Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2015 | Aug. 01, 2015 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2015 | |
Document Fiscal Year Focus | 2,015 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | CAPN | |
Entity Registrant Name | Capnia, Inc. | |
Entity Central Index Key | 1,484,565 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 7,980,867 |
Condensed Balance Sheets
Condensed Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Current assets | ||
Cash and cash equivalents | $ 7,530 | $ 7,957 |
Accounts receivable | 12 | |
Restricted cash | 35 | 20 |
Inventory | 277 | 109 |
Prepaid expenses and other current assets | 311 | 252 |
Total current assets | 8,165 | 8,338 |
Long-term assets | ||
Property and equipment, net | 43 | 58 |
Patent | 562 | |
Total assets | 8,770 | 8,396 |
Current liabilities | ||
Accounts payable | 989 | 987 |
Accrued compensation and other current liabilities | 1,223 | 201 |
Common Stock Issuable | 112 | |
Series B warrant liability | 11,025 | |
Line of credit and accrued interest | 102 | |
Total current liabilities | 13,349 | 1,290 |
Long-term liabilities | ||
Total long-term liabilities | 3,053 | 18,296 |
Total liabilities | 16,402 | 19,586 |
Stockholders' deficit | ||
Common stock, $0.001 par value, 100,000,000 shares authorized at June 30, 2015 and December 31, 2014; 7,595,175 and 6,769,106 shares issued and outstanding at June 30, 2015 and December 31, 2014, respectively | 8 | 7 |
Additional paid-in-capital (see Note 4) | 72,469 | 59,141 |
Accumulated deficit (see Note 4) | (80,109) | (70,338) |
Total stockholders' deficit | (7,632) | (11,190) |
Total liabilities and stockholders' deficit | 8,770 | 8,396 |
Series A Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | 2,159 | 857 |
Series B Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | $ 17,439 | |
Series C Warrant Liability [Member] | ||
Long-term liabilities | ||
Warrant liability | $ 894 |
Condensed Balance Sheets (Paren
Condensed Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2015 | Dec. 31, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 7,595,175 | 6,769,106 |
Common stock, shares outstanding | 7,595,175 | 6,769,106 |
Condensed Statements of Operati
Condensed Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Income Statement [Abstract] | ||||
Government grant revenue | $ 65 | $ 65 | ||
Product revenue | 32 | 54 | ||
Total revenue | 97 | 119 | ||
Cost of product revenue | 22 | 40 | ||
Gross profit | 75 | 79 | ||
Expenses | ||||
Research and development | 1,181 | $ 549 | 2,059 | $ 921 |
Sales and marketing | 506 | 12 | 772 | 12 |
General and administrative | 1,432 | 746 | 2,718 | 1,058 |
Total expenses | 3,119 | 1,307 | 5,549 | 1,991 |
Operating loss | (3,044) | (1,307) | (5,470) | (1,991) |
Interest and other income (expense) | ||||
Interest expense, net | (670) | (1) | (1,058) | |
Change in fair value of warrants liabilities | 4,925 | (816) | (1,249) | (578) |
Inducement charge for Series C warrants | (3,050) | |||
Other income (expense), net | 4,925 | (1,486) | (4,300) | (1,636) |
Net income (loss) | $ 1,881 | $ (2,793) | $ (9,770) | $ (3,627) |
Net income (loss) per common share: | ||||
Basic | $ 0.25 | $ (5.21) | $ (1.35) | $ (6.77) |
Diluted | $ 0.25 | $ (5.21) | $ (1.35) | $ (6.77) |
Weighted-average common shares outstanding used to calculate net income (loss) per common share: | ||||
Basic | 7,517,794 | 535,685 | 7,243,164 | 535,685 |
Diluted | 7,630,644 | 535,685 | 7,243,164 | 535,685 |
Condensed Statements of Cash Fl
Condensed Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2015 | Jun. 30, 2014 | |
Cash flows from operating activities: | ||
Net loss | $ (9,770) | $ (3,627) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 31 | 14 |
Stock-based compensation expense | 602 | 16 |
Loss on disposition of property and equipment | 8 | |
Change in fair value of preferred stock warrants | 570 | |
Change in fair value of common stock warrants | 1,249 | |
Inducement charge for Series C warrants | 3,050 | |
Non-cash interest expense relating to warrants and convertible promissory notes | 1,058 | |
Change in operating assets and liabilities: | ||
Accounts receivable | (12) | 131 |
Inventories | (169) | |
Prepaid expenses and other assets | (59) | (100) |
Accounts payable | 401 | 218 |
Accrued liabilities | 617 | 46 |
Net cash used in operating activities | (4,060) | (1,666) |
Cash flows from investing activities: | ||
Proceeds from sale of property and equipment | 5 | |
Increase in restricted cash | (15) | |
Purchase of property and equipment | (16) | (4) |
Net cash (used in) provided by investing activities | (31) | 1 |
Cash flows from financing activities: | ||
Proceeds from exercise of common stock options | 294 | |
Proceeds from issuance of convertible notes payable | 1,749 | |
Initial public offering costs paid | (530) | (145) |
Repayment of credit line | (102) | |
Net cash provided by financing activities | 3,664 | 1,604 |
Net increase (decrease) in cash and cash equivalents | (427) | (61) |
Cash and cash equivalents, beginning of period | 7,957 | 1,269 |
Cash and cash equivalents, end of period | 7,530 | $ 1,208 |
Supplemental disclosures of noncash investing and financing information | ||
Patent costs included in Accrued liabilities | 450 | |
Stock issuable in consideration for Patent purchase | 112 | |
Reduction in initial public offering costs payable | 45 | |
Cashless exercise of 2010/2012 warrants | 13 | |
Series A Warrant Liability [Member] | ||
Cash flows from financing activities: | ||
Proceeds from exercise of warrants | 156 | |
Series A Warrant Liability [Member] | Cash Exercise [Member] | ||
Supplemental disclosures of noncash investing and financing information | ||
De-recognition warrant liability | 42 | |
Private Placement Series B Warrants [Member] | ||
Cash flows from financing activities: | ||
Proceeds from exercise of warrants | 3,832 | |
Other Series B Warrants [Member] | ||
Cash flows from financing activities: | ||
Proceeds from exercise of warrants | 189 | |
Series B Warrant Liability [Member] | ||
Cash flows from financing activities: | ||
Series B warrant transaction costs paid | (175) | |
Supplemental disclosures of noncash investing and financing information | ||
Warrant transaction costs included in accounts payable | 131 | |
De-recognition warrant liability | 1,700 | |
Series B Warrant Liability [Member] | Cash Exercise [Member] | ||
Supplemental disclosures of noncash investing and financing information | ||
De-recognition warrant liability | 6,748 | |
Series B Warrant Liability [Member] | Cash Less Exercise [Member] | ||
Supplemental disclosures of noncash investing and financing information | ||
De-recognition warrant liability | 1,724 | |
Series B Warrant Liability [Member] | Warrants contributed back to the Company [Member] | ||
Supplemental disclosures of noncash investing and financing information | ||
De-recognition warrant liability | $ 3 |
Description of Business
Description of Business | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Description of Business | Note 1. Description of Business Capnia, Inc. (the “Company”) was incorporated in the State of Delaware on August 25, 1999, and is located in Redwood City, California. The Company develops products and therapeutics based on its proprietary technology for precision metering of gas flow. On April 27, 2015, the Company established Capnia UK Limited, a wholly owned foreign subsidiary in the United Kingdom. There have been no significant activities for this entity during the three months ended June 30, 2015. The Company’s first diagnostic product, CoSense ® |
Liquidity, Financial Condition
Liquidity, Financial Condition and Management's Plans | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Liquidity, Financial Condition and Management's Plans | Note 2. Liquidity, Financial Condition and Management’s Plans The Company had net income of $1.9 million for the quarterly period ended June 30, 2015 and has an accumulated deficit of approximately $80.1 million from having incurred losses since its inception. The Company’s current period net income includes approximately $4.9 million of non-cash benefit relating to the decrease in the fair value of derivative liabilities. The Company has approximately $5.2 million of deficit in working capital at June 30, 2015 ($5.8 million of positive working capital when excluding the Series B warrant liability) and used approximately $4.1 million of cash in its operating activities during the six months ended June 30, 2015. The Company has financed its operations principally through issuances of debt and equity securities. The Company completed its initial public offering (“IPO”) on November 18, 2014 upon the issuance of 1,650,000 units, each of which consisted of one share of common stock, one Series A Warrant and one Series B Warrant, at an offering price of $6.50 per unit and received net proceeds of $8.0 million, after deducting underwriting discounts and commissions and IPO related expenses. The Series A Warrants are registered securities that are freely tradable on the NASDAQ. The Series B Warrants have variable settlement provisions (see Note 6). On March 5, 2015 the Company received approximately $3.8 million as a result of Series B Warrant holders exercising warrants to purchase shares of the Company’s Common Stock (the “Private Transaction”). In addition, on March 6, 2015 the Company received approximately $0.2 million as a result of Series A Warrant holders exercising warrants to purchase shares of the Company’s Common Stock. During the six months ended June 30, 2015 the Company received $0.3 million from the exercise of stock options. On July 24, 2015, the Company entered into a common stock purchase agreement with Aspire Capital Fund, LLC, which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million in value of shares of the Company’s common stock over the 24-month term of the purchase agreement (see Note 11). Management believes that the Company has sufficient capital resources to sustain operations through at least the next twelve months. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed balance sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly its financial position as of June 30, 2015 and results of its operations for the three and six months ended June 30, 2015 and 2014, and cash flows for the six months ended June 30, 2015 and 2014. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2014 included in the Company’s Form 10-K. Principles of Consolidation The consolidated financial statements have been prepared in accordance with GAAP and include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of deferred income tax assets and the valuation of debt and equity instruments and stock-based compensation. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents at two commercial banks that management believes are of high credit quality. Cash and cash equivalents deposited with these commercial banks exceeded the Federal Deposit Insurance Corporation insurable limit at June 30, 2015 and December 31, 2014. The Company expects this to continue. Cash and Cash Equivalents The Company considers all highly liquid investments, including its money market fund, purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents are held in institutions in the U.S. and include deposits in a money market fund which was unrestricted as to withdrawal or use. Inventory Inventory as of December 31, 2014 consisted of raw materials to be used in the manufacture of CoSense monitors and single-use Precision Sampling Sets. As of June 30, 2015, the Company’s inventory includes approximately $124,000 of raw material, $123,000 of work-in-process and $29,000 in finished goods. Inventory is stated at the lower of cost or market under the first-in, first-out (FIFO) method. Patent On June 30, 2015, the Company entered into an amendment of the BDDI Asset Purchase Agreement (the “BDDI Amending Agreement”), under which the Company committed to pay aggregate cash payments of $450,000 and issued 40,000 shares of common stock to an affiliate of BDDI. With respect to the aggregate cash payments of $450,000, the Company paid an affiliate of BDDI an initial sum of $150,000 on July 1, 2015, and is obligated to pay $100,000 on each of the six , twelve and eighteen-month anniversaries of the signing of the amended agreement. Under the original Asset Purchase Agreement dated June 11, 2010, the Company purchased a patent for Breath End Tidal Gas Monitor. The patent was issued on June 19, 2003 and expires on August 1, 2027. The Company has capitalized the fair value of the patent purchased as a long-term asset on its consolidated balance sheet, and is amortizing the fair value over the remaining useful life of the patent. Revenue Recognition The Company began recognizing sales of CoSense during the three months ended March 31, 2015. The Company recognizes revenue when all of the following criteria are met: • persuasive evidence of an arrangement exists; • the sales price is fixed or determinable; • collection of the relevant receivable is probable at the time of sale; and • delivery has occurred or services have been rendered. For a majority of sales, where the Company delivers its product to hospitals or medical facilities, the Company recognizes revenue upon delivery, which represents satisfaction of the required revenue recognition criteria. The Company does not offer rights of return or price protection and it has no post-delivery obligations. The Company has a limited one-year warranty to most customers. Estimated warranty obligations are recorded at the time of sale and to date, warranty costs have been insignificant. During the three months ended June 30, 2015, the Company began recognizing revenue related to a government grant awarded during the quarter. Government grants provide funds for certain types of expenditures in connection with research and development activities over a contractually defined period. Revenue related to government grants is recognized in the period during which the related costs are incurred and the related services are rendered, provided that the applicable performance obligations under the government grants have been met. Funds received under government grants are recorded as revenue if the Company is deemed to be the principal participant in the contract arrangements because the activities under the contracts are part of the Company’s development programs. If the Company is not the principal participant, the funds from government grants are recorded as a reduction to research and development expense. Funds received from government grants are not refundable and are recognized when the related qualified research and development expenses are incurred and when there is reasonable assurance that the funds will be received. Funds received in advance of the performance of the services are recorded as deferred revenue. Research and Development Research and development costs are charged to operations as incurred. Research and development costs consist primarily of salaries and benefits, consultant fees, prototype expenses, certain facility costs and other costs associated with clinical trials, net of reimbursed amounts. Research and development costs include costs of $65,000 incurred and reimbursed under the government grant awarded in the 3 months ended June 30, 2015. Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are expensed to research and development costs when incurred. Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of Series A, Series B, and Series C warrants to purchase common stock, do not satisfy the criteria for classification as equity instruments due to the existence of certain cash settlement features that are not within the sole control of the Company or variable settlement provision that cause them to not be indexed to the Company’s own stock. Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. In April 2015, the Financial Accounting Standards Board (FASB) issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. |
Revision of Prior Year Financia
Revision of Prior Year Financial Statements | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision of Prior Year Financial Statements | Note 4. Revision of Prior Year Financial Statements It was determined during the preparation of the first quarter 2015 interim financial statements that the Series A Warrant Agreement contained provisions that if, at any time while the Series A Warrants are outstanding, the Company enters into a “Fundamental Transaction” (as defined in the Series A Warrant Agreement), which includes, but is not limited to, a purchase offer, tender offer or exchange offer, a stock or share purchase agreement or other business combination including, without limitation, a reorganization, recapitalization, spin-off or other scheme of arrangement), then each registered holder of outstanding Series A Warrants as at any time prior to the consummation of the Fundamental Transaction, may elect and require the Company to purchase the Series A Warrants held by such person immediately prior to the consummation of such Fundamental Transaction by making a cash payment in an amount equal to the Black Scholes Value of the remaining unexercised portion of such registered holder’s Series A Warrants. The Company determined that upon issuance in November 2014 the Series A Warrants should have been classified as a liability, with any changes in the fair value of the warrants between November 2014 and December 31, 2014 being recorded in other income (expense) in the statement of operations. Management has evaluated the effect of the error and determined that it is immaterial to the Company’s financial position and results of operations for the year ended December 31, 2014 and, therefore, amendment of the previously filed annual report on Form 10-K is not considered necessary. However, if the adjustments to correct the cumulative errors had been recorded in the first quarter of 2015, management believes the impact would have been significant to the first quarter and would impact comparisons to prior periods. In accordance with guidelines issued in Staff Accounting Bulletin No. 108, the Company recorded adjustments in the current year’s beginning additional paid in capital, long term liabilities and accumulated deficit accounts to correct this error. The Company has also revised in this current Form 10-Q filing, and plan to revise in future filings of our Form 10-K, the previously reported annual financial statements for 2014 on Form 10-K for these amounts. The following table sets forth the revised prior period balances reported in the Company’s comparative financial statements as if adjustments had been made: (in thousands except per share data) Previously Adjustment Revised Balance sheet items at December 31, 2014: Current liabilities $ 1,290 $ — $ 1,290 Series A warrant liability — 857 857 Series B warrant liability 17,439 — 17,439 Total liabilities 18,729 857 19,586 Additional paid-in capital 60,636 (1,494 ) 59,141 Accumulated deficit (70,975 ) 637 (70,338 ) Total stockholders’ deficit (10,333 ) (857 ) (11,190 ) Liabilities and stockholders’ deficit $ 8,396 $ — $ 8,396 Statement of operations items for the year ended December 31, 2014 Other income (expense) $ (4,585 ) $ 637 $ (3,949 ) Net loss $ (13,875 ) $ 637 (13,238 ) Basic and diluted net loss per common share $ (10.92 ) $ 0.50 (10.42 ) |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | Note 5. Fair Value of Financial Instruments The carrying value of the Company’s cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued liabilities, approximate fair value due to the short-term nature of these items. Based on the borrowing rates currently available to the Company for debt with similar terms and consideration of default and credit risk, the carrying value of the line of credit approximates fair value. Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The fair value hierarchy defines a three-level valuation hierarchy for disclosure of fair value measurements as follows: • Level I Unadjusted quoted prices in active markets for identical assets or liabilities; • Level II Inputs other than quoted prices included within Level I that are observable, unadjusted quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities; and • Level III Unobservable inputs that are supported by little or no market activity for the related assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements at December 31, 2014 (revised) Total Level 1 Level 2 Level 3 Assets Money market fund $ 7,892 $ 7,892 $ — $ — Liabilities Series A warrant liability $ 857 $ 857 $ — $ — Series B warrant liability 17,439 — — 17,439 Total common stock warrant liability $ 18,296 $ 857 $ — $ 17,439 Fair Value Measurements at June 30, 2015 Total Level 1 Level 2 Level 3 Assets Money market fund $ 6,510 $ 6,510 $ — $ — Liabilities Series A warrant liability $ 2,159 $ 2,159 — — Series B warrant liability 11,025 — — 11,025 Series C warrant liability 894 — — 894 Total common stock warrant liability $ 14,078 $ 2,159 $ — $ 11,919 The Series A Warrant is a registered security that trades on the open market. The fair value of the Series A Warrant liability is based on the publicly quoted trading price of the warrants which are listed on and obtained from NASDAQ. Accordingly, the Series A Warrants are a Level 1 measurement. The fair value measurement of the Series B and Series C Warrants are based on significant inputs that are unobservable and thus represents a Level 3 measurement. The Company’s estimated fair value of the Series B Warrant liability is calculated using a Monte Carlo simulation. Key assumptions include the volatility of the Company’s stock, the expected warrant term, expected dividend yield and risk-free interest rates (see Note 6). The Company’s estimated fair value of the Series C Warrant liability is calculated using the Black-Scholes valuation model. Key assumptions include the volatility of the Company’s stock, the expected warrant term, expected dividend yield and risk-free interest rates (see Note 6). The Level 3 estimates are based, in part, on subjective assumptions. During the periods presented, the Company has not changed the manner in which it values liabilities that are measured at fair value using Level 3 inputs. The Company recognizes transfers between levels of the fair value hierarchy as of the end of the reporting period. There were no transfers within the hierarchy during the periods presented. The following table sets forth a summary of the changes in the fair value of the Company’s Level 1 and Level 3 financial instruments, which are treated as liabilities, as follows: Series A Warrant Series B Warrant Series C Warrant Number of Liability Number of Liability Number of Liability (in thousands) (in thousands) (in thousands) Balance at December 31, 2014 (revised) 2,449,605 $ 857 2,449,605 $ 17,439 — $ — Change in value of Series A Warrants — 1,344 — — — — De-recognition of Series A Warrant liability upon exercise (24,000 ) (42 ) — — — — De-recognition of Series B Warrant liability upon cash exercise of 589,510 warrants in Private Transaction (589,510 shares issued) — — (589,510 ) (6,430 ) — — De-recognition of Series B Warrant liability for other cash exercises of 29,097 warrants (29,097 shares issued) — — (29,097 ) (317 ) — — De-recognition of Series B Warrant liability upon cashless exercise of 216,330 warrants (86,207 shares issued) — — (216,330 ) (1,726 ) — — De-recognition of Series B Warrant liability upon contribution of 468 warrants back to the Company — — (468 ) (3 ) — — Change in value of Series B Warrants — — — 2,062 — — Record Series C Warrant Liability — — — — 589,510 3,050 Change in value of Series C Warrants — — — — — (2,156 ) Balance at June 30, 2015 2,425,605 $ 2,159 1,614,200 $ 11,025 589,510 $ 894 |
Warrant Liabilities
Warrant Liabilities | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Warrant Liabilities | Note 6. Warrant Liabilities Warrants terms The Company has issued Series A Warrants, Series B Warrants and Series C Warrants (the “Warrants”). The Company’s Series A, Series B, and Series C Warrants contain standard anti-dilution provisions for stock dividends, stock splits, subdivisions, combinations and similar types of recapitalization events. They also contain a cashless exercise feature that provides for their net share settlement at the option of the holder in the event that there is no effective registration statement covering the continuous offer and sale of the warrants and underlying shares. The Company is required to comply with certain requirement to cause or maintain the effectiveness of a registration statement for the offer and sale of these securities. The Warrant contracts further provide for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Warrant is convertible into in the event that the Company is unable to maintain the effectiveness of a registration statement as described herein. The Company evaluated the registration payment arrangement stipulated in the terms of these securities and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the IPO or Private Transaction proceeds to the registration payment arrangement. The Warrants also contain a fundamental transactions provision that permits their settlement in cash at fair value at the option of the holder upon the occurrence of a change in control. Such change in control events include tender offers or hostile takeovers, which are not within the sole control of the Company as the issuer of these warrants. Accordingly, the warrants are considered to have a cash settlement feature that precludes their classification as equity instruments. Settlement at fair value upon the occurrence of a fundamental transaction would be computed using the Black Scholes Option Pricing Model. Accounting Treatment The Company accounts for the Warrants in accordance with the guidance in ASC 815 Derivatives and Hedging Additionally, the terms of the Series B Warrants do not explicitly limit the potential number of shares, thereby the exercise of the Series B Warrants could result in the Company’s obligation to deliver a potentially unlimited number of shares upon settlement. As such, share settlement is not considered to be within the control of the Company. The Company classified the Series A, Series B, and C Warrants as liabilities at their fair value and will re-measure the warrants at each balance sheet date until they are exercised or expire. Any change in the fair value is recognized as other income (expense) in the Company’s statement of operations. Under ASC 815-40-35, the Company adopted a sequencing policy that reclassifies contracts, with the exception of stock options, from equity to assets or liabilities for those with the latest inception date first. Future issuance of securities will be evaluated as to reclassification as a liability under our sequencing policy of latest inception date first until either all of the Series B warrants are settled or expire. In accordance with the guidance under ASC 815-40-25, we have evaluated that we have a sufficient number of authorized and unissued shares as June 30, 2015, to settle all existing commitments. Series A Warrants The Company has issued 2,449,605 Series A Warrants to purchase shares of its Common Stock at an exercise price of $6.50 per share in connection with the IPO unit offering described in Note 2. The Series A Warrants are exercisable at any time prior to the expiration of the five-year term on November 12, 2019. Upon the completion of the IPO, the Series A warrants started trading on the NASDAQ under the symbol CAPNW. As the warrants are publicly traded, the Company uses the closing price on the measurement date to determine the fair value of these warrants. During the quarter ended March 31, 2015, a total of 24,000 Series A Warrants were exercised. As of June 30, 2015, the fair value of the 2,425,605 outstanding Series A warrants was approximately $2.2 million, and the decrease of $1.4 million in fair value during the three months ended June 30, 2015 was recorded as other income in the statement of operations. Series B Warrants The Company has issued 2,449,605 Series B Warrants to purchase shares of its Common Stock. In the event that the market price of the Company’s common stock falls below $6.50 at any time between March 12, 2015 and February 12, 2016 (expiration date), the Series B Warrants will become exercisable on a cashless basis for a number of common shares that increases as the market price of the Company’s common stock decreases, and exercisable at a discount to the tracking price of the common stock at the time. The result is an inverse relationship between the fair value of the shares and the number of shares issuable. As of December 31, 2014 and June 30, 2015 the Company used a Monte Carlo simulation to calculate the fair value of its Series B Warrant liability. This model is dependent upon several variables such as the warrant’s term, exercise price, current stock price, risk-free interest rate estimated over the contractual term, estimated volatility of our stock over the term of the warrant and the estimated market price of our stock during the cashless exercise period. The risk-free rate is based on U.S. Treasury securities with similar maturities as the expected terms of the warrants. The volatility is estimated based on blending the volatility rates for a number of similar publicly-traded companies. The Company used the following inputs: December 31, June 30, 2015 Volatility 87 % 90 % Expected Term (years) 1.1 0.62 Expected dividend yield 0.0 % 0.0 % Risk-free rate 0.26 % 0.26 % In addition to the assumptions above, the Company’s estimated fair value of the Series B Warrant liability is calculated using other key assumptions. Management, with the assistance of an independent valuation firm, makes these subjective determinations based on available current information; however, as such information changes, so might management’s determinations and such changes could have a material impact of future operating results. As of December 31, 2014 and June 30, 2015 the outstanding Series B Warrants and fair market values were: Number of Fair Value at Number of Fair Value at (in thousands) 2,449,605 $17,439 1,614,200 $11,025 The decrease in carrying amount of the Series B Warrants for the six months ended June 30, 2015 was $6.4 million, of which $1.9 million was attributed to the change in fair value of the warrant liability during three months ended June 30, 2015 and was recorded as other income in the statement of operations. During the three and six months ended June 30, 2015, certain holders of Series B Warrants cashless exercised a total of 164,075 and 216,330 warrants, respectively resulting in the issuance of 65,021 and 86,207 shares of common stock, respectively, and the derecognition of approximately $1.3 million and $1.7 million respectively in Series B Warrant liability which was recorded as additional paid-in capital. Series C Warrants On March 5, 2015, the Company entered into separate agreements with certain Series B Warrant holders, who agreed to exercise their Series B Warrants to purchase an aggregate of 589,510 shares of the Company’s common stock at an exercise price of $6.50 per share, resulting in the de-recognition of $6.4 million of Series B warrant liability and gross proceeds to the Company of approximately $3.8 million based on the exercise price of the Series B warrants. In connection with this exercise of the Series B Warrants, the Company issued to each investor who exercised Series B Warrants, new Series C Warrants for the number of shares of the Company’s Common Stock underlying the Series B Warrants that were exercised. Each Series C Warrant is exercisable at $6.25 per share and will expire on March 5, 2020. The new Series C Warrants are exercisable into 589,510 shares of the Company’s Common Stock. As of March 31, 2015 and June 30, 2015, the fair value of the Series C Warrants was determined to be $2.5 million and $0.9 million, respectively. The decline in the fair value of the warrants of $1.6 million in the second quarter was recorded as other income in the Statement of Operations. The Company has calculated the fair value of the Series C warrants using a Black-Scholes pricing model, which requires the input of highly subjective assumptions including the expected stock price volatility. The Company used the following inputs: March 5, June 30, Volatility 86 % 90 % Expected Term (years) 5.00 4.68 Expected dividend yield 0.0 % 0.0 % Risk-free rate 1.35 % 1.35 % In April 2015, the Company issued a tender offer to the remaining holders of Series B warrants to induce the holders to cash exercise the outstanding Series B warrants in exchange for new Series C Warrants with an exercise price of $6.25 per share that expire on March 4, 2020. The tender offer was extended to warrant holders under a registration statement filed with the Securities and Exchange Commission on Form S-4, which was declared effective on June 25, 2015 and is set to expire on July 24, 2015. As of June 30, 2015, no Series B warrants have been tendered under the offer of exchange. |
Credit Facility
Credit Facility | 6 Months Ended |
Jun. 30, 2015 | |
Text Block [Abstract] | |
Credit Facility | Note 7. Credit Facility On September 29, 2014, the Company established a line of credit in the amount of up to $0.1 million. The line of credit bears a fixed interest rate of 6.0% per annum simple interest. The line of credit has a two-year repayment term, with prepayment at the Company’s option with no penalty. The line of credit shall be payable out of cash received in the Company’s accounts receivable following their commencement of commercial sales. In October, 2014, the Company drew down the full amount of $0.1 million provided for by the line of credit. During the three months ended March 31, 2015, the Company repaid the outstanding amounts borrowed under the line of credit. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Facility Leases The Company leases its headquarters facility under a non-cancelable operating lease agreement which was set to expire in May 2015. On February 2, 2015, the Company signed an amendment to its lease agreement, extending the lease through June 2018. The amendment provides for monthly lease payments of $22,000 beginning in June 2015, with increases in the following two years. The Company entered into a new lease agreement on July 1, 2015 (see Note 11). Rent expense was $121,000 and $114,000 during the six months ended June 30, 2014 and 2015, respectively. Rent expense was $64,000 and $59,000 during the three months ended June 30, 2014 and 2015, respectively. Contingencies In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and provide for general indemnifications. The Company’s exposure under these agreements is unknown because it involves claims that may be made against the Company in the future, but have not yet been made. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. In 2010 the Company entered into an Asset Purchase Agreement (the “BDDI Asset Purchase Agreement”) with BioMedical Drug Development, Inc. (“BDDI”). Pursuant to the BDDI Asset Purchase Agreement, the Company made a payment of $150,000 for the acquisition of intellectual property which the Company used to develop its product, CoSense. As part of the terms of the agreement, the Company was contingently committed to make development and sales-related milestone payments of up to $200,000 under certain circumstances, as well as single-digit-percentage royalties relating to potential planned product sales of CoSense. During fiscal 2013 and 2014, the Company made no payments and incurred no liabilities in connection with the agreement, and there were no outstanding payments due as of December 31, 2014. On June 30, 2015, the Company entered into an amendment of the BDDI Asset Purchase Agreement (the “BDDI Amending Agreement”), under which the Company committed to pay aggregate cash payments of $450,000 and issued 40,000 shares of common stock to an affiliate of BDDI, valued at $112,000 based on closing price of the common stock on June 30, 2015. With respect to the aggregate cash payments of $450,000, the Company paid an affiliate of BDDI an initial sum of $150,000 on July 1, 2015, and is obligated to pay $100,000 on each of the six , twelve and eighteen-month anniversaries of the signing of the amended agreement. Under the original Asset Purchase Agreement dated June 11, 2010, the Company purchased a patent for Breath End Tidal Gas Monitor. The patent was issued on June 19, 2003 and expires on August 1, 2027. The Company has capitalized the fair value of the patent purchased as a long-term asset on its consolidated balance sheet, and is amortizing the fair value over the remaining useful life of the patent. |
Stockholders' Deficit
Stockholders' Deficit | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Stockholders' Deficit | Note 9. Stockholders’ Deficit Stock Option Plan The Company has adopted the 1999 Incentive Stock Plan, the 2010 Equity Incentive Plan, and the 2014 Equity Incentive Plan (together, the Plans). The 1999 Incentive Stock Plan expired in 2009, and the 2010 Equity Incentive Plan has been closed to new issuances. Therefore, the Company may issue options to purchase shares of common stock to employees, directors, and consultants only under the 2014 Equity Incentive Plan. Options granted under the 2014 Plan may be incentive stock options (“ISOs”) or nonqualified stock options (“NSOs”). ISOs may be granted only to Company employees and directors. NSOs may be granted to employees, directors, advisors, and consultants. The Board of Directors has the authority to determine to whom options will be granted, the number of options, the term, and the exercise price. Options are to be granted at an exercise price not less than fair value for an ISO or 85% of fair value for an NSO. For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price of an option will not be less than 110% of fair value. The vesting period is normally monthly over a period of four years from the vesting date. The contractual term of an option is no longer than five years for ISOs for which the grantee owns greater than 10% of the voting power of all classes of stock and no longer than ten years for all other options. Stock compensation expense was recognized as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2014 2015 2014 2015 Research and development $ — $ 23 $ 9 $ 72 Sales and marketing — 14 — 34 General and administrative 5 164 7 496 Total $ 5 $ 201 $ 16 $ 602 The following table summarizes stock option transactions as issued under the Plans: Options Number of Average Balances, December 31, 2014 606,061 1,072,011 $ 6.34 Authorized 270,764 Granted (798,013 ) 798,013 $ 3.16 Exercised — (83,848 ) $ 3.50 Forfeited 58,705 (58,705 ) $ 5.05 Balances, June 30, 2015 137,517 1,727,471 $ 5.05 Future stock-based compensation for unvested employee options granted and outstanding as of June 30, 2015 is approximately $1.7 million and is expected to be recognized over the remaining requisite service period of 3.5 years. The fair value of an equity award granted to a non-employee generally is determined in the same manner as an equity award granted to an employee. In most cases, the fair value of the equity securities granted is more reliably determinable than the fair value of the goods or services received. Stock-based compensation related to its grant of options to non-employees has not been material to date. 2014 Employee Stock Purchase Plan Our board of directors and stockholders have adopted the 2014 Employee Stock Purchase Plan, or the ESPP. The ESPP has become effective, and our board of directors will implement commencement of offers thereunder in its discretion. A total of 139,839 shares of our common stock has been made available for sale under the ESPP. In addition, our ESPP provides for annual increases in the number of shares available for issuance under the plan on the first day of each year beginning in the year following the initial date that our board of directors authorizes commencement, equal to the least of: • 1.0% of the outstanding shares of our common stock on the first day of such year; • 279,680 shares; or • such amount as determined by our board of directors. As of June 30, 2015 there were no purchases by employees under this plan. Common Stock Warrants As of June 30, 2015, the Company had 480,147 common stock warrants outstanding from the 2010/2012 convertible notes. During the first quarter of 2015, 43,720 common stock warrants were cashless exercised resulting in the issuance of 13,407 shares of the Company’s common stock. The Company also has outstanding 9,259 common stock warrants issued in 2009 and 82,500 common stock warrants issued to the underwriter in our IPO. |
Net loss per share
Net loss per share | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Net loss per share | Note 10. Net loss per share Basic net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock actually outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted-average number of common stock outstanding and dilutive potential common stock that would be issued upon the exercise of common stock warrants and options. For the three and six months ended June 30, 2014 and the six months ended June 30, 2015, the effect of issuing the potential common stock is anti-dilutive due to the net losses in those periods and the number of shares used to compute basic and diluted earnings per share are the same in each of those periods. The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share during the three and six months ended June 30, 2014 and 2015 (in thousands, except per share and share data): Three Months Ended June 30, Six Months Ended 2015 2014 2015 2014 Net income (loss) $ 1,881 $ (2,793 ) $ (9,770 ) $ (3,627 ) Weighted-average shares used in computing net income (loss) per common share : Basic 7,517,794 535,685 7,243,163 535,685 Diluted 7,630,644 535,685 7,243,163 535,685 Net income (loss) per share: Basic $ 0.25 $ (5.21 ) $ (1.35 ) $ (6.77 ) Diluted $ 0.25 $ (5.21 ) $ (1.35 ) $ (6.77 ) The following are shares of common stock that would be issued if all options and warrants were exercised, all convertible promissory notes converted to common stock, and all convertible preferred stock converted to common stock. The potential shares of common stock have not been included in the calculation of fully diluted shares outstanding, because the effect of including them would be anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Convertible preferred stock — 865,429 — 865,429 Warrants issued to 2010/2012 convertible note holders to purchase common stock — — 480,147 Stock issuable upon conversion of convertible notes — Adjustable — Adjustable Warrants to purchase preferred stock — Adjustable — Adjustable Options to purchase common stock 1,533,618 240,906 1,727,471 240,906 Warrants issued in 2009 to purchase common stock 9,259 9,259 9,259 9,259 Warrants issued to underwriter to purchase common stock 82,500 — 82,500 — Series A warrants to purchase common stock 2,425,605 — 2,425,605 — Series B warrants to purchase common stock 1,614,200 — 1,614,200 — Series C warrants to purchase common stock 589,510 — 589,510 — 6,284,692 1,115,784 6,928,712 1,115,784 Using the treasury stock method the following options and warrants were included in the calculation of fully diluted shares outstanding for the three months ended June 30, 2015: Three Months Ended June 30, 2015 2014 Warrants issued to 2010/2012 convertible note holders to purchase common stock 480,147 — Options to purchase common stock 193,853 — |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2015 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 11. Subsequent Events On July 1, 2015 the Company executed a new four year non-cancelable operating lease agreement for 8,171 square feet of office space for its headquarters facility. The lease agreement provides for monthly lease payments of $23,300 beginning in September of 2015, with increases in the following three years. An additional 5,265 square feet of office space will become part of the new lease agreement on March 1, 2016. On July 24, 2015, the Company entered into a common stock purchase agreement (the “Purchase Agreement”) with Aspire Capital Fund, LLC, an Illinois limited liability company (“Aspire Capital”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire Capital is committed to purchase up to an aggregate of $10.0 million in value of shares of the Company’s common stock over the 24-month term of the Purchase Agreement. Concurrently with entering into the Purchase Agreement, the Company also entered into a registration rights agreement with Aspire Capital, in which the Company agreed to file one or more registration statements, as permissible and necessary to register under the Securities Act of 1933, as amended, registering the sale of the shares of the Company’s common stock that have been and may be issued to Aspire Capital under the Purchase Agreement. Under the Purchase agreement, after the SEC has declared effective the registration statement referred to above, on any trading day selected by the Company, the Company has the right, in its sole discretion, to present Aspire Capital with a purchase notice, directing Aspire Capital (as principal) to purchase up to 75,000 shares of the Company’s common stock per business day, up to $10.0 million of the Company’s common stock Subsequent to June 30, 2015, certain shareholders cashless exercised 189,879 Series B Warrants, which resulted in the Company issuing 534,497 shares of Common Stock. Subsequent to June 30, 2015, certain Series B warrant holder(s) tendered their Series B Warrants under the tender offer, which resulted in the issuance of 905 shares of Capnia Common Stock, the issuance of 905 Series C Warrants and proceeds to the Company of $5,882. |
Summary of Significant Accoun17
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by GAAP for complete financial statements. The condensed balance sheet at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all disclosures, including notes, required by GAAP for complete financial statements. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly its financial position as of June 30, 2015 and results of its operations for the three and six months ended June 30, 2015 and 2014, and cash flows for the six months ended June 30, 2015 and 2014. The interim results are not necessarily indicative of the results for any future interim period or for the entire year. Certain prior period amounts have been reclassified to conform to current period presentation. The accompanying condensed consolidated financial statements and related financial information should be read in conjunction with the audited financial statements and the related notes thereto for the year ended December 31, 2014 included in the Company’s Form 10-K. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements have been prepared in accordance with GAAP and include the accounts of the Company and its wholly-owned subsidiary. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and reported amounts of expenses in the financial statements and accompanying notes. Actual results could differ from those estimates. Key estimates included in the financial statements include the valuation of deferred income tax assets and the valuation of debt and equity instruments and stock-based compensation. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents at two commercial banks that management believes are of high credit quality. Cash and cash equivalents deposited with these commercial banks exceeded the Federal Deposit Insurance Corporation insurable limit at June 30, 2015 and December 31, 2014. The Company expects this to continue. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments, including its money market fund, purchased with an original maturity of three months or less to be cash equivalents. The Company’s cash and cash equivalents are held in institutions in the U.S. and include deposits in a money market fund which was unrestricted as to withdrawal or use. |
Inventory | Inventory Inventory as of December 31, 2014 consisted of raw materials to be used in the manufacture of CoSense monitors and single-use Precision Sampling Sets. As of June 30, 2015, the Company’s inventory includes approximately $124,000 of raw material, $123,000 of work-in-process and $29,000 in finished goods. Inventory is stated at the lower of cost or market under the first-in, first-out (FIFO) method. |
Patent | Patent On June 30, 2015, the Company entered into an amendment of the BDDI Asset Purchase Agreement (the “BDDI Amending Agreement”), under which the Company committed to pay aggregate cash payments of $450,000 and issued 40,000 shares of common stock to an affiliate of BDDI. With respect to the aggregate cash payments of $450,000, the Company paid an affiliate of BDDI an initial sum of $150,000 on July 1, 2015, and is obligated to pay $100,000 on each of the six , twelve and eighteen-month anniversaries of the signing of the amended agreement. Under the original Asset Purchase Agreement dated June 11, 2010, the Company purchased a patent for Breath End Tidal Gas Monitor. The patent was issued on June 19, 2003 and expires on August 1, 2027. The Company has capitalized the fair value of the patent purchased as a long-term asset on its consolidated balance sheet, and is amortizing the fair value over the remaining useful life of the patent. |
Revenue Recognition | Revenue Recognition The Company began recognizing sales of CoSense during the three months ended March 31, 2015. The Company recognizes revenue when all of the following criteria are met: • persuasive evidence of an arrangement exists; • the sales price is fixed or determinable; • collection of the relevant receivable is probable at the time of sale; and • delivery has occurred or services have been rendered. For a majority of sales, where the Company delivers its product to hospitals or medical facilities, the Company recognizes revenue upon delivery, which represents satisfaction of the required revenue recognition criteria. The Company does not offer rights of return or price protection and it has no post-delivery obligations. The Company has a limited one-year warranty to most customers. Estimated warranty obligations are recorded at the time of sale and to date, warranty costs have been insignificant. During the three months ended June 30, 2015, the Company began recognizing revenue related to a government grant awarded during the quarter. Government grants provide funds for certain types of expenditures in connection with research and development activities over a contractually defined period. Revenue related to government grants is recognized in the period during which the related costs are incurred and the related services are rendered, provided that the applicable performance obligations under the government grants have been met. Funds received under government grants are recorded as revenue if the Company is deemed to be the principal participant in the contract arrangements because the activities under the contracts are part of the Company’s development programs. If the Company is not the principal participant, the funds from government grants are recorded as a reduction to research and development expense. Funds received from government grants are not refundable and are recognized when the related qualified research and development expenses are incurred and when there is reasonable assurance that the funds will be received. Funds received in advance of the performance of the services are recorded as deferred revenue. |
Research and Development | Research and Development Research and development costs are charged to operations as incurred. Research and development costs consist primarily of salaries and benefits, consultant fees, prototype expenses, certain facility costs and other costs associated with clinical trials, net of reimbursed amounts. Research and development costs include costs of $65,000 incurred and reimbursed under the government grant awarded in the 3 months ended June 30, 2015. Costs to acquire technologies to be used in research and development that have not reached technological feasibility and have no alternative future use are expensed to research and development costs when incurred. |
Common Stock Purchase Warrants and Other Derivative Financial Instruments | Common Stock Purchase Warrants and Other Derivative Financial Instruments The Company classifies common stock purchase warrants and other free standing derivative financial instruments as equity if the contracts (i) require physical settlement or net-share settlement or (ii) give the Company a choice of net-cash settlement or settlement in its own shares (physical settlement or net-share settlement). The Company classifies any contracts that (i) require net-cash settlement (including a requirement to net cash settle the contract if an event occurs and if that event is outside the control of the Company), (ii) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement), or (iii) contain reset provisions as either an asset or a liability. The Company assesses classification of its freestanding derivatives at each reporting date to determine whether a change in classification between assets and liabilities is required. The Company determined that certain freestanding derivatives, which principally consist of Series A, Series B, and Series C warrants to purchase common stock, do not satisfy the criteria for classification as equity instruments due to the existence of certain cash settlement features that are not within the sole control of the Company or variable settlement provision that cause them to not be indexed to the Company’s own stock. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, or FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s financial position or results of operations upon adoption. In April 2015, the Financial Accounting Standards Board (FASB) issued ASU No. 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers Revenue Recognition In June 2014, the FASB issued ASU No. 2014-12, Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. |
Revision of Prior Year Financ18
Revision of Prior Year Financial Statements (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Revised Prior Period Balances | The following table sets forth the revised prior period balances reported in the Company’s comparative financial statements as if adjustments had been made: (in thousands except per share data) Previously Adjustment Revised Balance sheet items at December 31, 2014: Current liabilities $ 1,290 $ — $ 1,290 Series A warrant liability — 857 857 Series B warrant liability 17,439 — 17,439 Total liabilities 18,729 857 19,586 Additional paid-in capital 60,636 (1,494 ) 59,141 Accumulated deficit (70,975 ) 637 (70,338 ) Total stockholders’ deficit (10,333 ) (857 ) (11,190 ) Liabilities and stockholders’ deficit $ 8,396 $ — $ 8,396 Statement of operations items for the year ended December 31, 2014 Other income (expense) $ (4,585 ) $ 637 $ (3,949 ) Net loss $ (13,875 ) $ 637 (13,238 ) Basic and diluted net loss per common share $ (10.92 ) $ 0.50 (10.42 ) |
Fair Value of Financial Instr19
Fair Value of Financial Instruments (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Fair Value Disclosures [Abstract] | |
Summary of Financial Instruments Measured at Fair Value on Recurring Basis | The following table sets forth the Company’s financial instruments that were measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands): Fair Value Measurements at December 31, 2014 (revised) Total Level 1 Level 2 Level 3 Assets Money market fund $ 7,892 $ 7,892 $ — $ — Liabilities Series A warrant liability $ 857 $ 857 $ — $ — Series B warrant liability 17,439 — — 17,439 Total common stock warrant liability $ 18,296 $ 857 $ — $ 17,439 Fair Value Measurements at June 30, 2015 Total Level 1 Level 2 Level 3 Assets Money market fund $ 6,510 $ 6,510 $ — $ — Liabilities Series A warrant liability $ 2,159 $ 2,159 — — Series B warrant liability 11,025 — — 11,025 Series C warrant liability 894 — — 894 Total common stock warrant liability $ 14,078 $ 2,159 $ — $ 11,919 |
Summary of Changes in Fair Value of Level1 and Level 3 Financial Instruments | The following table sets forth a summary of the changes in the fair value of the Company’s Level 1 and Level 3 financial instruments, which are treated as liabilities, as follows: Series A Warrant Series B Warrant Series C Warrant Number of Liability Number of Liability Number of Liability (in thousands) (in thousands) (in thousands) Balance at December 31, 2014 (revised) 2,449,605 $ 857 2,449,605 $ 17,439 — $ — Change in value of Series A Warrants — 1,344 — — — — De-recognition of Series A Warrant liability upon exercise (24,000 ) (42 ) — — — — De-recognition of Series B Warrant liability upon cash exercise of 589,510 warrants in Private Transaction (589,510 shares issued) — — (589,510 ) (6,430 ) — — De-recognition of Series B Warrant liability for other cash exercises of 29,097 warrants (29,097 shares issued) — — (29,097 ) (317 ) — — De-recognition of Series B Warrant liability upon cashless exercise of 216,330 warrants (86,207 shares issued) — — (216,330 ) (1,726 ) — — De-recognition of Series B Warrant liability upon contribution of 468 warrants back to the Company — — (468 ) (3 ) — — Change in value of Series B Warrants — — — 2,062 — — Record Series C Warrant Liability — — — — 589,510 3,050 Change in value of Series C Warrants — — — — — (2,156 ) Balance at June 30, 2015 2,425,605 $ 2,159 1,614,200 $ 11,025 589,510 $ 894 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Summary of Outstanding Series B Warrants and Fair Market Values | As of December 31, 2014 and June 30, 2015 the outstanding Series B Warrants and fair market values were: Number of Fair Value at Number of Fair Value at (in thousands) 2,449,605 $17,439 1,614,200 $11,025 |
Series B Warrant Liability [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | As of December 31, 2014 and June 30, 2015 the Company used a Monte Carlo simulation to calculate the fair value of its Series B Warrant liability. This model is dependent upon several variables such as the warrant’s term, exercise price, current stock price, risk-free interest rate estimated over the contractual term, estimated volatility of our stock over the term of the warrant and the estimated market price of our stock during the cashless exercise period. The risk-free rate is based on U.S. Treasury securities with similar maturities as the expected terms of the warrants. The volatility is estimated based on blending the volatility rates for a number of similar publicly-traded companies. The Company used the following inputs: December 31, June 30, 2015 Volatility 87 % 90 % Expected Term (years) 1.1 0.62 Expected dividend yield 0.0 % 0.0 % Risk-free rate 0.26 % 0.26 % |
Series C Warrant Liability [Member] | |
Fair Value of Convertible Preferred Stock Warrant Liability | The Company has calculated the fair value of the Series C warrants using a Black-Scholes pricing model, which requires the input of highly subjective assumptions including the expected stock price volatility. The Company used the following inputs: March 5, June 30, Volatility 86 % 90 % Expected Term (years) 5.00 4.68 Expected dividend yield 0.0 % 0.0 % Risk-free rate 1.35 % 1.35 % |
Stockholders' Deficit (Tables)
Stockholders' Deficit (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Equity [Abstract] | |
Summary of Stock Based Compensation Expense | Stock compensation expense was recognized as follows (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2014 2015 2014 2015 Research and development $ — $ 23 $ 9 $ 72 Sales and marketing — 14 — 34 General and administrative 5 164 7 496 Total $ 5 $ 201 $ 16 $ 602 |
Summary of Stock Option Transactions | The following table summarizes stock option transactions as issued under the Plans: Options Number of Average Balances, December 31, 2014 606,061 1,072,011 $ 6.34 Authorized 270,764 Granted (798,013 ) 798,013 $ 3.16 Exercised — (83,848 ) $ 3.50 Forfeited 58,705 (58,705 ) $ 5.05 Balances, June 30, 2015 137,517 1,727,471 $ 5.05 |
Net loss per share (Tables)
Net loss per share (Tables) | 6 Months Ended |
Jun. 30, 2015 | |
Earnings Per Share [Abstract] | |
Schedule of Calculation of Basic Earnings per Share and Diluted Earnings per Share | The following is a reconciliation of the number of shares used in the calculation of basic earnings per share and diluted earnings per share during the three and six months ended June 30, 2014 and 2015 (in thousands, except per share and share data): Three Months Ended June 30, Six Months Ended 2015 2014 2015 2014 Net income (loss) $ 1,881 $ (2,793 ) $ (9,770 ) $ (3,627 ) Weighted-average shares used in computing net income (loss) per common share : Basic 7,517,794 535,685 7,243,163 535,685 Diluted 7,630,644 535,685 7,243,163 535,685 Net income (loss) per share: Basic $ 0.25 $ (5.21 ) $ (1.35 ) $ (6.77 ) Diluted $ 0.25 $ (5.21 ) $ (1.35 ) $ (6.77 ) |
Schedule of Potential Shares of Common Stock Not Included in Calculation of Fully Diluted Shares Outstanding | The potential shares of common stock have not been included in the calculation of fully diluted shares outstanding, because the effect of including them would be anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2015 2014 2015 2014 Convertible preferred stock — 865,429 — 865,429 Warrants issued to 2010/2012 convertible note holders to purchase common stock — — 480,147 Stock issuable upon conversion of convertible notes — Adjustable — Adjustable Warrants to purchase preferred stock — Adjustable — Adjustable Options to purchase common stock 1,533,618 240,906 1,727,471 240,906 Warrants issued in 2009 to purchase common stock 9,259 9,259 9,259 9,259 Warrants issued to underwriter to purchase common stock 82,500 — 82,500 — Series A warrants to purchase common stock 2,425,605 — 2,425,605 — Series B warrants to purchase common stock 1,614,200 — 1,614,200 — Series C warrants to purchase common stock 589,510 — 589,510 — 6,284,692 1,115,784 6,928,712 1,115,784 |
Schedule of Options and Warrants Included in Calculation of Fully Diluted Shares Outstanding | Using the treasury stock method the following options and warrants were included in the calculation of fully diluted shares outstanding for the three months ended June 30, 2015: Three Months Ended June 30, 2015 2014 Warrants issued to 2010/2012 convertible note holders to purchase common stock 480,147 — Options to purchase common stock 193,853 — |
Description of Business - Addit
Description of Business - Additional Information (Detail) | 6 Months Ended |
Jun. 30, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
State of incorporation | Delaware |
Date of incorporation | Aug. 25, 1999 |
Liquidity, Financial Conditio24
Liquidity, Financial Condition and Management's Plans - Additional Information (Detail) - USD ($) | Jul. 24, 2015 | Mar. 06, 2015 | Mar. 05, 2015 | Nov. 18, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 |
Liquidity And Managements Plans [Line Items] | |||||||||
Accumulated deficit | $ (80,109,000) | $ (80,109,000) | $ (70,338,000) | ||||||
Non-cash benefit relating to the decrease in fair value of derivative liabilities | 4,900,000 | ||||||||
Positive (deficit) in working capital | (5,200,000) | (5,200,000) | |||||||
Net cash used in operating activities | (4,060,000) | $ (1,666,000) | |||||||
Net income | 1,881,000 | $ (2,793,000) | (9,770,000) | $ (3,627,000) | $ (13,238,000) | ||||
Proceeds from exercise of stock options | 294,000 | ||||||||
Subsequent event [Member] | Aspire Capital Fund, LLC [Member] | |||||||||
Liquidity And Managements Plans [Line Items] | |||||||||
Maximum commitment under stock purchase agreement | $ 10,000,000 | ||||||||
Common stock purchase agreement period | 24 months | ||||||||
Series B Warrant Liability [Member] | |||||||||
Liquidity And Managements Plans [Line Items] | |||||||||
Positive (deficit) in working capital | $ 5,800,000 | 5,800,000 | |||||||
Proceed from Exercise of warrants to purchase of common stock | $ 3,800,000 | ||||||||
Private Placement Series B Warrants [Member] | |||||||||
Liquidity And Managements Plans [Line Items] | |||||||||
Proceed from Exercise of warrants to purchase of common stock | $ 3,800,000 | 3,832,000 | |||||||
Series A Warrant Liability [Member] | |||||||||
Liquidity And Managements Plans [Line Items] | |||||||||
Proceed from Exercise of warrants to purchase of common stock | $ 200,000 | $ 156,000 | |||||||
IPO [Member] | Units [Member] | |||||||||
Liquidity And Managements Plans [Line Items] | |||||||||
Description of units issued | 1,650,000 units, each of which consisted of one share of common stock, one Series A Warrant and one Series B Warrant. | ||||||||
Number of shares issued | 1,650,000 | ||||||||
Offering price per unit | $ 6.50 | ||||||||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | $ 8,000,000 |
Summary of Significant Accoun25
Summary of Significant Accounting Policies - Additional Information (Detail) - USD ($) | Jul. 01, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2015 |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Inventory, raw material | $ 124,000 | $ 124,000 | $ 124,000 | |
Inventory, work-in-process | 123,000 | 123,000 | 123,000 | |
Inventory, finished goods | 29,000 | 29,000 | 29,000 | |
Aggregate cash payments under purchase agreement | $ 450,000 | |||
Common stock shares issued under purchase agreement | 40,000 | |||
Future royalty obligations | $ 100,000 | 100,000 | $ 100,000 | |
Patent issued date | Jun. 19, 2003 | |||
Patent expiration date | Aug. 1, 2027 | |||
Government grant revenue | $ 65,000 | $ 65,000 | ||
Subsequent event [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Initial payment under purchase agreement | $ 150,000 |
Revision of Prior Year Financ26
Revision of Prior Year Financial Statements - Schedule of Revised Prior Period Balances (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Current liabilities | $ 13,349 | $ 13,349 | $ 1,290 | ||
Total liabilities | 16,402 | 16,402 | 19,586 | ||
Additional paid-in capital | 72,469 | 72,469 | 59,141 | ||
Accumulated deficit | (80,109) | (80,109) | (70,338) | ||
Total stockholders' deficit | (7,632) | (7,632) | (11,190) | ||
Liabilities and stockholders' deficit | 8,770 | 8,770 | 8,396 | ||
Other income (expense) | 4,925 | $ (1,486) | (4,300) | $ (1,636) | (3,949) |
Net loss | 1,881 | $ (2,793) | (9,770) | $ (3,627) | $ (13,238) |
Basic and diluted net loss per common share | $ (10.42) | ||||
Series A Warrant Liability [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Warrant liability | $ 2,159 | $ 2,159 | $ 857 | ||
Series B Warrant Liability [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Warrant liability | 17,439 | ||||
Previously reported [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Current liabilities | 1,290 | ||||
Total liabilities | 18,729 | ||||
Additional paid-in capital | 60,636 | ||||
Accumulated deficit | (70,975) | ||||
Total stockholders' deficit | (10,333) | ||||
Liabilities and stockholders' deficit | 8,396 | ||||
Other income (expense) | (4,585) | ||||
Net loss | $ (13,875) | ||||
Basic and diluted net loss per common share | $ (10.92) | ||||
Previously reported [Member] | Series B Warrant Liability [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Warrant liability | $ 17,439 | ||||
Adjustment [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Total liabilities | 857 | ||||
Additional paid-in capital | (1,494) | ||||
Accumulated deficit | 637 | ||||
Total stockholders' deficit | (857) | ||||
Other income (expense) | 637 | ||||
Net loss | $ 637 | ||||
Basic and diluted net loss per common share | $ 0.50 | ||||
Adjustment [Member] | Series A Warrant Liability [Member] | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Warrant liability | $ 857 |
Fair Value of Financial Instr27
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | $ 2,159 | $ 857 |
Series B Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 17,439 | |
Series C Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 894 | |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | ||
Liabilities | ||
Warrant liability | 14,078 | 18,296 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 2,159 | 857 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series B Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 11,025 | 17,439 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series C Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 894 | |
Fair Value, Measurements, Recurring [Member] | Money market fund [Member] | ||
Assets | ||
Cash and cash equivalents | 6,510 | 7,892 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Convertible preferred stock warrant liability [Member] | ||
Liabilities | ||
Warrant liability | 2,159 | 857 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 2,159 | 857 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Money market fund [Member] | ||
Assets | ||
Cash and cash equivalents | 6,510 | 7,892 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | ||
Liabilities | ||
Warrant liability | 11,919 | 17,439 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | Series B Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | 11,025 | $ 17,439 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | Series C Warrant Liability [Member] | ||
Liabilities | ||
Warrant liability | $ 894 |
Fair Value of Financial Instr28
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Level1 and Level 3 Financial Instruments (Detail) - USD ($) $ in Thousands | 6 Months Ended | ||
Jun. 30, 2015 | Mar. 31, 2015 | Mar. 05, 2015 | |
Series A Warrant Liability [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
De-recognition of Warrant liability upon exercise, in shares | (24,000) | ||
Balance at the end of period, in shares | 2,425,605 | ||
Series A Warrant Liability [Member] | Common stock warrant liability [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance at the beginning of period, in shares | 2,449,605 | ||
De-recognition of Warrant liability upon exercise, in shares | (24,000) | ||
Balance at the end of period, in shares | 2,425,605 | ||
Balance at the beginning of period | $ 857 | ||
Change in value of Warrant | 1,344 | ||
De-recognition of Warrant liability upon exercise | (42) | ||
Balance at end of period | $ 2,159 | ||
Series B Warrant Liability [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance at the beginning of period, in shares | 2,449,605 | ||
De-recognition of Warrant liability upon exercise, in shares | (589,510) | ||
Balance at the end of period, in shares | 1,614,200 | ||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Balance at the beginning of period, in shares | 2,449,605 | ||
Balance at the end of period, in shares | 1,614,200 | ||
Balance at the beginning of period | $ 17,439 | ||
Balance at end of period | $ 11,025 | ||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | Cash Exercise [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
De-recognition of Warrant liability upon exercise, in shares | (589,510) | ||
De-recognition of Warrant liability upon exercise | $ (6,430) | ||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | Other Cash Exercise [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
De-recognition of Warrant liability upon exercise, in shares | (29,097) | ||
De-recognition of Warrant liability upon exercise | $ (317) | ||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | Cash Less Exercise [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
De-recognition of Warrant liability upon exercise, in shares | (216,330) | ||
De-recognition of Warrant liability upon exercise | $ (1,726) | ||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | Warrants contributed back to the Company [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
De-recognition of Warrant liability upon exercise, in shares | (468) | ||
De-recognition of Warrant liability upon exercise | $ (3) | ||
Series C Warrant Liability [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Record Series C Warrant Liability | 589,510 | ||
Series C Warrant Liability [Member] | Common stock warrant liability [Member] | |||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |||
Record Series C Warrant Liability | 589,510 | ||
Balance at the end of period, in shares | 589,510 | ||
Record Series C Warrant Liability | $ 3,050 | ||
Balance at end of period | $ 894 |
Fair Value of Financial Instr29
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Level1 and Level 3 Financial Instruments (Parenthetical) (Detail) - Common stock warrant liability [Member] - Series B Warrant Liability [Member] | 6 Months Ended |
Jun. 30, 2015shares | |
Cash Exercise [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
De-recognition of Warrant liability upon exercise, shares issued | 589,510 |
Other Cash Exercise [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
De-recognition of Warrant liability upon exercise, shares issued | 29,097 |
Cash Less Exercise [Member] | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
De-recognition of Warrant liability upon exercise, shares issued | 86,207 |
Warrant Liabilities - Additiona
Warrant Liabilities - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 06, 2015 | Mar. 05, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Feb. 12, 2016 | Apr. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Nov. 18, 2014 |
Class of Warrant or Right [Line Items] | |||||||||||
Registration statements description | The Company is required to comply with certain requirement to cause or maintain the effectiveness of a registration statement for the offer and sale of these securities. The Warrant contracts further provide for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Warrant is convertible into in the event that the Company is unable to maintain the effectiveness of a registration | ||||||||||
Change in fair value of warrants recorded as other (income) expense | $ (4,925) | $ 816 | $ 1,249 | $ 578 | |||||||
Common Stock [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Issuance of shares upon cashless exercise warrants | 65,021 | 86,207 | |||||||||
Series B Warrants to Purchase Shares of Common Stock [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of common stock purchased upon issuance of warrants | 2,449,605 | 2,449,605 | |||||||||
Series B Warrants to Purchase Shares of Common Stock [Member] | Scenario Forecast [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Decrease in common stock market price | $ 6.50 | ||||||||||
Series A Warrants to Purchase Shares of Common Stock [Member] | IPO [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of common stock purchased upon issuance of warrants | 2,449,605 | ||||||||||
Exercise price of warrants exercised | $ 6.50 | ||||||||||
Warrants term | 5 years | ||||||||||
Series A Warrant Liability [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Warrants exercised | 24,000 | ||||||||||
Warrants outstanding | 2,425,605 | 2,425,605 | |||||||||
Fair value of warrants outstanding | $ 2,200 | $ 2,200 | |||||||||
Change in fair value of warrants recorded as other (income) expense | $ 1,400 | ||||||||||
Gross proceeds upon exercise of warrants | $ 200 | $ 156 | |||||||||
Series B Warrant Liability [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Exercise price of warrants exercised | $ 6.50 | $ 6.25 | |||||||||
Warrants exercised | 589,510 | ||||||||||
Warrants outstanding | 1,614,200 | 1,614,200 | 2,449,605 | ||||||||
Fair value of warrants outstanding | $ 11,025 | $ 11,025 | $ 17,439 | ||||||||
Warrants cashless exercised | 164,075 | 216,330 | |||||||||
De-recognition of warrant liability | $ 6,400 | $ 1,300 | $ 1,700 | ||||||||
Gross proceeds upon exercise of warrants | $ 3,800 | ||||||||||
Warrants expiry date | Mar. 4, 2020 | ||||||||||
Expiration date of warrant tender offer | Jul. 24, 2015 | ||||||||||
Effective date of warrant tender offer | Jun. 25, 2015 | ||||||||||
Description of warrant tender offer | The tender offer was extended to warrant holders under a registration statement filed with the Securities and Exchange Commission on Form S-4, which was declared effective on June 25, 2015 and is set to expire on July 24, 2015. As of June 30, 2015, no Series B warrants have been tendered under the offer of exchange. | ||||||||||
Warrants tender offer | 0 | ||||||||||
Series B Warrant Liability [Member] | Decrease in carrying value [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Change in fair value of warrants recorded as other (income) expense | 1,900 | $ 6,400 | |||||||||
Series C Warrant Liability [Member] | |||||||||||
Class of Warrant or Right [Line Items] | |||||||||||
Number of common stock purchased upon issuance of warrants | 589,510 | ||||||||||
Exercise price of warrants exercised | $ 6.25 | ||||||||||
Fair value of warrants outstanding | 900 | $ 900 | $ 2,500 | ||||||||
Change in fair value of warrants recorded as other (income) expense | $ 1,600 | ||||||||||
Warrants expiry date | Mar. 5, 2020 |
Warrant Liabilities - Fair Valu
Warrant Liabilities - Fair Value of Convertible Preferred Stock Warrant Liability (Detail) | Jun. 30, 2015 | Mar. 05, 2015 | Dec. 31, 2014 |
Series C Warrant Liability [Member] | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Volatility | 90.00% | 86.00% | |
Expected Term (years) | 4 years 8 months 5 days | 5 years | |
Expected dividend yield | 0.00% | 0.00% | |
Risk-free rate | 1.35% | 1.35% | |
Series B Warrant Liability [Member] | |||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | |||
Volatility | 90.00% | 87.00% | |
Expected Term (years) | 7 months 13 days | 1 year 1 month 6 days | |
Expected dividend yield | 0.00% | 0.00% | |
Risk-free rate | 0.26% | 0.26% |
Warrant Liabilities - Summary o
Warrant Liabilities - Summary of Outstanding Series B Warrants and Fair Market Values (Detail) - Series B Warrant Liability [Member] - USD ($) $ in Thousands | Jun. 30, 2015 | Dec. 31, 2014 |
Class of Warrant or Right [Line Items] | ||
Warrants, Number of warrants | 1,614,200 | 2,449,605 |
Warrants, Fair value | $ 11,025 | $ 17,439 |
Credit Facility - Additional In
Credit Facility - Additional Information (Detail) - USD ($) | 6 Months Ended | ||
Jun. 30, 2015 | Oct. 31, 2014 | Sep. 29, 2014 | |
Line of Credit Facility [Abstract] | |||
Line of credit amount | $ 100,000 | ||
Line of credit, fixed interest rate per annum | 6.00% | ||
Line of credit, interest rate description | The line of credit bears a fixed interest rate of 6.0% per annum simple interest. | ||
Line of credit, repayment term | 2 years | ||
Line of credit facility, initiation date | Sep. 29, 2014 | ||
Amount of line of credit | $ 100,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jul. 01, 2015 | Jun. 30, 2015 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2010 | Mar. 31, 2015 | Feb. 02, 2015 |
Loss Contingencies [Line Items] | |||||||||||
Non-cancelable operating lease agreement expiration date | 2015-05 | ||||||||||
Future minimum commitment under non-cancelable operating lease | $ 22,000 | ||||||||||
Lease expiration extended date | 2018-06 | ||||||||||
Lease payment, description | The amendment provides for monthly lease payments of $22,000 beginning in June 2015, with increases in the following two years. | ||||||||||
New lease agreement date | Jul. 1, 2015 | ||||||||||
Rent expense | $ 59,000 | $ 64,000 | $ 114,000 | $ 121,000 | |||||||
Aggregate cash payments under purchase agreement | $ 450,000 | ||||||||||
Common stock shares issued under purchase agreement | 40,000 | ||||||||||
Future royalty obligations | $ 100,000 | 100,000 | $ 100,000 | ||||||||
Patent issued date | Jun. 19, 2003 | ||||||||||
Patent expiration date | Aug. 1, 2027 | ||||||||||
Common Stock Issuable | $ 112,000 | $ 112,000 | $ 112,000 | ||||||||
Subsequent event [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Future minimum commitment under non-cancelable operating lease | $ 23,300 | ||||||||||
Lease payment, description | The lease agreement provides for monthly lease payments of $23,300 beginning in September of 2015, with increases in the following three years. | ||||||||||
Initial payment under purchase agreement | $ 150,000 | ||||||||||
Milestone Payments [Member] | BioMedical Drug Development, Inc. [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Development and sales-related milestone payments, maximum | $ 200,000 | ||||||||||
Payments made and liabilities incurred under asset purchase agreement | $ 0 | $ 0 | |||||||||
Outstanding payments | $ 0 | ||||||||||
Intellectual property [Member] | BioMedical Drug Development, Inc. [Member] | |||||||||||
Loss Contingencies [Line Items] | |||||||||||
Acquisition of intellectual property | $ 150,000 |
Stockholders' Deficit - Stock O
Stockholders' Deficit - Stock Option Plan - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Future stock-based compensation for unvested employee options granted and outstanding | $ 1.7 | |
Annual increases in the number of shares available for issuance, percentage of outstanding common stock | 1.00% | |
Purchases by employees under ESPP | 0 | |
Warrants to Purchase Stock [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants cashless exercised | 43,720 | |
Issuance of shares upon cashless exercise warrants | 13,407 | |
Warrants to Purchase Stock [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding | 480,147 | |
Issuance Date January 2009 [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding | 9,259 | |
Underwriter [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Warrants outstanding | 82,500 | |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for sale under the ESPP | 139,839 | |
Annual increases in the number of shares available for issuance, number of shares | 279,680 | |
NSO [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of fair market value | 85.00% | |
Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock option compensation, description | For individuals holding more than 10% of the voting rights of all classes of stock, the exercise price of an option will not be less than 110% of fair value. | |
Vesting period | 4 years | |
Future stock-based compensation, requisite service period | 3 years 6 months | |
Shares available for sale under the ESPP | 137,517 | 606,061 |
Annual increases in the number of shares available for issuance, number of shares | 270,764 | |
Minimum [Member] | Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of fair market value | 110.00% | |
Maximum [Member] | Stock Options [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractual term of option | 10 years | |
Maximum [Member] | ISOs [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractual term of option | 5 years |
Stockholders' Deficit - Summary
Stockholders' Deficit - Summary of Stock Based Compensation Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock compensation expense | $ 201 | $ 5 | $ 602 | $ 16 |
Research and development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock compensation expense | 23 | 72 | 9 | |
Sales and marketing [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock compensation expense | 14 | 34 | ||
General and administrative [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Total stock compensation expense | $ 164 | $ 5 | $ 496 | $ 7 |
Stockholders' Deficit - Summa37
Stockholders' Deficit - Summary of Stock Option Transactions (Detail) - 6 months ended Jun. 30, 2015 - Stock Options [Member] - $ / shares | Total |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Options Available, Beginning balance | 606,061 |
Options Available, Authorized | 270,764 |
Options Available, Granted | (798,013) |
Options Available, Exercised | 0 |
Options Available, Forfeited | 58,705 |
Options Available, Ending balance | 137,517 |
Number of Shares, Outstanding, Beginning balance | 1,072,011 |
Number of Shares, Granted | 798,013 |
Number of Shares, Exercised | (83,848) |
Number of Shares, Forfeited | (58,705) |
Number of Shares, Ending balance | 1,727,471 |
Average Exercise Price, Beginning balance | $ 6.34 |
Average Exercise Price, Granted | 3.16 |
Average Exercise Price, Exercised | 3.50 |
Average Exercise Price, Forfeited | 5.05 |
Average Exercise Price, Ending balance | $ 5.05 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Calculation of Basic Earnings per Share and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | Dec. 31, 2014 | |
Net Income (Loss) Available to Common Stockholders, Basic [Abstract] | |||||
Net income (loss) | $ 1,881 | $ (2,793) | $ (9,770) | $ (3,627) | $ (13,238) |
Weighted-average shares used in computing net income (loss) per common share : | |||||
Basic | 7,517,794 | 535,685 | 7,243,164 | 535,685 | |
Diluted | 7,630,644 | 535,685 | 7,243,164 | 535,685 | |
Net income (loss) per share: | |||||
Basic | $ 0.25 | $ (5.21) | $ (1.35) | $ (6.77) | |
Diluted | $ 0.25 | $ (5.21) | $ (1.35) | $ (6.77) |
Net Loss per Share - Schedule39
Net Loss per Share - Schedule of Potential Shares of Common Stock Not Included in Calculation of Fully Diluted Shares Outstanding (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 6,284,692 | 1,115,784 | 6,928,712 | 1,115,784 |
Convertible Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 865,429 | 865,429 | ||
Stock Issuable Upon Conversion of Convertible Notes [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | ||||
Options to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 1,533,618 | 240,906 | 1,727,471 | 240,906 |
Warrants to Purchase Stock [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 480,147 | |||
Warrants To Purchase Preferred Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | ||||
Issuance Date January 2009 [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 9,259 | 9,259 | 9,259 | 9,259 |
Underwriter [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 82,500 | 82,500 | ||
Series A Warrants to Purchase Shares of Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 2,425,605 | 2,425,605 | ||
Series B Warrants to Purchase Shares of Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 1,614,200 | 1,614,200 | ||
Series C Warrant to Purchase Common Stock [Member] | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities not included in calculation of fully diluted shares outstanding | 589,510 | 589,510 |
Net Loss per Share - Schedule40
Net Loss per Share - Schedule of Options and Warrants Included in Calculation of Fully Diluted Shares Outstanding (Detail) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2015 | Jun. 30, 2014 | |
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items] | ||||
Fully diluted shares outstanding | 7,630,644 | 535,685 | 7,243,164 | 535,685 |
Options to Purchase Common Stock [Member] | ||||
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items] | ||||
Fully diluted shares outstanding | 193,853 | |||
Warrants to Purchase Stock [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | ||||
Dilutive Securities Included In Computation Of Earnings Per Share [Line Items] | ||||
Fully diluted shares outstanding | 480,147 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) | Mar. 01, 2016ft² | Jul. 24, 2015USD ($)shares | Jul. 01, 2015USD ($)ft²shares | Jun. 30, 2015shares | Jun. 30, 2015shares | Feb. 02, 2015USD ($) |
Subsequent Event [Line Items] | ||||||
Monthly lease payments under non-cancelable operating lease | $ | $ 22,000 | |||||
Lease payment, description | The amendment provides for monthly lease payments of $22,000 beginning in June 2015, with increases in the following two years. | |||||
Scenario Forecast [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Additional area of office space for headquarters facility | ft² | 5,265 | |||||
Series B Warrant Liability [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Warrants cashless exercised | 164,075 | 216,330 | ||||
Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Issuance of shares upon cashless exercise warrants | 65,021 | 86,207 | ||||
Subsequent event [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Area of office space for headquarters facility | ft² | 8,171 | |||||
Monthly lease payments under non-cancelable operating lease | $ | $ 23,300 | |||||
Lease payment, description | The lease agreement provides for monthly lease payments of $23,300 beginning in September of 2015, with increases in the following three years. | |||||
Non-cancelable operating lease agreement term | 4 years | |||||
Subsequent event [Member] | Aspire Capital Fund, LLC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Maximum commitment under stock purchase agreement | $ | $ 10,000,000 | |||||
Common stock purchase agreement period | 24 months | |||||
Proceeds from issuance of common stock under tender offer | $ | $ 5,882 | |||||
Subsequent event [Member] | Aspire Capital Fund, LLC [Member] | Maximum [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Additional capital shares of common stock | 75,000 | |||||
Subsequent event [Member] | Series B Warrant Liability [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Warrants cashless exercised | 189,879 | |||||
Subsequent event [Member] | Series C Warrant Liability [Member] | Aspire Capital Fund, LLC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Warrants cashless exercised | 905 | |||||
Subsequent event [Member] | Common Stock [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Issuance of shares upon cashless exercise warrants | 534,497 | |||||
Subsequent event [Member] | Common Stock [Member] | Aspire Capital Fund, LLC [Member] | ||||||
Subsequent Event [Line Items] | ||||||
Issuance of shares upon cashless exercise warrants | 905 |