstanding as of March 31, 2019 (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 March 31, 2019, no warrants have been exercised. The weighted average remaining contractual life and exercise price for these warrants is 1.98 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 | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Plans | 8. Share-Based Plans As of March 31, 2019, there were options to purchase 6,965,000 shares of common stock outstanding, 1,217,000 restricted stock units outstanding and 10,151,000 share-based awards available for grant under the outstanding equity incentive plans. For the three months ended March 31, 2019 and 2018, the Company recognized share-based compensation of $558,000 and $491,000, respectively. During the three months ended March 31, 2019 and 2018, the Company granted options to purchase 48,000 and 31,000 shares of common stock, respectively, at a weighted average exercise price of $1.59 and $1.87, respectively. During the three months ended March 31, 2019 and 2018 there were no options exercised. The following table summarizes the activity of stock options from December 31, 2018 to March 31, 2019 (in thousands, except weighted average exercise price): WEIGHTED- AVERAGE EXERCISE OPTIONS PRICE Balances at December 31, 2018 7,136 $ 3.31 Options granted 48 $ 1.59 Options exercised - $ - Options cancelled (219 ) $ 1.82 Balances at March 31, 2019 6,965 $ 3.34 The following table summarizes the activity of restricted stock units from December 31, 2018 to March 31, 2019 (in thousands, except weighted average grant date fair value): RESTRICTED UNITS OUTSTANDING Outstanding at December 31, 2018 1,146 Granted 71 Exercised — Forfeited — Outstanding at March 31, 2019 1,217 WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Non-vested at December 31, 2018 404 $ 1.40 Granted 71 $ 1.53 Vested (133 ) $ 1.42 Forfeited - $ - Non-vested at March 31, 2019 342 $ 1.42 During the three and months ended March 31, 2018, the Company granted 105,000 restricted stock units, respectively, in partial satisfaction of incentive compensation due to certain executives as of December 31, 2017. These grants resulted in the reclassification of $205,000 from accrued liabilities to additional paid in capital as of March 31, 2018. There were no such grants during the three months ended March 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. 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. In November 2018, the Company elected to exercise the first extension option under the lease, extending the lease term for another 60 months and an amended lease agreement was executed on April 25, 2019. The Company recognizes expense under its operating leases on a straight-line basis over the terms of the leases. As of March 31, 2019 and 2018, the Company incurred $287,000 and $151,000, respectively of rent expense, net. See Note 4 for future maturities of the Company’s operating lease commitments. 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. As of March 31, 2019, a trial date for the matter has been scheduled for July 2020. 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 | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 10. 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. In connection with the note, the Company incurred $302,000 in financing-related costs. These costs were recorded as deferred financing costs as a component of current and non-current other assets to amortized to interest expense over the term of the note. In connection with the August 2015 Senior Secured Promissory Notes, the Company issued warrants (“August 2015 Warrants”) to purchase 4,000,000 shares of common stock of the Company. The August 2015 Warrants are immediately exercisable at an exercise price of $1.91 per share and may be exercised at a holder’s option at any time on or before August 20, 2023 (subject to certain exceptions). The fair value of the August 2015 Warrants at the date of issuance of $4,610,000 was recorded as a discount to the August 2015 Senior Secured Promissory Notes as a component of non-current other liabilities and amortized to interest expense to related parties over the term of the arrangement. The August 2015 Senior Secured Promissory Notes provide for various events of default, including, among others, default in payment of principal or interest, breach of any representation or warranty by the Company or any subsidiary under any agreement or document delivered in connection with the notes, a continued breach of any other condition or obligation under any loan document, certain bankruptcy, liquidation, reorganization or change of control events, the acquisition by any person or persons acting as group, other than the lenders, of beneficial ownership of 40% or more of the outstanding voting stock of the Company and certain events in which Pamela G. Marrone, Ph.D. ceases to serve as the Company’s Chief Executive Officer. Upon an event of default, the entire principal and interest may be declared immediately due and payable. As of March 31, 2019, the Company was in compliance with its covenants under the August 2015 Senior Secured Promissory Notes. On February 5, 2018, the holders of the August 2015 Senior Secured Promissory Notes, pursuant to an amendment, 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 (See Note 6 for further discussion). In conjunction with the Waddell Debt Conversion, the Company accounted for the partial debt extinguishment under the troubled debt restructuring accounting guidance, including consideration for the treatment of the transaction as a gain given the terms of the agreement. The Company recognized a gain of $9,183,000, including $2,171,000 related to debt discount and other cost, on partial extinguishment of the August 2015 Senior Secured Promissory Notes as of December 31, 2018. 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): Principal (pre-conversion) $ 40,000 Accrued interest to be paid at maturity 339 Discount (pre-conversion) (2,171 ) Consideration of common stock and warrants provided at conversion (21,685 ) Gain on extinguishment (9,183 ) Principal and future interest at March 31, 2019 $ 7,300 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 11. Subsequent Events The Company has evaluated its subsequent events from March 31, 2019 through the date these condensed consolidated financial statements were issued, and has determined that there are no subsequent events required to be disclosed in these condensed consolidated financial statements. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial information as of March 31, 2019, and for the three months ended March 31, 2019 and 2018, 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, 2018. In the opinion of management, the condensed consolidated financial statements as of March 31, 2019, and for the three months ended March 31, 2019 and 2018, 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 months ended March 31, 2019 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 assumptions and estimates associated with revenue recognition, including assumptions and estimates used in determining the timing and amount of revenue to recognize for those transactions with variable considerations, reserves for inventory obsolescence, share-based compensation, right-of-use, fair value of financial instruments, warrants and in its going concern analysis. |
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 97% and 91% of the Company’s total revenues for the three months ended March 31, 2019 and 2018, respectively. Revenues generated from international customers were 7% and 18% for the three months ended March 31, 2019 and 2018, 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 Three months ended March 31, 2019 36 % 16 % 12 % 2018 14 % 23 % 6 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2019 or December 31, 2018, which may or may not correspond with the customers above, consist of the following: CUSTOMER CUSTOMER CUSTOMER CUSTOMER A B C D March 31, 2019 35 % 21 % 11 % 4 % December 31, 2018 52 % 8 % 3 % 24 % |
Concentrations of Supplier Dependence | Concentrations of Supplier Dependence The active ingredient in the Company’s Regalia product line is derived from the giant knotweed plant, which the Company obtains from China. The Company currently relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company’s manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long-term business relationship with this supplier. The Company endeavors to keep 6 months of knotweed extract on hand at any given time, but an unexpected disruption in supply could have an effect on Regalia supply and revenues. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price. The Company continues to rely on third parties to formulate Grandevo and Zequanox into spray-dried powders, for all of its production of Venerate, Majestene/Zelto, Stargus/Amplitude and Haven, and from time to time, third-party manufacturers for supplemental production capacity to meet excess seasonal demand and for packaging. The Company’s products have been produced in quantities, and on timelines, sufficient to meet commercial demand and for the Company to satisfy its delivery schedules. However, the Company’s dependence upon others for the production of a portion of its products, or for a portion of the manufacturing process, particularly for drying and for all of its production of Venerate, may adversely affect its ability to satisfy demand and meet delivery obligations, as well as to develop and commercialize new products, on a timely and competitive basis. The Company has not entered into any long-term manufacturing or supply agreements for any of its products, and it may need to enter into additional agreements for the commercial development, manufacturing and sale of its products. There can be no assurance that it can do so on favorable terms, if at all. |
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): MARCH 31, 2019 DECEMBER 31, 2018 Product revenues $ 398 $ 457 Financing costs 600 604 License revenues 1,708 1,776 2,706 2,837 Less current portion (379 ) (438 ) $ 2,327 $ 2,399 |
Revenue Recognition | Revenue Recognition 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 March 31, 2019 and 2018, research and development expenses totaled $2,627,000 and $2,287,000, respectively, and patent expenses totaled $315,000 and $248,000, 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 March 31, 2019 and 2018 were $281,000 and $174,000, respectively. |
Advertising | Advertising The Company expenses advertising costs as incurred. Advertising costs for the three months ended March 31, 2019 and 2018 were $191,000 and $206,000, 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): MARCH 31, 2019 2018 Stock options outstanding 6,965 5,343 Warrants to purchase common stock 52,647 52,725 Restricted stock units outstanding 1,217 931 Common shares to be issued in lieu of agent fees 498 498 61,327 59,497 |
Recently Adopted Accounting Pronouncements | Recently Adopted 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 lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The Company adopted ASU 2016-02 in the first quarter of 2019 using the modified-retrospective method. This adoption primarily affected the Company’s condensed consolidated balance sheet based on the recording of Right-of-use assets and Lease liability, current and non-current for its operating leases. The adoption of ASU 2016-02, did not change the Company’s historical classification of these leases or the straight-line recognition of related expenses. See Note 4 for the effects of the adoption of ASU 2016-02 on the Company’s condensed consolidated financial statements as of January 1, 2019 and for the three months ended March 31, 2019. The adoption of this standard had a material impact on the Company’s condensed consolidated financial statements and is expected to continue to have a material impact for the foreseeable future. |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
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 Three months ended March 31, 2019 36 % 16 % 12 % 2018 14 % 23 % 6 % Customers to which 10% or more of the Company’s outstanding accounts receivable are attributable as of either March 31, 2019 or December 31, 2018, which may or may not correspond with the customers above, consist of the following: CUSTOMER CUSTOMER CUSTOMER CUSTOMER A B C D March 31, 2019 35 % 21 % 11 % 4 % December 31, 2018 52 % 8 % 3 % 24 % |
Schedule of Deferred Revenue | The Company’s deferred revenue is broken out as follows (in thousands): MARCH 31, 2019 DECEMBER 31, 2018 Product revenues $ 398 $ 457 Financing costs 600 604 License revenues 1,708 1,776 2,706 2,837 Less current portion (379 ) (438 ) $ 2,327 $ 2,399 |
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): MARCH 31, 2019 2018 Stock options outstanding 6,965 5,343 Warrants to purchase common stock 52,647 52,725 Restricted stock units outstanding 1,217 931 Common shares to be issued in lieu of agent fees 498 498 61,327 59,497 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net consist of the following (in thousands): MARCH 31, DECEMBER 31, 2019 2018 Raw materials $ 1,411 $ 1,844 Work in progress 1,058 1,580 Finished goods 5,085 4,800 $ 7,554 $ 8,224 |
Right-of-Use and Lease Liabil_2
Right-of-Use and Lease Liability (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Components of Lease Expense | The components of lease expense were as follows: THREE MONTHS ENDED MARCH 31, 2019 (in thousands) Operating lease cost $ 297 Short-term lease cost 13 Sublease income (23 ) $ 287 Other information Cash paid for amounts included in the measurement of lease liabilities $ 222 Right-of-use assets obtained in exchange for operating lease liabilities $ 199 |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities for each future calendar year as of March 31, 2019 are as follows: OPERATING LEASES (in thousands) 2019, remaining 9 months $ 813 2020 1,182 2021 1,205 2022 1,241 2023 and beyond 2,036 Total lease payments 6,477 Less: imputed interest 1,118 Total lease obligation 5,359 Less lease obligation, current portion 752 Lease obligation, non-current portion $ 4,607 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following (in thousands): MARCH 31, DECEMBER 31, 2019 2018 Accrued compensation $ 2,726 $ 2,570 Accrued warranty costs 360 320 Accrued legal costs 315 69 Accrued customer incentives 2,432 2,170 Accrued liabilities, other 1,182 1,742 $ 7,015 $ 6,871 |
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, 2018 $ 320 Warranties issued (released) during the period 40 Settlements made during the period - Balance at March 31, 2019 $ 360 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Schedule of Debt Including Debt to Related Parties | Debt, including debt due to related parties, consists of the following (in thousands): MARCH 31, DECEMBER 31, 2019 2018 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. $ 3,425 $ 3,425 Secured promissory note (“June 2014 Secured Promissory Note”) bearing interest at prime plus 2% (7.5% as of March 31, 2019) per annum, payable monthly through June 2036, collateralized by certain of the Company’s deposit accounts and MMM LLC’s inventories, chattel paper, accounts, equipment and general intangibles, net of unamortized debt discount as of March 31, 2019 and December 31, 2018 of $200 and $205. 8,572 8,639 Secured revolving borrowing (“LSQ Financing”) bearing interest at (12.8% annually) payable through the lenders direct collection of certain accounts receivable through June 2019, collateralized by substantially all of the Company’s personal property. 5,276 2,073 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. 7,300 7,300 Debt, including debt due to related parties 24,573 21,437 Less debt due to related parties, non-current (7,300 ) (7,300 ) Less current portion (5,541 ) (2,318 ) Debt, non-current $ 11,732 $ 11,819 |
Schedule of Contractual Future Principal Payments | As of March 31, 2019, aggregate contractual future principal payments on the Company’s debt, including debt due to related parties for each calendar year, are due as follows (in thousands): Period ended March 31, 2019 Debt Debt to Related Party 2019 $ 5,464 $ - 2020 270 - 2021 292 - 2022 2,766 5,000 2023 340 - Thereafter 7,365 - Total future principal payments 16,497 5,000 Interest payments included in debt balance (1) 975 2,300 $ 17,472 $ 7,300 (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. |
Reconciliation of Interest Expense for Debt Outstanding | The following is a reconciliation of interest expense for the debt outstanding during the three months ended (in thousands). MARCH 31, 2019 Interest Three Months Expense Related Party, Net Non cash June 2014 Secured Promissory Note 158 — 5 LSQ Financing 76 — — ASC 606 Financing Component 68 — 68 Other 4 — — $ 306 $ — $ 73 MARCH 31, 2018 Interest Three Months Expense Related Party, Net Non cash October 2012 and April 2013 Secured Promissory Notes $ 213 $ — $ 42 June 2014 Secured Promissory Notes 152 — 6 Secured December 2017 Convertible Notes (1) 529 — 322 LSQ Financing 152 — 54 August 2015 Senior Secured Promissory Notes — 434 114 ASC 606 Financing Component 73 — 73 $ 1,119 $ 434 $ 611 (1) This agreement was terminated in February 2018 |
Schedule of Fair Value of Agent Fee | The change in the value of the agent fee and the fair value of the common stock granted in lieu of cash was also included in the gain on partial extinguishment of debt as follows: Agent fee, included in other liabilities, long term (pre-conversion) $ 827 Gain on extinguishment (319 ) Agent fee payable in common shares $ 508 |
Schedule of Debt Activity | The following table reflects the activity under this note: Principal balance, net at December 31, 2018 $ 8,639 Principal payments (225 ) Interest 153 Debt discount amortization 5 Principal balance, net at March 31, 2019 $ 8,572 |
Snyder Debt Conversion [Member] | |
Schedule of Debt Conversion | The accounting for the change due to the Snyder Debt Conversion is as follows (in thousands): Principal (pre-conversion) $ 12,450 Discount (pre-conversion) (134 ) Consideration of common stock and warrants provided at conversion (6,196 ) Gain on extinguishment (2,695 ) Principal and future interest at March 31, 2019 $ 3,425 |
Secured December 2017 Convertible Note [Member] | |
Schedule of Debt Conversion | The following table reflects the accounting for the activities under the Secured December 2017 Convertible Note as follows (in thousands): Principal (pre-conversion) $ 6,000 Discount (pre-conversion) (791 ) Consideration of common stock and warrants provided at conversion (16,843 ) Derivative liability extinguished 6,424 Loss on extinguishment 5,210 Balance at March 31, 2018 $ - |
Warrants (Tables)
Warrants (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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 March 31, 2019 (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) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Stock Options Activity | The following table summarizes the activity of stock options from December 31, 2018 to March 31, 2019 (in thousands, except weighted average exercise price): WEIGHTED- AVERAGE EXERCISE OPTIONS PRICE Balances at December 31, 2018 7,136 $ 3.31 Options granted 48 $ 1.59 Options exercised - $ - Options cancelled (219 ) $ 1.82 Balances at March 31, 2019 6,965 $ 3.34 |
Summary of Restricted Stock Units Activity | The following table summarizes the activity of restricted stock units from December 31, 2018 to March 31, 2019 (in thousands, except weighted average grant date fair value): RESTRICTED UNITS OUTSTANDING Outstanding at December 31, 2018 1,146 Granted 71 Exercised — Forfeited — Outstanding at March 31, 2019 1,217 |
Summary of Non-vested Restricted Stock Units Activity | WEIGHTED AVERAGE GRANT SHARES DATE FAIR OUTSTANDING VALUE Non-vested at December 31, 2018 404 $ 1.40 Granted 71 $ 1.53 Vested (133 ) $ 1.42 Forfeited - $ - Non-vested at March 31, 2019 342 $ 1.42 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
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): Principal (pre-conversion) $ 40,000 Accrued interest to be paid at maturity 339 Discount (pre-conversion) (2,171 ) Consideration of common stock and warrants provided at conversion (21,685 ) Gain on extinguishment (9,183 ) Principal and future interest at March 31, 2019 $ 7,300 |
Summary of Business, Basis of_2
Summary of Business, Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2018 | ||
Date of incorporation | Jun. 15, 2006 | ||
Accumulated deficit | [1] | $ 287,391 | $ 283,474 |
Working capital | 15,145 | ||
Cash and cash equivalents | 13,586 | 18,221 | |
Debt excluding related parties | 17,273 | ||
Debt due to related parties | 7,300 | $ 7,300 | |
Restricted cash | 1,560 | ||
May 9, 2019 [Member] | |||
Cash and cash equivalents | $ 10,899 | ||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Significant Accounting Polici_4
Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)Number | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
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 relies on one supplier for this plant. Such single supplier acquires raw knotweed from numerous regional sources and performs an extraction process on this plant, creating a dried extract that is shipped to the Company's manufacturing plant. While the Company does not have a long-term supply contract with this supplier, the Company does have a long-term business relationship with this supplier. The Company endeavors to keep 6 months of knotweed extract on hand at any given time, but an unexpected disruption in supply could have an effect on Regalia supply and revenues. Although the Company has identified additional sources of raw knotweed, there can be no assurance that the Company will continue to be able to obtain dried extract from China at a competitive price. | ||
Deferred cost of product revenues | $ 398 | ||
Financing revenues | 72 | $ 51 | |
Research and development expenses | 2,627 | $ 2,287 | |
Patent expenses | 315 | 248 | |
Shipping and handling costs | 281 | 174 | |
Advertising costs | $ 191 | $ 206 | |
Operating segment | Number | 1 | ||
Sales Revenue Net [Member] | International [Member] | |||
Customers accounted for percentage of company's total revenues | 7.00% | 18.00% | |
Sales Revenue Net [Member] | International [Member] | Three Product [Member] | |||
Customers accounted for percentage of company's total revenues | 97.00% | 91.00% | |
Maximum [Member] | |||
Receivables due period | 120 days |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Significant Customer's Revenues and Account Receivable Percentage (Details) - Customer Concentration Risk [Member] | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Customer A [Member] | Sales Revenue Net [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 36.00% | 14.00% | |
Customer A [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 35.00% | 52.00% | |
Customer B [Member] | Sales Revenue Net [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 16.00% | 23.00% | |
Customer B [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 21.00% | 8.00% | |
Customer C [Member] | Sales Revenue Net [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 12.00% | 6.00% | |
Customer C [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 11.00% | 3.00% | |
Customer D [Member] | Accounts Receivable [Member] | |||
Customers accounted for percentage of company's total revenues and accounts receivable | 4.00% | 24.00% |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounting Policies [Abstract] | ||
Product revenues | $ 398 | $ 457 |
Financing costs | 600 | 604 |
License revenues | 1,708 | 1,776 |
Deferred revenue | 2,706 | 2,837 |
Less current portion | (379) | (438) |
Deferred revenue, less current portion | $ 2,327 | $ 2,399 |
Significant Accounting Polici_7
Significant Accounting Policies - Schedule of Anti-dilutive Securities Excluded from Computation of Earnings Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 61,327,000 | 59,497,000 |
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 | 6,965,000 | 5,343,000 |
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 | 52,725,000 |
Restricted Stock Units Outstanding [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 1,217,000 | 931,000 |
Common Shares to be Issued in Lieu of Agent Fees [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of earning per share | 498,000 | 498,000 |
Inventories (Details Narrative)
Inventories (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Inventory reserve | $ 526 | $ 579 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,411 | $ 1,844 |
Work in progress | 1,058 | 1,580 |
Finished goods | 5,085 | 4,800 |
Inventories, total | $ 7,554 | $ 8,224 |
Right-of-Use and Lease Liabil_3
Right-of-Use and Lease Liability (Details Narrative) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
Right-of-use assets | $ 5,126 | $ 5,324 | |
Lease liabilities | $ 752 | $ 5,510 | |
Weighted average incremental borrowing rate | 7.04% | ||
weighted average remaining lease term | 5 years 6 months |
Right-of-Use and Lease Liabil_4
Right-of-Use and Lease Liability - Schedule of Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 297 |
Short-term lease cost | 13 |
Sublease income | (23) |
Total lease cost | 287 |
Cash paid for amounts included in the measurement of lease liabilities | 222 |
Right-of-use assets obtained in exchange for operating lease liabilities | $ 199 |
Right-of-Use and Lease Liabil_5
Right-of-Use and Lease Liability - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Leases [Abstract] | |||
2019, remaining 9 months | $ 813 | ||
2020 | 1,182 | ||
2021 | 1,205 | ||
2022 | 1,241 | ||
2023 and beyond | 2,036 | ||
Total lease payments | 6,477 | ||
Less: imputed interest | 1,118 | ||
Total lease obligation | 5,359 | ||
Less lease obligation, current portion | 752 | $ 5,510 | |
Lease obligation, non-current portion | $ 4,607 |
Accrued Liabilities (Details Na
Accrued Liabilities (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Payables and Accruals [Abstract] | ||
Warranty expense | $ 94 | $ 44 |
Warranty reserve | 54 | |
Settlement of warrant |
Accrued Liabilities - Schedule
Accrued Liabilities - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued compensation | $ 2,726 | $ 2,570 |
Accrued warranty costs | 360 | 320 |
Accrued legal costs | 315 | 69 |
Accrued customer incentives | 2,432 | 2,170 |
Accrued liabilities, other | 1,182 | 1,742 |
Accrued liabilities, total | $ 7,015 | $ 6,871 |
Accrued Liabilities - Schedul_2
Accrued Liabilities - Schedule of Changes in Accrued Warranty Costs (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Payables and Accruals [Abstract] | |
Beginning Balance | $ 320 |
Warranties issued (released) during the period | 40 |
Settlements made during the period | |
Ending Balance | $ 360 |
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 | Jun. 30, 2018 | Jun. 30, 2014 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 31, 2018 | Dec. 31, 2017 | |
Debt conversion amount | $ 6,000,000 | ||||||||||||||
Warrants to purchase of common stock | 52,647,000 | ||||||||||||||
Loss on extinguishment of debt, net | [1] | (2,196,000) | |||||||||||||
Amount of debt, outstanding | 17,472,000 | ||||||||||||||
Repayment of secured debt | 3,511,000 | 3,194,000 | |||||||||||||
Required deposit balance | 1,560,000 | $ 1,560,000 | |||||||||||||
LSQ Funding Group L.C [Member] | |||||||||||||||
Debt instrument description | The Company amended the LSQ Financing arrangement which effectively (i) decreased the invoice purchase fee from 1.00% to a range of 0.40% to 1.00%, ii) decreased the funds usage fee from 0.035% to a range of 0.020% to 0.035% and (iii) extended the terms of the agreement to June 30, 2019. | ||||||||||||||
Convertible promissory note | 5,276,000 | ||||||||||||||
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% | ||||||||||||||
Maximum [Member] | |||||||||||||||
Aging collection fee percentage | 0.35% | ||||||||||||||
Minimum [Member] | |||||||||||||||
Aging collection fee percentage | 0.00% | ||||||||||||||
Secured Debt [Member] | |||||||||||||||
Amount of debt, outstanding | $ 24,573,000 | $ 21,437,000 | |||||||||||||
Debt instrument description | The Company is required to maintain a current ratio of not less than 1.25-to-1.0, a debt-to-worth ratio of no greater than 4.0-to-1.0 and a loan-to-value ratio of no greater than 70% as determined by Five Star Bank. | ||||||||||||||
Secured Convertible Debt [Member] | Securities Purchase Agreement [Member] | Dwight W. Anderson [Member] | |||||||||||||||
Conversion price per share | $ 0.50 | ||||||||||||||
Common stock price per share description | Company's common stock at a rate of one share of common stock per $0.50. | ||||||||||||||
October 2012 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 Secured Promissory Notes [Member] | Loan Agreement [Member] | Maximum [Member] | |||||||||||||||
Debt instrument borrowing amount | $ 5,000,000 | ||||||||||||||
October 2012 Secured Promissory Notes [Member] | Secured Debt [Member] | |||||||||||||||
Debt instrument borrowing amount | $ 7,500,000 | ||||||||||||||
April 2013 Secured Promissory Notes [Member] | Maximum [Member] | |||||||||||||||
Debt instrument borrowing amount | 12,450,000 | ||||||||||||||
April 2013 Secured Promissory Notes [Member] | Minimum [Member] | |||||||||||||||
Debt instrument borrowing amount | $ 7,500,000 | ||||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | |||||||||||||||
Debt conversion amount | $ 10,000,000 | ||||||||||||||
Conversion of debt, shares | 5,714,285 | ||||||||||||||
Warrants to purchase of common stock | 1,142,856 | ||||||||||||||
Secured debt | $ 2,450,000 | ||||||||||||||
Debt instrument, maturity date | Dec. 31, 2022 | ||||||||||||||
Loss on extinguishment of debt, net | 319,000 | $ 3,015,000 | |||||||||||||
Amount of debt, outstanding | $ 3,425,000 | ||||||||||||||
Debt fee percentage | 7.00% | ||||||||||||||
Number of shares issued for services | 498,000 | ||||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Maximum [Member] | |||||||||||||||
Debt instrument, interest rate | 14.00% | ||||||||||||||
October 2012 and April 2013 Secured Promissory Notes [Member] | Minimum [Member] | |||||||||||||||
Debt instrument, interest rate | 8.00% | ||||||||||||||
June 2014 Secured Promissory Note [Member] | Secured Debt [Member] | |||||||||||||||
Debt instrument borrowing amount | $ 10,000,000 | ||||||||||||||
Debt instrument, maturity date | Jun. 30, 2036 | Jun. 30, 2036 | |||||||||||||
Debt instrument, interest rate | 7.50% | ||||||||||||||
Amount of debt, outstanding | $ 8,572,000 | $ 8,639,000 | |||||||||||||
Repayment of secured debt | 74,997 | ||||||||||||||
Required deposit balance | 1,560,000 | ||||||||||||||
Unamortized debt discount | $ 200,000 | $ 205,000 | |||||||||||||
June 2014 Secured Promissory Note [Member] | Secured Debt [Member] | Prime Rate [Member] | |||||||||||||||
Debt instrument, interest rate | 2.00% | ||||||||||||||
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 | ||||||||||||||
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 | ||||||||||||||
Conversion of debt, shares | 12,000,000 | ||||||||||||||
Secured debt | $ 2,000,000 | ||||||||||||||
Loss on extinguishment of debt, net | $ 6,424,000 | $ 5,210,000 | |||||||||||||
Conversion price per share | $ 0.50 | ||||||||||||||
Unamortized debt discount | $ 574,000 | ||||||||||||||
Loss on conversion of debt | $ 11,634,000 | ||||||||||||||
Secured December 2017 Convertible Note [Member] | Dwight W. Anderson [Member] | |||||||||||||||
Secured debt | $ 4,000,000 | ||||||||||||||
Debt instrument, maturity date | Oct. 12, 2020 | ||||||||||||||
Unamortized debt discount | $ 510,000 | ||||||||||||||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Debt - Schedule of Debt Includi
Debt - Schedule of Debt Including Debt to Related Parties (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt, including debt due to related parties | $ 17,472 | |
Less debt due to related parties, non-current | (7,300) | $ (7,300) |
Debt, non-current | 11,732 | 11,819 |
Secured Debt [Member] | ||
Debt, including debt due to related parties | 24,573 | 21,437 |
Less debt due to related parties, non-current | (7,300) | (7,300) |
Less current portion | (5,541) | (2,318) |
Debt, non-current | 11,732 | 11,819 |
Secured Debt [Member] | Secured Promissory Notes Interest Rate at 8.00% [Member] | ||
Debt, including debt due to related parties | 3,425 | 3,425 |
Secured Debt [Member] | June 2014 Secured Promissory Note [Member] | ||
Debt, including debt due to related parties | 8,572 | 8,639 |
Secured Debt [Member] | Secured Revolving Borrowing Interest Rate at 12.8% Through June 2019 [Member] | ||
Debt, including debt due to related parties | 5,276 | 2,073 |
Secured Debt [Member] | Senior Secured Promissory Note Interest Rate at 8% [Member] | ||
Debt, including debt due to related parties | $ 7,300 | $ 7,300 |
Debt - Schedule of Debt Inclu_2
Debt - Schedule of Debt Including Debt to Related Parties (Details) (Parenthetical) - Secured Debt [Member] - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
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 |
June 2014 Secured Promissory Note [Member] | ||
Debt instrument, interest rate | 7.50% | |
Debt instrument, maturity date | Jun. 30, 2036 | Jun. 30, 2036 |
Unamortized debt discount | $ 200 | $ 205 |
Debt instrument, payment terms | Payable monthly through June 2036 | Payable monthly through June 2036 |
Debt instrument, prime rate | 2.00% | 2.00% |
Secured Revolving Borrowing Interest Rate at 12.8% Through June 2019 [Member] | ||
Debt instrument, interest rate | 12.80% | 12.80% |
Debt instrument, payment terms | through June 2019 | through June 2019 |
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 |
Debt - Schedule of Contractual
Debt - Schedule of Contractual Future Principal Payments (Details) $ in Thousands | Mar. 31, 2019USD ($) | |
2019 | $ 5,464 | |
2020 | 270 | |
2021 | 292 | |
2022 | 2,766 | |
2023 | 340 | |
Thereafter | 7,365 | |
Total future principal payments | 16,497 | |
Interest payments included in debt balance | 975 | [1] |
Debt, including debt due to related parties | 17,472 | |
Related Party [Member] | ||
2019 | ||
2020 | ||
2021 | ||
2022 | 5,000 | |
2023 | ||
Thereafter | ||
Total future principal payments | 5,000 | |
Interest payments included in debt balance | 2,300 | [1] |
Debt, including debt due to related parties | $ 7,300 | |
[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. |
Debt - Reconciliation of Intere
Debt - Reconciliation of Interest Expense for Debt Outstanding (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Expense | $ 306 | $ 1,119 | |
Related Party, Net | 434 | ||
Non cash | 73 | 611 | |
Secured Debt [Member] | June 2014 Secured Promissory Notes [Member] | |||
Expense | 158 | 152 | |
Related Party, Net | |||
Non cash | 5 | 6 | |
Secured Debt [Member] | LSQ Financing [Member] | |||
Expense | 76 | 152 | |
Related Party, Net | |||
Non cash | 54 | ||
Secured Debt [Member] | ASC 606 Financing Component [Member] | |||
Expense | 68 | 73 | |
Related Party, Net | |||
Non cash | 68 | 73 | |
Secured Debt [Member] | Other [Member] | |||
Expense | 4 | ||
Related Party, Net | |||
Non cash | |||
Secured Debt [Member] | October 2012 and April 2013 Secured Promissory Notes [Member] | |||
Expense | 213 | ||
Related Party, Net | |||
Non cash | 42 | ||
Secured Debt [Member] | December 2017 Convertible Note [Member] | |||
Expense | [1] | 529 | |
Related Party, Net | [1] | ||
Non cash | [1] | 322 | |
Secured Debt [Member] | August 2015 Senior Secured Promissory Notes [Member] | |||
Expense | |||
Related Party, Net | 434 | ||
Non cash | $ 114 | ||
[1] | This agreement was terminated in February 2018 |
Debt - Schedule of Debt Convers
Debt - Schedule of Debt Conversion (Details) - USD ($) | Feb. 05, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Gain/loss on extinguishment | [1] | $ (2,196,000) | ||
Snyder Debt Conversion [Member] | ||||
Principal (pre-conversion) | 12,450,000 | |||
Discount (pre-conversion) | (134,000) | |||
Consideration of common stock and warrants provided at conversion | (6,196,000) | |||
Gain/loss on extinguishment | (2,695,000) | |||
Principal and future interest | 3,425,000 | |||
Secured December 2017 Convertible Note [Member] | ||||
Principal (pre-conversion) | 6,000,000 | |||
Discount (pre-conversion) | (791,000) | |||
Consideration of common stock and warrants provided at conversion | (16,843,000) | |||
Derivative liability extinguished | 6,424,000 | |||
Gain/loss on extinguishment | $ 6,424,000 | 5,210,000 | ||
Principal and future interest | ||||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Debt - Schedule of Fair value o
Debt - Schedule of Fair value of Agent Fee (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Gain on extinguishment | [1] | $ 2,196,000 | |
October 2012 and April 2013 Secured Promissory Notes [Member] | |||
Agent fee, included in other liabilities, long term (pre-conversion) | 827,000 | ||
Gain on extinguishment | (319,000) | $ (3,015,000) | |
Agent fee payable in common shares | $ 508,000 | ||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Debt - Schedule of Debt Activit
Debt - Schedule of Debt Activity (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Principal balance, net at Ending | $ 17,472 |
June 2014 Secured Promissory Notes [Member] | |
Principal balance, net at Beginning | 8,639 |
Principal payments | (225) |
Interest | 153 |
Debt discount amortization | 5 |
Principal balance, net at Ending | $ 8,572 |
Warrants (Details Narrative)
Warrants (Details Narrative) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Warrants and Rights Note Disclosure [Abstract] | |
Number of warrants exercised | shares | |
Warrant weighted average remaining contractual life | 1 year 11 months 23 days |
Warrant exercise price | $ / shares | $ 1.10 |
Warrants - Summary of Informati
Warrants - Summary of Information About Common Stock Warrants Outstanding (Details) | 3 Months Ended | |
Mar. 31, 2019$ / 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) | Mar. 31, 2019 |
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 | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Number of options outstanding | 6,965,000 | 7,136,000 | |
Number of restricted stock units outstanding | 1,217,000 | 1,146,000 | |
Number of shares available for grant | 10,151,000 | ||
Share based compensation expense | $ 558 | $ 491 | |
Number of option granted to purchase common stock | 48,000 | 31,000 | |
Number of options weighted-average exercise price granted | $ 1.59 | $ 1.87 | |
Number of restricted stock units granted | 71,000 | 105,000 | |
Reclass from accrued liabilities to additional paid in capital | $ 205,000 |
Share-Based Plans - Summary of
Share-Based Plans - Summary of Stock Options Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Number of Options, beginning balance | 7,136,000 | |
Number of Options granted | 48,000 | 31,000 |
Number of Options exercised | ||
Number of Options cancelled | (219,000) | |
Number of Options, ending balance | 6,965,000 | |
Weighted Average Exercise Price, beginning balance | $ 3.31 | |
Weighted Average Exercise Price, granted | 1.59 | $ 1.87 |
Weighted Average Exercise Price, exercised | ||
Weighted Average Exercise Price, cancelled | 1.82 | |
Weighted Average Exercise Price, ending balance | $ 3.34 |
Share-Based Plans - Summary o_2
Share-Based Plans - Summary of Restricted Stock Units Activity (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | ||
Restricted Units Outstanding, Beginning balance | 1,146,000 | |
Restricted Units Outstanding, Granted | 71,000 | 105,000 |
Restricted Units Outstanding, Exercised | ||
Restricted Units Outstanding, Forfeited | ||
Restricted Units Outstanding, Ending balance | 1,217,000 |
Share-Based Plans - Summary o_3
Share-Based Plans - Summary of Non- vested Restricted Stock Units Activity (Details) - Restricted Stock Units [Member] | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Shares outstanding, Beginning balance | shares | 404,000 |
Shares outstanding, Granted | shares | 71,000 |
Shares outstanding, Vested | shares | (133,000) |
Shares outstanding, Forfeited | shares | |
Shares outstanding, Ending balance | shares | 342,000 |
Weighted average grant date fair value, Beginning balance | $ / shares | $ 1.40 |
Weighted average grant date fair value, Granted | $ / shares | 1.53 |
Weighted average grant date fair value, Vested | $ / shares | 1.42 |
Weighted average grant date fair value, Forfeited | $ / shares | |
Weighted average grant date fair value, Ending balance | $ / shares | $ 1.42 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) $ in Thousands | Jan. 19, 2016USD ($)ft² | Feb. 28, 2018USD ($) | Apr. 30, 2014USD ($)ft² | Jun. 30, 2013USD ($)ft² | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Commitments And Contingencies [Line Items] | ||||||
Rental expense, net | $ 287 | $ 151 | ||||
Piper Jaffray, Inc. [Member] | ||||||
Commitments And Contingencies [Line Items] | ||||||
Plaintiff's litigation settlement demand | $ 2,000 | |||||
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 | |||||
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 | |||||
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 | |||||
Percentage of annual increase in base rent | 3.00% |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Feb. 05, 2018 | Aug. 20, 2015 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Warrants to purchase of common stock | 52,647,000 | |||||
Warrant exercise price per share | $ 1.10 | |||||
Gain/loss on extinguishment | [1] | $ (2,196) | ||||
Debt due to related parties | 7,300 | $ 7,300 | ||||
August 2015 Senior Secured Promissory Notes [Member] | ||||||
Debt instrument to be issued, principal amount | 40,000 | |||||
Unamortized debt discount | 2,171 | |||||
August 2015 Senior Secured Promissory Notes [Member] | ||||||
Warrants to purchase of common stock | 4,000,000 | |||||
Number of shares converted amount | $ 35,000 | |||||
Number of shares converted | 20,000,000 | |||||
Principal remaining outstanding | $ 5,000 | 5,000 | ||||
Maturity date | Dec. 31, 2022 | |||||
Gain/loss on extinguishment | 9,183 | |||||
Unamortized debt discount | $ 2,171 | |||||
Debt due to related parties | $ 7,300 | |||||
August 2015 Senior Secured Promissory Notes [Member] | August 2015 Warrants [Member] | ||||||
Affiliate revenues percent | 40.00% | |||||
Warrants to purchase of common stock | 4,000,000 | |||||
Warrant exercise price per share | $ 1.91 | |||||
Fair value of warrant | $ 4,610 | |||||
Beneficial Owner [Member] | ||||||
Affiliate revenues percent | 5.00% | |||||
Legal fees | $ 302 | |||||
Beneficial Owner [Member] | August 2015 Senior Secured Promissory Notes [Member] | ||||||
Debt instrument to be issued, principal amount | $ 40,000 | |||||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Debt Conversion (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | ||
Consideration of common stock and warrants provided at conversion | $ (21,685) | ||
Gain on extinguishment | [1] | $ (9,183) | |
August 2015 Senior Secured Promissory Notes [Member] | |||
Principal (pre-conversion) | 40,000 | ||
Accrued interest to be paid at maturity | 339 | ||
Discount (pre-conversion) | (2,171) | ||
Consideration of common stock and warrants provided at conversion | (21,685) | ||
Gain on extinguishment | (9,183) | ||
Principal and future interest | $ 7,300 | ||
[1] | The above includes revised numbers for the three months ended March 31, 2018 as disclosed in the Notes 16 to our accompanying Notes to Consolidated Financial Statements included in Part II-Item 8-"Financial Statements and Supplementary Data" of the Annual Report on Form 10-K filed on March 29, 2019. |