Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2016 | |
Document And Entity Information [Abstract] | |
Document Type | S1 |
Amendment Flag | false |
Document Period End Date | Sep. 30, 2016 |
Trading Symbol | CAPN |
Entity Registrant Name | Capnia, Inc. |
Entity Central Index Key | 1,484,565 |
Entity Filer Category | Smaller Reporting Company |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets | |||
Cash and cash equivalents | $ 5,415,000 | $ 5,494,523 | $ 7,956,710 |
Accounts receivable | 137,000 | 156,127 | 0 |
Restricted cash | 35,000 | 35,000 | 20,000 |
Inventory | 703,000 | 551,008 | 109,336 |
Prepaid expenses and other current assets | 217,000 | 167,642 | 252,272 |
Total current assets | 6,507,000 | 6,404,300 | 8,338,318 |
Long-term assets | |||
Property and equipment, net | 116,000 | 85,745 | 57,607 |
Goodwill | 718,000 | 718,003 | 0 |
Other intangible assets, net | 842,000 | 916,807 | 0 |
Other assets | 126,000 | 76,340 | 0 |
Total assets | 8,309,000 | 8,201,195 | 8,395,925 |
Current liabilities | |||
Accounts payable | 862,000 | 695,056 | 986,799 |
Accrued compensation and other current liabilities | 915,000 | 1,632,679 | 201,457 |
Line of credit and accrued interest | 0 | 101,529 | |
Total current liabilities | 1,777,000 | 3,192,735 | 1,289,785 |
Commitments and contingencies | |||
Long-term liabilities | |||
Other long-term liabilities | 196,000 | 109,404 | 0 |
Commitments and contingencies | |||
Stockholders' equity | |||
Common stock | 15,000 | 14,018 | 6,769 |
Additional paid-in-capital | 101,395,000 | 89,456,466 | 59,141,405 |
Accumulated deficit | (95,698,000) | (86,246,673) | (70,338,127) |
Total stockholders' equity (deficit) | 5,712,000 | 3,223,816 | (11,189,953) |
Total liabilities and stockholders' equity | 8,309,000 | 8,201,195 | 8,395,925 |
Series A Convertible Preferred Stock [Member] | |||
Stockholders' equity | |||
Convertible preferred stock | 0 | 5 | 0 |
Series B Convertible Preferred Stock [Member] | |||
Stockholders' equity | |||
Convertible preferred stock | 0 | 0 | |
Series B Warrant Liability [Member] | |||
Current liabilities | |||
Warrant liability | 865,000 | 0 | |
Long-term liabilities | |||
Warrant liability | 0 | 17,438,731 | |
Series A Warrant Liability [Member] | |||
Long-term liabilities | |||
Warrant liability | 509,000 | 1,212,803 | $ 857,362 |
Series C Warrant [Member] | |||
Long-term liabilities | |||
Warrant liability | $ 115,000 | $ 462,437 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 100,000,000 | 100,000,000 |
Common stock, shares issued | 15,761,530 | 14,017,909 | 6,769,106 |
Common stock, shares outstanding | 15,761,530 | 14,017,909 | 6,769,106 |
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | |
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | |
Series A Convertible Preferred Stock [Member] | |||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | $ 0.001 | $ 0.001 |
Convertible preferred stock, shares designated | 10,000 | 10,000 | |
Convertible preferred stock, shares authorized | 10,000,000 | 40,000 | 40,000 |
Convertible preferred stock, shares issued | 0 | 4,555 | 0 |
Convertible preferred stock, shares outstanding | 0 | 4,555 | 0 |
Series B Convertible Preferred Stock [Member] | |||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | ||
Convertible preferred stock, shares designated | 13,780 | 0 | |
Convertible preferred stock, shares issued | 13,780 | 0 | |
Convertible preferred stock, shares outstanding | 13,780 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | ||||||
Government grant revenue | $ 0 | $ 155,000 | $ 0 | $ 220,000 | $ 219,917 | |
Product revenue | 329,000 | 92,000 | 1,167,000 | 146,000 | 387,555 | $ 0 |
Total revenue | 329,000 | 247,000 | 1,167,000 | 366,000 | 607,472 | 0 |
Cost of product revenue | 399,000 | 56,000 | 1,287,000 | 96,000 | 352,683 | 0 |
Gross profit (loss) | (70,000) | 191,000 | (120,000) | 270,000 | 254,789 | 0 |
Expenses | ||||||
Research and development | 1,131,000 | 1,193,000 | 4,231,000 | 3,252,000 | 4,536,244 | 2,242,216 |
Sales and marketing | 342,000 | 467,000 | 1,457,000 | 1,239,000 | 1,737,470 | 252,359 |
General and administrative | 1,398,000 | 1,714,000 | 4,846,000 | 4,432,000 | 6,140,821 | 2,665,154 |
Total expenses | 2,871,000 | 3,374,000 | 10,534,000 | 8,923,000 | 12,414,535 | 5,159,729 |
Operating loss | (2,941,000) | (3,183,000) | (10,654,000) | (8,653,000) | (12,159,746) | (5,159,729) |
Interest and other income (expense) | ||||||
Interest expense, net | 0 | 0 | 0 | (1,000) | 0 | (4,130,394) |
Interest income | 0 | 1,085 | ||||
Change in fair value of warrants liabilities (expense) | 200,000 | 73,000 | 1,323,000 | (1,177,000) | (515,860) | (3,941,335) |
Cease-use expense | 0 | 0 | (94,000) | 0 | ||
Other expense | (9,000) | (183,000) | (27,000) | (183,000) | (183,565) | (7,243) |
Inducement charge for Series C warrants | 0 | 0 | 0 | (3,050,000) | (3,049,375) | 0 |
Interest and other income (expense), net | 191,000 | (110,000) | 1,202,000 | (4,411,000) | ||
Net loss | (2,750,000) | (3,293,000) | (9,452,000) | (13,064,000) | $ (15,908,546) | $ (13,237,616) |
Loss on extinguishment of convertible preferred stock | (3,651,000) | 0 | (3,651,000) | 0 | ||
Net loss attributable to common stockholders | $ (6,401,000) | $ (3,293,000) | $ (13,103,000) | $ (13,064,000) | ||
Basic and diluted net loss per common share (in dollars per share) | $ (0.41) | $ (0.33) | $ (0.85) | $ (1.60) | $ (1.69) | $ (10.42) |
Weighted-average common shares outstanding used to calculate basic and diluted net loss per common share | 15,761,530 | 10,040,079 | 15,363,648 | 8,178,897 | 9,425,880 | 1,270,033 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | ||||
Net loss | $ (9,452,000) | $ (13,064,000) | $ (15,908,546) | $ (13,237,616) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||
Depreciation and amortization | 94,000 | 59,000 | 108,228 | 28,516 |
Stock-based compensation expense | 560,000 | 746,000 | 942,369 | 345,435 |
Loss on disposition of property and equipment | 1,000 | 0 | 0 | 7,727 |
Change in fair value of common stock warrants | (1,323,000) | 1,177,000 | 515,860 | 3,941,335 |
Non-cash interest expense relating to convertible promissory notes & amortization of discount on notes | 0 | 4,128,863 | ||
Inducement charge for Series C warrants | 0 | 3,050,000 | 3,049,375 | 0 |
Non-cash expense of issuing shares to Aspire Capital | 0 | 183,000 | 183,322 | 0 |
Non-cash interest expense relating to line of credit | 0 | 1,529 | ||
Change in fair value of contingent consideration | 35,000 | 0 | ||
Change in operating assets and liabilities: | ||||
Accounts receivable | 19,000 | (94,000) | (156,127) | 149,605 |
Inventory | (152,000) | (267,000) | (441,672) | (109,336) |
Other receivables | 0 | 0 | ||
Prepaid expenses and other assets | (50,000) | 27,000 | 84,630 | (167,123) |
Other long-term assets | (50,000) | 0 | (76,340) | 0 |
Accounts payable | 175,000 | 542,000 | 211,945 | 353,897 |
Accrued compensation and other current liabilities | (719,000) | 720,000 | 1,187,626 | 72,806 |
Other long-term liabilities | 52,000 | 0 | ||
Net cash used in operating activities | (10,810,000) | (6,921,000) | (10,299,330) | (4,484,362) |
Cash flows from investing activities: | ||||
Cash paid for purchase of assets of NeoForce Group, Inc. | 0 | (1,000,000) | (1,000,000) | 0 |
Cash paid for patent acquisition | 0 | (150,000) | (250,000) | 0 |
Increase in restricted cash | 0 | (91,000) | (15,000) | 0 |
Purchase of property and equipment | (39,000) | (48,000) | (55,777) | (30,683) |
Net cash used in investing activities | (39,000) | (1,289,000) | (1,320,777) | (30,683) |
Cash flows from financing activities: | ||||
Proceeds from exercise of common stock options | 70,000 | 294,000 | 293,573 | 0 |
Repayment of credit line | 0 | (102,000) | (101,529) | 0 |
Proceeds from issuance of preferred stock warrants | 0 | 1,946 | ||
Proceeds from issuance of convertible notes payable | 0 | 2,490,781 | ||
Proceeds from line of credit | 0 | 100,000 | ||
Proceeds from Initial Public Offering | 0 | 10,727,475 | ||
Initial Public Offering costs paid | 0 | (530,000) | (575,181) | (2,117,217) |
Net cash provided by financing activities | 10,769,000 | 4,973,000 | 9,157,920 | 11,202,985 |
Proceeds from issuance of common stock | 1,434,000 | 1,434,194 | 0 | |
Net decrease in cash and cash equivalents | (80,000) | (3,237,000) | (2,462,187) | 6,687,940 |
Cash and cash equivalents, beginning of period | 5,494,523 | 7,956,710 | 7,956,710 | 1,268,770 |
Cash and cash equivalents, end of period | 5,415,000 | 4,720,000 | 5,494,523 | 7,956,710 |
Supplemental disclosures of noncash investing and financing information | ||||
Series A preferred convertible stock transaction costs included in Accounts Payable | 71,493 | 0 | ||
Conversion of Series A preferred to common stock | 2,220,000 | 0 | 23,808,048 | |
Patent costs included in Accrued liabilities | 0 | 300,000 | 200,000 | 0 |
Stock issuable in consideration for Patent purchase | 0 | 112,000 | 112,400 | 0 |
Series B transaction costs in accounts payable | 52,000 | 0 | ||
Cashless exercise of 2010 and 2012 warrants | 0 | 13,000 | 13 | 0 |
Fixed asset purchases in accounts payable | 11,000 | 0 | ||
Initial public offering costs accrued and included in accounts payable | 0 | 575,181 | ||
Beneficial conversion feature related to the warrants to purchase shares of convertible preferred stock in connection with convertible promissory notes | 0 | 1,723,984 | ||
Issuance of warrants for the purchase of convertible preferred stock in connection with notes payable | 0 | 966,978 | ||
Reduction in initial public offering costs payable | 0 | 45,000 | ||
Series A Convertible Preferred Stock [Member] | ||||
Cash flows from financing activities: | ||||
Proceeds from sale of preferred convertible stock | 5,071,000 | 0 | 4,230,150 | 0 |
Initial Public Offering costs paid | (71,000) | 0 | ||
Series B Convertible Preferred Stock [Member] | ||||
Cash flows from financing activities: | ||||
Proceeds from sale of preferred convertible stock | 13,479,000 | 0 | ||
IPO [Member] | 2014 Convertible Promissory Notes [Member] | ||||
Supplemental disclosures of noncash investing and financing information | ||||
Notes payable converted into common stock in IPO | 0 | 2,512,119 | ||
IPO [Member] | 2010 and 2012 Convertible Promissory Notes [Member] | ||||
Supplemental disclosures of noncash investing and financing information | ||||
Notes payable converted into common stock in IPO | 0 | 15,410,110 | ||
Series A Warrant Liability [Member] | ||||
Cash flows from financing activities: | ||||
Proceeds from exercise of Series B warrants (Private Transaction) | 0 | 156,000 | 156,000 | 0 |
Redemption of Series A preferred convertible stock in conjunction with issuance of Series B Convertible Preferred | (7,780,000) | 0 | ||
Series A Warrant Liability [Member] | Cash Exercise [Member] | ||||
Supplemental disclosures of noncash investing and financing information | ||||
De-recognition of Series B warrants contributed back to the Company | 0 | 42,000 | 42,000 | 0 |
Series B Warrant Liability [Member] | ||||
Cash flows from financing activities: | ||||
Proceeds from exercise of Series B warrants (Private Transaction) | 0 | 189,000 | 3,720,713 | 0 |
Series B warrant transaction costs paid | 0 | (306,000) | ||
Supplemental disclosures of noncash investing and financing information | ||||
De-recognition of Series B warrants contributed back to the Company | 0 | 3,000 | 3,332 | 0 |
Series B Warrant Liability [Member] | Cash Exercise [Member] | ||||
Supplemental disclosures of noncash investing and financing information | ||||
De-recognition of Series B warrants contributed back to the Company | 0 | 6,747,000 | 6,747,765 | 0 |
Series B Warrant Liability [Member] | Cash Less Exercise [Member] | ||||
Supplemental disclosures of noncash investing and financing information | ||||
De-recognition of Series B warrants contributed back to the Company | 593,000 | 9,475,000 | $ 12,527,991 | $ 0 |
Private Placement Series B Warrants [Member] | ||||
Cash flows from financing activities: | ||||
Proceeds from exercise of Series B warrants (Private Transaction) | $ 0 | 3,832,000 | ||
Tender Offer Series B Warrants [Member] | ||||
Cash flows from financing activities: | ||||
Proceeds from exercise of Series B warrants (Private Transaction) | $ 6,000 |
Statements of Convertible Prefe
Statements of Convertible Preferred Stock and Stockholders' Equity/(Deficit) - USD ($) | Total | 2010 and 2012 Convertible Promissory Notes [Member] | 2014 Convertible Promissory Notes [Member] | Series A and Series B Warrants [Member] | Series A Warrant Liability [Member] | Series B Warrant Liability [Member] | Series B Warrant Cashless Exercises [Member] | Common Stock [Member] | Common Stock [Member]2010 and 2012 Convertible Promissory Notes [Member] | Common Stock [Member]2014 Convertible Promissory Notes [Member] | Common Stock [Member]Series A Warrant Liability [Member] | Common Stock [Member]Series B Warrant Liability [Member] | Common Stock [Member]Series B Warrant Cashless Exercises [Member] | Additional Paid-In Capital [Member] | Additional Paid-In Capital [Member]2010 and 2012 Convertible Promissory Notes [Member] | Additional Paid-In Capital [Member]2014 Convertible Promissory Notes [Member] | Additional Paid-In Capital [Member]Series A and Series B Warrants [Member] | Additional Paid-In Capital [Member]Series A Warrant Liability [Member] | Additional Paid-In Capital [Member]Series B Warrant Liability [Member] | Additional Paid-In Capital [Member]Series B Warrant Cashless Exercises [Member] | Accumulated Deficit [Member] | Series A Convertible Preferred Stock [Member] | Series B Convertible Preferred Stock [Member] | Series C Convertible Preferred Stock [Member] |
Balances at beginning at Dec. 31, 2013 | $ 1,500,000 | $ 6,862,939 | $ 15,445,109 | |||||||||||||||||||||
Balances at beginning (shares) at Dec. 31, 2013 | 31,250 | 119,140 | 715,039 | |||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||||
Conversion of preferred stock to common stock in IPO | $ (1,500,000) | $ (6,862,939) | $ (15,445,109) | |||||||||||||||||||||
Conversion of preferred stock to common stock in IPO (shares) | (31,250) | (119,140) | (715,039) | |||||||||||||||||||||
Balances at ending at Dec. 31, 2014 | $ 0 | $ 0 | $ 0 | |||||||||||||||||||||
Balances at ending (shares) at Dec. 31, 2014 | 0 | 0 | 0 | |||||||||||||||||||||
Balances at beginning at Dec. 31, 2013 | $ (34,195,637) | $ 522 | $ 19,197,109 | $ (53,393,268) | ||||||||||||||||||||
Balances at beginning (shares) at Dec. 31, 2013 | 522,360 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Stock-based compensation | 345,435 | 345,435 | ||||||||||||||||||||||
Conversion of preferred stock to common stock in IPO | 23,808,048 | $ 865 | 23,807,183 | |||||||||||||||||||||
Conversion of preferred stock to common stock in IPO, shares | 865,429 | |||||||||||||||||||||||
Stock warrant liability reclassification | 1,220,718 | $ 18,975 | 1,220,718 | $ 18,975 | ||||||||||||||||||||
Issuance of common stock | 9,846,552 | $ 1,650 | 9,844,902 | |||||||||||||||||||||
Issuance of common stock (shares) | 1,650,000 | |||||||||||||||||||||||
Beneficial conversion feature in connection with related party convertible promissory notes | 1,723,984 | 1,723,984 | ||||||||||||||||||||||
Conversion of notes payable into common stock in IPO | $ 15,410,110 | $ 2,512,119 | $ 3,166 | $ 552 | $ 15,406,944 | $ 2,511,567 | ||||||||||||||||||
Conversion of notes payable into common stock in IPO, Shares | 3,165,887 | 552,105 | ||||||||||||||||||||||
Deferred IPO costs | (1,830,450) | (1,830,450) | ||||||||||||||||||||||
Warrants treated as derivative liability | $ (1,494,259) | $ (11,649,106) | $ (1,494,259) | $ (11,649,106) | ||||||||||||||||||||
Net loss | (13,237,616) | (13,237,616) | ||||||||||||||||||||||
Balances at end at Dec. 31, 2014 | (11,189,953) | $ 6,769 | 59,141,405 | (70,338,127) | ||||||||||||||||||||
Balances at end (shares) at Dec. 31, 2014 | 6,769,106 | |||||||||||||||||||||||
Increase (Decrease) in Temporary Equity [Roll Forward] | ||||||||||||||||||||||||
Issuance of Series A Convertible Preferred shares(net of transaction costs of $396,343) | $ 5 | |||||||||||||||||||||||
Issuance of Series A Convertible Preferred shares(net of transaction costs of $396,343) (shares) | 4,555 | |||||||||||||||||||||||
Balances at ending at Dec. 31, 2015 | $ 5 | $ 0 | $ 0 | |||||||||||||||||||||
Balances at ending (shares) at Dec. 31, 2015 | 4,555 | 0 | 0 | |||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Stock-based compensation | 942,369 | 942,369 | ||||||||||||||||||||||
Issuance of common stock | 293,573 | $ 0 | 156,000 | 3,720,713 | $ 422,540 | $ 84 | $ 13 | $ 24 | $ 619 | $ 5,880 | 293,489 | $ (13) | 155,976 | 3,720,094 | $ 416,660 | |||||||||
Issuance of common stock (shares) | 83,848 | 13,407 | 24,000 | 619,512 | 5,879,560 | |||||||||||||||||||
Contribution of Series B warrants | 3,332 | 3,332 | ||||||||||||||||||||||
Derecognition of warrant liability upon exercise | $ 42,000 | $ 18,853,215 | $ 42,000 | $ 18,853,215 | ||||||||||||||||||||
Issuance of shares in conjunction with BDDI asset purchase | 112,400 | $ 50 | 112,350 | |||||||||||||||||||||
Issuance of shares in conjunction with BDDI asset purchase (shares) | 50,000 | |||||||||||||||||||||||
Issuance of shares to Aspire Capital | 183,322 | $ 72 | 183,250 | |||||||||||||||||||||
Issuance of shares to Aspire Capital (shares) | 71,891 | |||||||||||||||||||||||
Sales of shares through Aspire ATM vehicle | 1,434,194 | $ 507 | 1,433,687 | |||||||||||||||||||||
Sales of shares through Aspire ATM vehicle (shares) | 506,585 | |||||||||||||||||||||||
Issuance of Series A Convertible Preferred shares(net of transaction costs of $396,343) | 4,158,657 | 4,158,652 | ||||||||||||||||||||||
Net loss | (15,908,546) | (15,908,546) | ||||||||||||||||||||||
Balances at end at Dec. 31, 2015 | 3,223,816 | $ 14,018 | $ 89,456,466 | $ (86,246,673) | ||||||||||||||||||||
Balances at end (shares) at Dec. 31, 2015 | 14,017,909 | |||||||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Conversion of preferred stock to common stock in IPO | 2,220,000 | |||||||||||||||||||||||
Net loss | (9,452,000) | |||||||||||||||||||||||
Balances at end at Sep. 30, 2016 | $ 5,712,000 |
Statements of Convertible Pref7
Statements of Convertible Preferred Stock and Stockholders' Equity/(Deficit) (Parenthetical) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Issuance of common stock in IPO, discounts & commission | $ 861,948 | |
Series A Convertible Preferred Stock [Member] | ||
Transaction costs | $ 396,343 | |
Series B Warrant Liability [Member] | ||
Transaction costs | $ 306,116 |
Description of Business
Description of Business | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 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 and commercializes neonatology devices and diagnostics. The Company also has a therapeutics platform based on its proprietary technology for precision metering of gas flow. On September 8, 2015, the Company established NeoForce, Inc. (“NFI”), a wholly owned subsidiary of the Company and through NFI, acquired substantially all of the assets of an unrelated privately held company NeoForce Group, Inc.(“NeoForce”). NFI develops innovative pulmonary resuscitation solutions for the inpatient and ambulatory neonatal markets. On April 27, 2015, the Company established Capnia UK Limited, a wholly owned foreign subsidiary in the United Kingdom. Capnia UK Limited began sales and marketing operations in the first quarter of 2016. The Company’s most recent product to launch commercially is Serenz ® 2 The Company is also selling the CoSense ® | 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 and commercializes neonatology devices and diagnostics. The Company also has a therapeutics platform based on its proprietary technology for precision metering of gas flow. On September 2, 2015, the Company established NeoForce, Inc. (“NFI”), a wholly owned subsidiary incorporated in the State of Delaware. On September 8, 2015, NFI, acquired substantially all of the assets of an unrelated privately held company NeoForce Group, Inc. (“NeoForce”) in exchange for an upfront cash payment of $1.0 million and royalties on future sales (see Note 15). NeoForce developed innovative pulmonary resuscitation solutions for the inpatient and ambulatory neonatal markets that the Company is now marketing through NFI. 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 to date. The Company’s first diagnostic product, CoSense ® |
Liquidity, Financial Condition
Liquidity, Financial Condition and Management's Plans | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Liquidity, Financial Condition and Management's Plans | Note 2. Liquidity, Financial Condition and Management’s Plans The Company had a net loss of approximately $9.5 million for the nine months ended September 30, 2016 and has an accumulated deficit of approximately $95.7 million at September 30, 2016 from having incurred losses since its inception. The Company has approximately $4.7 million of working capital at September 30, 2016 and used approximately $10.8 million of cash in its operating activities during the nine months ended September 30, 2016. The Company has financed its operations principally through issuances of debt and equity securities. On July 24, 2015, the Company entered into a Common Stock Purchase Agreement (the “Aspire Purchase Agreement”) with Aspire Capital, LLC (“Aspire”) which provides that, upon the terms and subject to the conditions and limitations set forth therein, Aspire 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 Aspire Purchase Agreement. From July 24, 2015 through September 30, 2016, the Company had issued an aggregate of 506,585 shares of Common Stock to Aspire in exchange for approximately $1.4 million. Under the 2016 Sabby Purchase Agreement entered into on June 29, 2016, as described below, the Company is unable to access funds from Aspire Capital pursuant to the Aspire Purchase Agreement until January 24, 2017, 120 days after the date the SEC declared the registration statement effective covering the securities being issued under the 2016 Sabby Purchase Agreement. On October 12, 2015, the Company entered into a Securities Purchase Agreement (the “ 2015 Sabby Purchase Agreement”) with funds managed by Sabby Management, LLC (“Sabby”), to purchase up to $10 million worth of Series A Convertible Preferred Stock (the “Series A Convertible Preferred Stock”). The sale of the Series A Convertible Preferred Stock closed in two separate closings. On October 15, 2015, the date of the first closing, the Company received proceeds of approximately $4.1 million, net of $0.4 million in estimated expenses. On January 8, 2016, the date of the second closing, the Company received proceeds of approximately $5.0 million, net of $0.5 million in estimated expenses. On June 29, 2016, the Company entered into a second Securities Purchase Agreement (the “2016 Sabby Purchase Agreement”) with Sabby, pursuant to which the Company agreed to sell to Sabby, in a private placement, an aggregate of up to 13,780 shares of Series B Convertible Preferred Stock at an aggregate purchase price of $13,780,000, which shares are convertible into 13,780,000 shares of Common Stock (the “Series B Convertible Preferred Stock”), based on a fixed conversion price of $1.00 per share on an as-converted basis. Under the terms of the Series B Convertible Preferred Stock, in no event shall shares of Common stock be issued to Sabby upon conversion of the Series B Convertible Preferred Stock to the extent such issuance of shares of Common Stock would result in Sabby having ownership in excess of 4.99%. In connection with the transactions required under the 2016 Sabby Purchase Agreement, the Company was obligated to repurchase from Sabby an aggregate of 7,780 shares of Series A Convertible Preferred Stock held by Sabby for an aggregate amount of $7,780,000, which shares were originally purchased by Sabby under the 2015 Sabby Purchase Agreement and which shares represent 4,205,405 shares of Common Stock on an as-converted basis. The sale of the Series B Convertible Preferred Stock closed in two separate closings. On July 5, 2016, the date of the first closing, the Company received proceeds of approximately $1.3 million, net of $0.1 million in estimated expenses. On September 29, 2016, the date of the second closing, the Company received proceeds of approximately $4.4 million, net of $0.3 million in estimated expenses. After the repurchase of the Series A Convertible Preferred Stock and estimated transaction expenses, the Company received approximately $5.6 million of net proceeds from the 2016 Sabby Purchase Agreement. The Company expects to continue incurring losses for the foreseeable future and may be required to raise additional capital to pursue its product development initiatives and penetrate markets for the sale of its products. Management believes that the Company’s commercial products, including CoSense, the other neonatology products and Serenz, and the distribution strategies implemented will begin to generate meaningful revenue and corresponding cash in the near term. In addition, the Company has been successful over the last 12 months in raising additional capital including the completed closings pursuant to the 2015 Sabby Purchase Agreement and the 2016 Sabby Purchase Agreement on June 29, 2016. Management believes that the Company will continue to have access to capital resources through possible public or private equity offerings, debt financings, corporate collaborations or other means; however, the Company has not secured any commitment for future financing at this time, nor can it provide any assurance that new financing will be available on commercially acceptable terms, if at all. If the Company is unable to secure additional capital, it may be required to curtail its development of new products and take additional measures to reduce costs in order to conserve its cash in amounts sufficient to sustain operations and meet its obligations. These measures could cause significant delays in the Company’s efforts to commercialize its products, which is critical to the realization of its business plan and the future operations of the Company. These conditions raise substantial doubt about our ability to continue as a going concern. | Note 2. Liquidity, Financial Condition and Management’s Plans The Company had a net loss of $15.9 million for the year ended December 31, 2015 and has an accumulated deficit of approximately $86.2 million at December 31, 2015 from having incurred losses since its inception. The Company has approximately $3.2 million of working capital at December 31, 2015 ($4.1 million of working capital when excluding the Series B warrant liability) and used approximately $10.3 million of cash in its operating activities during the year ended December 31, 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 year ended December 31, 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 Aspire Purchase Agreement (as defined below). During the quarter ended September 30, 2015, the Company issued an aggregate of 506,585 shares of Common Stock to Aspire Capital in exchange for approximately $1.4 million. On October 12, 2015, the Company entered into a Securities Purchase Agreement (the “Sabby Purchase Agreement”) with funds managed by Sabby Management, LLC (“Sabby”), to purchase up to $10 million worth of Series A Convertible Preferred Stock (the “Preferred Stock”). The sale of the Preferred Stock was set to take place in two separate closings. On October 15, 2015, the date of the first closing, the Company received proceeds of approximately $4.1 million, net of $0.4 million in estimated expenses. Upon the second closing, which closed on January 8, 2016, the Company received proceeds of approximately $5.0 million, net of $0.5 million in estimated expenses (see Note 15). The Company may generate future revenue from a variety of sources, including sales of its neonatology products, other diagnostic products, license fees, milestone payments, and research and development payments in connection with potential future strategic partnerships. However, to date, the Company has generated minimal revenue. The Company may never generate revenue that is sufficient to be profitable in the future. If the Company does not generate significant revenue, it may have to raise capital through additional equity or debt financing. The Company’s failure to achieve sustained profitability could depress the value of the Company and could impair the ability to raise capital. Management believes that the Company has sufficient capital resources to sustain operations through at least the next twelve months from the date of this filing. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies There have been no material changes to the significant accounting policies during the nine months ended September 30, 2016 as compared to the significant accounting policies described in Note 3 of the “Notes to Consolidated Financial Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015. Below are those policies with current period updates: 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 consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated 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 consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company’s financial position as of September 30, 2016 and results of its operations for the three and nine months ended September 30, 2016 and 2015 and cash flows for the nine months ended September 30, 2016 and 2015. 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 consolidated financial statements and the related notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K. 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, liability and equity instruments, stock-based compensation, acquired intangibles, contingent earn-out consideration, and allowances for accounts receivable and inventory. Inventory As of December 31, 2015 and September 30, 2016, the Company’s inventory was comprised of the following (in thousands): September 30, December 31, Raw materials $ 385 $ 106 Work-in-process 164 399 Finished goods 154 46 Total inventory $ 703 $ 551 Inventory is stated at the lower of cost or market under the first-in, first-out (FIFO) method. The Company recorded a lower of cost or market write down to inventory of $72 thousand during the nine months ended September 30, 2016. Intangible Assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range in term from 5 to 12 years. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life. Goodwill The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting unit’s carrying value to its implied fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Company determines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. There was no impairment of goodwill for the nine months ended September 30, 2016. Such goodwill is not deductible for tax purposes and represents the value placed on entering new markets and expanding market share. 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. Due to certain provisions contained in the Series B Warrant agreement that provides for the Company potentially issuing an unlimited number of shares upon exercise, the Company had adopted a sequencing policy that reclassified contracts, with the exception of stock options, from equity to assets or liabilities for those with the latest inception date first. The Company had evaluated the issuance of securities as to reclassification as a liability under this sequencing policy through February 12, 2016, the date that the Series B Warrants expired. Recent Accounting Pronouncements There have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2016 as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 that are of significance or potential significance to the Company. | Note 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying 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”). 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 subsidiaries. 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, the valuation of liabilities and equity instruments, stock-based compensation, value and life of acquired intangibles, and allowances for accounts receivable and inventory. 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 December 31, 2015 and December 31, 2014. The Company expects this to continue. Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting, making operating decisions, and assessing financial performance. All long-lived assets are maintained in the United States of America. 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. Accounts Receivable Accounts receivable as of December 31, 2015 consist of balances due from customers in the normal course of business. The Company did not record an allowance for doubtful accounts as this balance was deemed fully collectible. Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of payments primarily related to insurance and short-term deposits. Prepaid expenses are initially recorded upon payment and are expensed as goods or services are received. Inventory Inventory as of December 31, 2014 consisted of raw materials to be used in the manufacture of our products. As of December 31, 2015, the Company’s inventory includes approximately $106,000 of raw material, $398,000 of work-in-process and $46,000 of 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. The Company made the first installment of $100,000 on December 21, 2015. The remaining $200,000 payable under this agreement has been included in Accrued compensation and other current liabilities on the balance sheet. 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 an intangible asset on its consolidated balance sheet, and is amortizing the fair value over the remaining useful life of the patent. In July 2015, the Company also entered into a consulting agreement with an affiliate of BDDI. As part of this consulting agreement the Company issued 10,000 shares to the affiliate of BDDI. Business Combinations For business combinations the Company utilizes the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The Company recognizes separately from goodwill the fair value of assets acquired and the liabilities assumed. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the acquisition date fair values of the assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, the Company’s estimates are subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may retroactively record adjustments to the fair value of the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. Property and Equipment, Net Property and equipment are stated at cost net of accumulated depreciation and amortization calculated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value. Intangible Assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range in term from 5 to 12 years. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life. Intangible assets consist of the following at December 31, 2015: Amount Accumulated Net Amount Useful Lives Patents and trademarks $ 697,890 $ (32,155 ) $ 665,735 5-12 Customer contracts 259,730 (8,658 ) 251,072 10.00 Total $ 957,620 $ (40,813 ) $ 916,807 Future amortization expense for intangible assets over their remaining useful lives is as follows: Year ending December 31: Patents and Customer contracts Total Amortization 2016 $ 73,370 $ 25,973 $ 99,343 2017 73,370 25,973 99,343 2018 73,370 25,973 99,343 2019 73,370 25,973 99,343 2020 and thereafter 372,255 147,180 519,435 Total $ 665,735 $ 251,072 $ 916,807 Goodwill The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting unit’s carrying value to its implied fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Company determines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. There was no impairment of goodwill for the year ended December 31, 2015. Such goodwill is not deductible for tax purposes and represents the value placed on entering new markets and expanding market share. Revenue Recognition The Company began recognizing sales of CoSense during the year ended December 31, 2015. In addition, the Company began recognizing sales of NFI pulmonary resuscitation products after the acquisition of Neoforce’s assets in September 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 offers 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. The Company also recognized revenue related to a government grant awarded during the year ended December 31, 2015. 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. 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 $220,000 incurred and reimbursed under the government grant awarded in the year ended December 31, 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. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts recorded for income tax purposes. Deferred income taxes are classified as current or non-current, based on the classifications of the related assets and liabilities giving rise to the temporary differences. A valuation allowance is provided against the Company’s deferred income tax assets when their realization is not reasonably assured. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. Convertible Preferred Stock and other Hybrid Instruments The Company’s convertible preferred stock was classified as permanent equity on its balance sheet in accordance with authoritative guidance for the classification and measurement of hybrid securities and distinguishing liability from equity instruments. The preferred stock is not redeemable at the option of the holder. Further, the Company evaluated its Series A Convertible Preferred Stock and determined that it is considered an equity host under ASC 815, Derivatives and Hedging 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. 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. Stock-Based Compensation For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the estimated fair value on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. The determination of fair value for stock-based awards on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables. Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the Black-Scholes option pricing model, as they are earned. The awards generally vest over the time period the Company expects to receive services from the non-employee. 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 In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases. 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. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value Disclosures [Abstract] | ||
Fair Value of Financial Instruments | Note 4. 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. 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 September 30, 2016 Total Level 1 Level 2 Level 3 Assets Money market fund $ 4,879 $ 4,879 $ — $ — Liabilities Series A warrant liability $ 509 $ 509 $ — $ — Series C warrant liability 115 — — 115 Total liabilities $ 624 $ 509 $ — $ 115 Fair Value Measurements at December 31, 2015 Total Level 1 Level 2 Level 3 Assets Money market fund $ 3,804 $ 3,804 $ — $ — Liabilities Series A warrant liability $ 1,213 $ 1,213 $ — $ — Series B warrant liability 865 — — 865 Series C warrant liability 462 — — 462 Total common stock warrant liability $ 2,540 $ 1,213 $ — $ 1,327 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 is listed on and obtained from NASDAQ. Accordingly, the fair value of Series A Warrants is a Level 1 measurement. The fair value measurements of the Series B and Series C Warrants are based on significant inputs that are unobservable and thus represent Level 3 measurements. 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 5). 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 5). The Level 3 estimates are based, in part, on subjective assumptions. The agreement to pay the annual royalty in the NeoForce acquisition resulted in the recognition of a contingent consideration, which was recognized on the acquisition date. Subsequent changes to estimates of the amount of contingent consideration to be paid will be recognized as charges or credits in the statement of operations. The fair value of the contingent consideration is based on preliminary cash flow projections, growth in expected product sales and other assumptions. Based on the assumptions, the fair value of the royalty obligation was determined to be $153 thousand at the date of acquisition and $188 thousand as of September 30, 2016. The fair value of the royalty obligation was determined by applying the income approach, using several significant unobservable inputs for projected cash flows and a discount rate of 20% commensurate with the Company’s cost of capital and expectation of the revenue growth for products at their life cycle stage. These inputs are considered Level 3 inputs under the fair value measurements and disclosure guidance. On January 13, 2016 we entered into an agreement to sublease our excess space located in Redwood City. By the end of February we removed all equipment, furniture and fixtures being stored in this excess space and ceased use of this space. The fair value of the cease-use liability was calculated using the remaining lease payments, offset by future sub-lease payments, offset by deferred rent amortization, and discounted to present value using our current cost of capital of 20%. These inputs are considered Level 3 inputs under the fair value measurements and disclosure guidance. 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 warrants, which are treated as liabilities, as follows (dollars in thousands): Series A Warrant Series B Warrant Series C Warrant Number of Liability Number of Liability Number of Liability Balance at December 31, 2015 2,425,605 $ 1,213 116,580 $ 865 590,415 $ 462 Change in value of Series A Warrants — (704 ) — — — — De-recognition of Series B Warrant liability upon cashless exercise of warrants (485,202 shares issued) — — (102,300 ) (593 ) — — De-recognition of Series B Warrant liability upon expiration — — (14,280 ) — — — Change in value of Series B Warrants — — — (272 ) — — Change in value of Series C Warrants — — — — — (347 ) Balance at September 30, 2016 2,425,605 $ 509 — $ — 590,415 $ 115 | Note 4. 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 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, 2015 Total Level 1 Level 2 Level 3 Assets Money market fund $ 3,803,929 $ 3,803,929 — — Liabilities Series A warrant liability 1,212,803 1,212,803 — — Series B warrant liability 865,000 — — 865,000 Series C warrant liability 462,437 — — 462,437 Total common stock warrant liability $ 2,540,240 $ 1,212,803 — $ 1,327,437 Fair Value Measurements at December 31, 2014 Total Level 1 Level 2 Level 3 Assets Money market fund $ 7,891,888 $ 7,891,888 $ — $ — Liabilities Series A warrant liability 857,362 857,362 — — Series B warrant liability 17,438,731 — — 17,438,731 Total common stock warrant liability $ 18,296,093 $ 857,362 — $ 17,438,731 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 is listed on and obtained from NASDAQ. Accordingly, the fair value of Series A Warrants is a Level 1 measurement. The fair value measurements of the Series B and Series C Warrants are based on significant inputs that are unobservable and thus represent Level 3 measurements. 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 Balance at December 31, 2014 2,449,605 $ 857,362 2,449,605 $ 17,438,731 — $ — Change in value of Series A Warrants — 397,441 — — — — De-recognition of Series A Warrant liability upon exercise (24,000 ) (42,000 ) — — — — De-recognition of Series B Warrant liability upon cash exercise of 619,512 warrants in Private Transaction (619,512 shares issued) — — (619,512 ) (6,747,765 ) — — De-recognition of Series B Warrant liability upon cashless exercise of 1,713,045 warrants (5,879,560 shares issued) — — (1,713,045 ) (12,527,991 ) — — De-recognition of Series B Warrant liability upon contribution of 468 warrants back to the Company — — (468 ) (3,332 ) — — Change in value of Series B Warrants — — — 2,705,357 — — Record Series C Warrant Liability as inducement charge (589,510 warrants in Private Transaction, 905 warrants in tender offer) — — — — 590,415 3,049,375 Change in value of Series C Warrants — — — — — (2,586,938 ) Balance at December 31, 2015 2,425,605 $ 1,212,803 116,580 $ 865,000 590,415 $ 462,437 |
Warrant Liabilities
Warrant Liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Text Block [Abstract] | ||
Warrant Liabilities | Note 5. Warrant Liabilities Warrants terms The Company has issued Series A Warrants, Series B Warrants and Series C Warrants (the “Warrants”). The Company’s 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 Company’s cash or cash equivalents 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 The Company classified the 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. The Series B Warrants expired on February 12, 2016. 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 unit offering offered in the Company’s initial public offering (“IPO”) in November 2014. 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 Series A Warrants are publicly traded, the Company uses the closing price on the measurement date to determine the fair value of these the Series A Warrants. Since their issuance, a total of 24,000 Series A Warrants have been exercised. As of September 30, 2016, the fair value of the 2,425,605 outstanding Series A Warrants was approximately 509 thousand, and the decrease of $704 thousand in fair value during the nine months ended September 30, 2016 was recorded as other income in the statement of operations. Series B Warrants The Company issued 2,449,605 Series B Warrants to purchase shares of its Common Stock at an exercise price of $6.50 per share in connection with the IPO. Between January 1, 2016 and the expiration date of the Series B Warrants of February 12, 2016, certain holders of Series B warrants cashless exercised a total of 102,300 Series B Warrants resulting in the issuance of 485,202 shares of Common Stock and the derecognition of approximately $593 thousand in Series B Warrant liability. The remaining Series B Warrant liability was reduced to zero upon expiration resulting in the recording of $272 thousand in other income in the statement of operations. The remaining Series B Warrants expired unexercised on February 12, 2016. 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 589510 shares of the Company’s Common Stock at an exercise price of $6.50 per share, resulting in the de-recognition of $6.7 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. 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 5, 2020. The tender offer was extended to Series B Warrant holders under a registration statement filed with the SEC on Form S-4, which was declared effective on June 25, 2015 and expired on July 24, 2015. During July 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 the Company’s Common Stock, the issuance of 905 Series C Warrants and proceeds to the Company of $5,882. The Series C Warrants are exercisable into 590,415 shares of the Company’s Common Stock. As of September 30, 2016, the fair value of the Series C Warrants was determined to be $115 thousand. The decline in the fair value of the Series C Warrants of $347 thousand in the nine months ended September 30, 2016 was recorded as other income in the consolidated 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: September 30, December 31, Volatility 90 % 90 % Expected Term (years) 3.42 4.17 Expected dividend yield — % — % Risk-free rate 0.93 % 1.76 % | 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. (see Note 15) 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 December 31, 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 year ended December 31, 2015, a total of 24,000 Series A Warrants were exercised. As of December 31, 2015, the fair value of the 2,425,605 outstanding Series A warrants was approximately $1.2 million, and the increase of $0.4 million in fair value during the year ended December 31, 2015 was recorded as other expense 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 at an exercise price of $6.50 per share in connection with the IPO unit described in Note 2. The Series B Warrants are exercisable at any time prior to the expiration of the 15-month term on February 12, 2016. 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 upon exercise. As of December 31, 2015 and December 31, 2014 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, December 31, 2014 Volatility 90 % 87 % Expected Term (years) 0.12 1.10 Expected dividend yield — % — % Risk-free rate 0.65 % 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 on future operating results. The net decrease in carrying amount of the Series B Warrants for the year ended December 31, 2015 was $16.6 million, of which $2.7 million was attributed to the change in fair value of the warrant liability during the three months ended December 31, 2015 and was recorded as other expense in the consolidated statement of operations. Factors contributing to the change in fair value of the warrants include the trading price of the Common Stock and term remaining to expiration of the warrants. During the year ended December 31, 2015, certain holders of Series B warrants cashless exercised a total of 1,713,045 warrants resulting in the issuance of 5,879,560 shares of Common Stock and the derecognition of approximately $12.5 million, in Series B Warrant liability, respectively for the year ended December 31, 2015, 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 $6.7 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 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: December 31, March 5, 2015 Volatility 90 % 86 % Expected Term (years) 4.17 5.00 Expected dividend yield — % — % Risk-free rate 1.76 % 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 5, 2020. The tender offer was extended to warrant holders under a registration statement filed with the SEC on Form S-4, which was declared effective on June 25, 2015 and expired on July 24, 2015. During July 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. The new Series C Warrants are exercisable into 590,415 shares of the Company’s Common Stock. As of December 31, 2015, the fair value of the Series C Warrants was determined to be $0.5 million. The decline in the fair value of the warrants of $2.6 million in the year ended December 31, 2015 was recorded as other income in the consolidated statement of operations. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and Contingencies | Note 6. Commitments and Contingencies Facility Leases 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 became part of the new lease agreement on March 1, 2016. The Company leases office space 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 subleased this facility in January 2016 and ceased use of the facility in March 2016 (See Note 4). The Company also leases approximately 2,100 square feet of office space for its operations in Ivyland, Pennsylvania under a month-to-month lease. Rent expense was $462 thousand and $221 thousand during the nine months ended September 30, 2016 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 connection with the acquisition of the assets of NeoForce, the Company agreed to pay the former NeoForce shareholder an annual royalty payment for a period of 36 months. The agreement to pay the annual royalty resulted in the recognition of a contingent consideration, which was recognized at the closing of the transaction, and subsequent changes to estimate of the amounts of contingent consideration to be paid will be recognized as charges or credits in the statement of operations. The fair value of the contingent consideration is based on preliminary cash flow projections, growth in expected product sales and other assumptions. Based on the assumptions, the fair value of the royalty obligation was determined to be $153 thousand at the date of acquisition and $188 thousand at September 30, 2016. The long-term portion of the royalty obligation, $144 thousand, is classified as part of other long-term liabilities while the remaining current portion is included in accrued compensation and other current liabilities. | Note 8. Commitments and Contingencies Facility Leases 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 became part of the new lease agreement on March 1, 2016 (see Note 15). The Company leases office space 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 subleased this facility in January 2016 (see Note 15). The Company also leases approximately 2,100 square feet for its operations in Ivyland, Pennsylvania under a month-to-month lease (see Note 15). Minimum rental commitments under all noncancelable leases with an initial term in excess of one year as of December 31, 2015 were as follows: Year ending December 31: Operating Leases 2016 $ 698,945 2017 750,118 2018 629,923 2019 334,747 Total $ 2,413,733 The table above does not consider the impact of lease payments the Company will receive under the sublease executed in January 2016 (see Note 15). Rent expense was $375,000 and $230,000 during the years ended December 31, 2015 and 2014, 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 connection with the acquisition of the assets of NeoForce, the Company agreed to pay the former NeoForce shareholder an annual royalty payment for a period of 36 months. The agreement to pay the annual royalty resulted in the recognition of a contingent consideration, which is recognized at the inception of the transaction, and subsequent changes to estimate of the amounts of contingent consideration to be paid will be recognized as charges or credits in the statement of operations. The fair value of the contingent consideration is based on preliminary cash flow projections, growth in expected product sales and other assumptions. Based on the assumptions, the fair value of the Royalty was determined to be $153,000 at the date of acquisition and at December 31, 2015 (see Note 13). |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Stockholders' Equity | Note 7. Stockholders’ Equity Convertible Preferred Stock The Company is authorized to issue 10,000,000 shares of Preferred Stock. The Company issued a total of 10,000 Series A Convertible Preferred Stock under the 2015 Sabby Purchase Agreement, with a par value of $0.001 and a stated value of $1,000 per share. The Series A Convertible Preferred Stock did not have an expiration date and were not redeemable at the option of the holders. During the three months ended March 31, 2016 and June 30, 2016, the holders of the Series A Convertible Preferred Stock converted 1,665 and 555, respectively, shares of Series A Convertible Preferred Stock resulting in the issuance of 900,000 and 300,000 shares of Common Stock, respectively. Under the 2016 Sabby Purchase Agreement, the remaining 7,780 shares of Series A Convertible Preferred Stock were repurchased. The Company has issued a total of 13,780 Series B Convertible Preferred Stock under the 2016 Sabby Purchase Agreement, with a par value of $0.001 and a stated value of $1,000 per share. Under the terms of the Series B Convertible Preferred Stock, in no event shall shares of Common stock be issued to Sabby upon conversion of the Series B Convertible Preferred Stock to the extent such issuance of shares of Common Stock would result in Sabby having ownership in excess of 4.99%. The Series B Convertible Preferred Stock do not have an expiration date and are not redeemable at the option of the holders. In connection with each close of the Series B Convertible Preferred Stock, the Company was obligated to repurchase the remaining outstanding Series A Convertible Preferred Stock at the original issuance price. In addition, the exercise price of the existing Series D Warrants originally issued in conjunction with the 2015 Sabby Purchase Agreement was reduced from $2.46 to $1.75 per share on the effective date of the 2016 Sabby Purchase Agreement. The Company has recognized the repurchase of the Series A Convertible Preferred Stock as an extinguishment of the Series A Convertible Preferred Stock. The Company compared the fair value of the Series B Convertible Preferred Stock immediately after the two close dates under the 2016 Sabby Purchase Agreement to the carrying value of the Series A Convertible Preferred Stock immediately prior to the two close dates under the 2016 Sabby Purchase Agreement. The Company recorded the excess of the aggregate fair value of the Series B Convertible Preferred Stock, $3.4 million, as a loss on extinguishment. In addition, the Company estimated the effect of modifying the exercise price on the existing Series D warrants to be $203 thousand. The Company therefore recorded a total of $3.7 million extinguishment loss to net loss applicable to common stockholders. 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 4 years from the vesting date. The contractual term of an option is no longer than 5 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. The Company recognized stock-based compensation expense related to options granted to employees for the nine months ended September 30, 2016 and 2015 of $560 thousand and $746 thousand, respectively. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the statements of operations for stock-based compensation arrangements as of September 30, 2016 and September 30, 2015. Stock compensation expense (in thousands) was allocated between departments as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Research & Development $ 41 $ 27 $ 116 $ 99 Sales & Marketing 11 17 22 51 General & Administrative 154 100 422 596 Total $ 206 $ 144 $ 560 $ 746 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 September 30, 2016 there were no purchases by employees under this plan. Series D Warrants As part of the 2015 Sabby Purchase Agreement, the Company previously issued 2,810,811 Series D Warrants, with an exercise price of $2.46, which the exercise price of 2,702,704 Series D Warrants were subsequently amended to $1.75 per share and a term of five years expiring on October 15, 2020. The exercise price of the remaining 108,108 Series D Warrants issued to Maxim LLC, as placement agent, was $2.46, and are exercisable beginning on April 15, 2016 and through and including October 15, 2020. The Company’s Series D 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 Series D Warrant agreement further provides for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Series D 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 this securities agreement and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the proceeds to the registration payment arrangement. The Series D Warrant agreement specifically provides that under no circumstances will the Company be required to settle any Series D Warrant exercise for cash, whether by net settlement or otherwise. As part of the 2016 Sabby Purchase Agreement, the Company issued to Maxim LLC, as its placement agent, 120,000 Series D Warrants, with an exercise price of $1.75 and a term of five years expiring in July and September of 2021. Accounting Treatment The Company accounts for the Series D Warrants in accordance with the guidance in ASC 815 Derivatives and Hedging Other Common Stock Warrants As of September 30, 2016, the Company had 480147 Common Stock warrants outstanding originally issued in conjunction with the 2010/2012 convertible notes, with an exercise price of $4.87 and a term of 10 years expiring in November 2024. The Company also has outstanding 9,259 Common Stock warrants issued in 2009, with an exercise price of $21.60 and a term of 10 years, expiring in January 2019 and 82,500 Common Stock warrants issued to the underwriter in our IPO, with an exercise price of 7.14 and a term of 10 years, expiring in November 2024. |
Net loss per share
Net loss per share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Net loss per share | Note 8. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted-average number of Common Stock actually outstanding during the period. Diluted net loss per share is computed by dividing net 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 months ended September 30, 2016 and 2015 and the nine months ended September 30, 2016 and 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 potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in Common Stock equivalent shares): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Convertible preferred stock of 13,780 shares 13,780,000 — 13,780,000 — Warrants issued to 2010/2012 convertible note holders to purchase common stock 480,147 480,147 480,147 480,147 Options to purchase common stock 2,938,152 1,863,171 2,938,152 1,863,171 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 82,500 82,500 Series A Warrants to purchase common stock 2,425,605 2,425,605 2,425,605 2,425,605 Series B Warrants to purchase common stock — 527,573 — 527,573 Series C Warrants to purchase common stock 590,415 590,415 590,415 590,415 Series D Warrants to purchase common stock 2,930,812 — 2,930,812 — | Note 12. Net loss per share Basic net loss per share is computed by dividing net loss by the weighted-average number of Common Stock actually outstanding during the period. Diluted net loss per share is computed by dividing net 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 year ended December 31, 2015 and 2014, 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 potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in Common Stock equivalent shares): As of December 31, 2015 2014 Convertible preferred stock 2,462,162 — Warrants issued to 2010/2012 convertible note holders to purchase common stock 480,147 523,867 Options to purchase common stock 1,858,839 1,072,011 Warrants issued in 2009 to purchase common stock 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 2,449,605 Series B warrants to purchase common stock 116,580 2,449,605 Series C warrants to purchase common stock 590,415 — Series D warrants to purchase common stock 1,280,324 — |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 9. Subsequent Events On October 24, 2016, the Company received a letter from the Listing Qualifications Department of the Nasdaq Stock Market (“Nasdaq”) indicating that, based upon the closing bid price of the Company’s common stock for the last 30 consecutive business days, the Company did not meet the minimum bid price of $1.00 per share required for continued listing on Nasdaq pursuant to Nasdaq Listing Rule 5550(a)(2). The letter also indicated that the Company will be provided with a compliance period of 180 calendar days, or until April 24, 2017, in which to regain compliance pursuant to Nasdaq Listing Rule 5810(c)(3)(A). The letter further provided that if, at any time during the 180-day period, the closing bid price of the Company’s common stock is at least $1.00 for a minimum of ten consecutive business days, Nasdaq will provide the Company with written confirmation that it has achieved compliance with the minimum bid price requirement. If the Company does not regain compliance by April 24, 2017, an additional 180 days may be granted to regain compliance if the Company (i) meets the continued listing requirement for market value of publicly held shares and all other initial listing standards for Nasdaq (except for the bid price requirement) and (ii) provides written notice of its intention to cure the deficiency during the second 180-day compliance period. On November 7, 2016, the two funds managed by Sabby converted 200 shares of their Series B Convertible Stock into 200,000 shares of Common Stock. | Note 15. Subsequent Events On January 5, 2016, January 27, 2016 and March 16, 2016, the two funds managed by Sabby converted 1,665 shares of their Series A Convertible Stock into 900,000 shares of Common Stock. On January 8, 2016, the Company completed the second closing under the Sabby Purchase Agreement entered into on October 12, 2015 with funds managed by Sabby. The Company issued 5,445 shares of Series A Convertible Preferred Stock with a stated value of $1,000 per share and par value of $0.001. In addition, the Company issued 1,471,622 Series D Warrants to the funds managed by Sabby and 58,865 Series D Warrants to Maxim Group, LLC as underwriter. The Company received proceeds of approximately $5 million, net of $0.5 million in estimated expenses. On January 11, 2016, the Company received a letter from Nasdaq indicating that the Company had regained compliance with the Nasdaq Listing Requirements. On January 13, 2016, the Company entered into agreement to sublease its old office space at 3 Twin Dolphin Dr. The Company occupied this space as its corporate headquarters until August 1, 2015. On January 26, 2016, the Company entered into a distribution agreement with Bemes, Inc., a leading medical equipment Master Distributor, to market and distribute CoSense and Precision Sampling Sets. Under the terms of the agreement, Bemes will have the exclusive right for sales, marketing, distribution and field service activities for CoSense in the United States. On February 12, 2016, the Series B Warrants expired. On December 31, 2015, the Company had 116,580 Series B Warrants outstanding. Subsequent to December 31, 2015, a number of different Series B warrant holders exercised on a cashless basis 102,300 Series B Warrants and as a result the Company issued 485,202 shares of Common Stock. The remaining 14,280 Series B Warrants expired on February 12, 2016. On February 12, 2016, the Company entered into an amendment and extension of its lease dated January 13, 2006 at 35 Commerce Drive in Ivyland, Pennsylvania. The amendment and extension effective as of March 1, 2016, includes additional space at 34 Commerce Drive and expires on March 31, 2017. |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Note 5. Property and Equipment, Net Property and equipment consisted of the following: December 31, December 31, Furniture and fixtures $ 236,366 $ 180,238 Computer hardware 52,112 27,555 Leasehold improvements 9,117 10,726 $ 297,595 $ 218,519 Less accumulated depreciation and amortization (211,850 ) (160,912 ) Total $ 85,745 $ 57,607 Depreciation expense was $67,415 and $28,516 for the fiscal years ended December 31, 2015 and December 31, 2014, respectively. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2015 | |
Debt Disclosure [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 the 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 year ended December 31, 2015, the Company repaid the outstanding amounts borrowed under the line of credit. |
Capital Stock
Capital Stock | 12 Months Ended |
Dec. 31, 2015 | |
Equity [Abstract] | |
Capital Stock | Note 9. Capital Stock Common Stock: The Company is authorized to issue 100,000,000 shares of common stock as of December 31, 2014 with a par value of $0.001 per share. Each share of common stock is entitled to one vote. The holders of common stock are also entitled to receive dividends whenever funds are legally available and when and if declared by the Board of Directors, subject to the prior rights of all classes of stock outstanding. The holders of common stock, voting as a separate class, are entitled to elect one member of the Board of Directors. Convertible Preferred Stock The Company is authorized to issue 40,000 shares of Series A Convertible Preferred Stock. The Company has issued 4,555 Series A Convertible Preferred Stock, with a par value of $0.001 and a stated value of 1,000 per share. The Series A Convertible Preferred Stock do not have an expiration date and are not redeemable. The Series A Convertible Preferred Stock was classified as permanent equity on the Company’s consolidated balance sheet in accordance with authoritative guidance for the classification and measurement of hybrid securities and distinguishing liability from equity instruments. The preferred stock is not redeemable at the option of the holder. Further, the Company evaluated its Series A Convertible Preferred Stock and determined that it is considered an equity host under ASC 815, Derivatives and Hedging The Company accounts for the Series A Convertible Preferred Stock in accordance with the guidance in ASC 815 Derivatives and Hedging The Company evaluated the liquidated damages provisions in the terms of this securities agreement and determined that it is probable that the Company will maintain an effective registration statement and have sufficient shares upon conversion and has therefore not recorded a liability for potential liquidated damages. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stockholders' Equity (Deficit) | Note 10. Stockholders’ Equity (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 4 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. The Company recognized stock-based compensation expense related to options granted to employees for the fiscal years ended December 31, 2015 and 2014 of $942,369 and $345,435, respectively. The compensation expense is allocated on a departmental basis, based on the classification of the option holder. No income tax benefits have been recognized in the statements of operations for stock-based compensation arrangements as of December 31, 2015 and December 31, 2014. Stock compensation expense was allocated between departments as follows; Year ended December 31, December 31, Research & Development $ 148,948 $64,020 Sales & Marketing 62,533 8,335 General & Administrative 730,888 273,080 Total $ 942,369 $ 345,435 The Company granted options to purchase 955,713 and 926,384 of the Company’s common stock in 2015 and 2014. The fair value of each award granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for the year ended December 31, 2015: Year Ended December 31, December 31, Expected life (years) 6.1 5.8 - 6.1 Risk-free interest rate 1.6% - 1.7 % 1.6% - 1.8 % Volatility 56% - 66 % 43% - 59 % Dividend rate — % — % Expected volatility is based on volatilities of a group of public companies operating in the Company’s industry. The expected life of stock options represents the average of the contractual term of the options and the weighted-average vesting period, as permitted under the simplified method. The Company has elected to use the simplified method, as the Company does not have enough historical exercise experience to provide a reasonable basis upon which to estimate the expected term and the stock option grants are considered “plain vanilla” options. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant. The following table summarizes stock option transactions for the years ended December 31, 2015 and 2014 as issued under the Plans: Shares Number of Weighted- Weighted Balance at December 31, 2013 124,824 239,606 $ 3.36 2014 Plan authorized 1,437,165 — — Closed 2010 Plan (123,523 ) — — Options granted (926,384 ) 926,384 7.15 Options canceled/forfeited 93,979 (93,979 ) 6.75 Balance at December 31, 2014 606,061 1,072,011 6.34 8.67 Additional shares authorized 270,764 — — Options granted (955,713 ) 955,713 3.08 Options exercised — (83,848 ) 3.50 Options canceled/forfeited 85,037 (85,037 ) 5.03 Balance at December 31, 2015 6,149 1,858,839 $ 4.82 8.75 Options vested at December 31, 2014 — 578,889 $ 5.58 7.46 Options vested and expected to vest at December 31, 2014 — 1,072,011 $ 6.34 8.67 Options vested at December 31, 2015 — 922,927 $ 5.06 7.47 Options vested and expected to vest at December 31, 2015 — 1,858,839 $ 4.82 8.75 The weighted-average grant date fair value of employee options granted was $1.66 and $1.03 per share for the year ended December 31, 2015 and December 31, 2014, respectively. At December 31, 2015 total unrecognized employee stock-based compensation was $1,917,245, which is expected to be recognized over the weighted-average remaining vesting period of 2.5 years. As of December 31, 2015, the outstanding stock options had an intrinsic value of $67,165. 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 December 31, 2015 there were no purchases by employees under this plan. Series D Warrants The Company has issued 1,280,324 Series D Warrants, with an exercise price of $2.46 and a term of five years expiring on October 15, 2020. The Company’s Series D 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 Series D Warrant agreement further provides for the payment of liquidated damages at an amount per month equal to 1% of the aggregate VWAP of the shares into which each Series D 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 this securities agreement and determined that it is probable that the Company will maintain an effective registration statement and has therefore not allocated any portion of the proceeds to the registration payment arrangement. The Series D Warrant agreement specifically provides that under no circumstances will the Company be required to settle any Series D Warrant exercise for cash, whether by net settlement or otherwise. Accounting Treatment The Company accounts for the Series D Warrants in accordance with the guidance in ASC 815 Derivatives and Hedging Other Common Stock Warrants As of December 31, 2015, the Company had 480,147 Common Stock warrants outstanding from the 2010/2012 convertible notes, with an exercise price of $4.87 and a term of 10 years expiring in November 2024. During the year ended December 31, 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, with an exercise price of $21.60 and a term of 10 years, expiring in January 2019 and 82,500 Common Stock warrants issued to the underwriter in our IPO, with an exercise price of $7.14 and a term of 10 years, expiring in November 2024. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 11. Income Taxes Due to net losses in 2015 and 2014, the Company had no material current, deferred, or total income tax expense in the years ended December 31, 2015 and 2014. A reconciliation of income tax expense with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows: Years Ended December 31, 2015 2014 Tax on the loss before income tax expense computed at the federal statutory rate of 34% $ (5,408,551 ) $ (4,717,063 ) State tax (benefit) at statutory rate, net of federal benefit (928,107 ) (13,020 ) Change in Valuation Allowance 4,199,154 1,578,347 Change in research and development credits (60,991 ) 316,311 Change in fair value of warrants 1,493,215 2,960,766 Other 705,280 (125,341 ) Income tax expense $ — $ — Effective income tax rate — % — % Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31, 2015 and 2014: December 31, 2015 2014 Non-Current Deferred Tax Assets: Reserves and accruals $ 287,850 $ 71,953 Net Operating Loss Carryforwards 26,174,912 22,125,807 Research and development credits 1,381,296 1,345,833 Intangible Assets (74,113 ) 46,784 Fixed Assets 9,080 (10,505 ) Total Non-Current Deferred Tax Assets 27,779,025 23,579,872 Valuation Allowance (27,779,025 ) (23,579,872 ) Net Deferred Tax Assets $ — $ — The Company has recorded a full valuation allowance against its net deferred tax assets as it believes that it is more likely than not that such assets will not be realized. The valuation allowance increased by $4,199,154 from December 31, 2014 to December 31, 2015 primarily due to the generation of current year net operating losses and research and development credits claimed. As of December 31, 2015, the Company had $67,263,865 of federal and $56,650,176 of state net operating loss, respectively, available to offset future taxable income. The federal net operating loss carryforwards begins to expire in 2019 and the state net operating loss carryforwards will begin to expire in 2016, if not utilized. As of December 31, 2015, the Company also had $1,328,082 of federal and $977,574 of state research and development credit carryforwards, respectively. The federal research and development credit carryforward begins to expire in 2024 and the state research and development credit can be carried forward indefinitely. In addition, the use of net operating loss and tax credit carryforwards may be limited under Section 382 of the Internal Revenue Code in certain situations where changes occur in the stock ownership of a company. In the event that the Company has had a change in ownership, utilization of the carryforwards could be restricted. The following tables summarize the activities of gross unrecognized tax benefits: December 31, 2015 2014 Beginning balance 673,247 — Increase related to prior year tax positions — 628,383 Decreases related to prior year tax positions (13,207 ) — Increase related to Current year tax positions 31,657 44,864 Decreases related to current year tax positions — — Ending Balance $ 691,697 $ 673,247 The amount of unrecognized tax benefits that would impact the effective tax rate were approximately none and none as of December 31, 2015 and December 31, 2014, respectively. As of December 31, 2015, $691,697 of unrecognized tax benefits would be offset by a change in valuation allowance. The Company files income tax returns in the U.S. federal jurisdiction and certain state jurisdictions. In the normal course of business, the Company is subject to examination by federal, state and local jurisdictions, where applicable. In the U.S federal jurisdiction, tax years 1999 forward remain open to examination, and in the state tax jurisdiction, years 2005 forward remain open to examination. The Company is currently not under audit by any federal, state or local jurisdiction. During November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes The Protecting Americans from Tax Hikes (PATH) Act (“Act”) (H.R 2029) was signed into law on December 18, 2015. The Act contains a number of provisions including, most notably, permanent extension of the United States federal research tax credit. The Act did not have a material impact on the Company’s effective tax rate for fiscal 2015 due to the effect of the valuation allowance on the Company’s deferred tax assets. The Company uses the “more likely than not” criterion for recognizing the tax benefit of uncertain tax positions and to establish measurement criteria for income tax benefits. The Company has determined it has no material unrecognized assets or liabilities related to uncertain tax positions as of December 31, 2015. The Company does not anticipate any significant changes in such uncertainties and judgments during the next 12 months. In the event the Company should need to recognize interest and penalties related to unrecognized tax liabilities, this amount will be recorded as a component of other expense. |
NeoForce Group, Inc. Acquisitio
NeoForce Group, Inc. Acquisition | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
NeoForce Group, Inc. Acquisition | Note 13. NeoForce Group, Inc. Acquisition On September 8, 2015, the Company through its wholly owned subsidiary Neoforce, Inc (“NFI”), acquired substantially all of the assets of NeoForce in exchange for an upfront cash payment of $1.0 million. In addition, the Company agreed to pay the former NeoForce shareholder an annual royalty payment for a period of 36 months (“Royalty”) in the low single digits based on net sales of NeoForce products that were acquired by the Company. As of December 31, 2015, the Company recorded $8,372 of Royalty payable. The acquisition of NeoForce strengthens the Company’s commitment to leveraging technology to address unmet needs in neonatology, which is a high growth segment in the healthcare business. The Company plans to leverage the expertise and hospital relationships of NeoForce to accelerate the adoption of CoSense. The transaction has been accounted for as a business combination under the acquisition method of accounting. Accordingly, the tangible assets and identifiable intangible assets acquired and liabilities assumed have been recorded at fair value, with the remaining purchase price recorded as goodwill. The fair values of current assets and liabilities approximated their book value. The fair values of acquired assets and liabilities are based on preliminary cash flow projections and other assumptions. The fair values of acquired intangible assets were determined using several significant unobservable inputs for projected cash flows and a discount rate. These inputs are considered Level 3 inputs under the fair value measurements and disclosure guidance. The agreement to pay the annual Royalty resulted in the recognition of a contingent consideration, which is recognized at the inception of the transaction, and subsequent changes to estimate of the amounts of contingent consideration to be paid will be recognized as charges or credits in the statement of operations. The fair value of the contingent consideration is based on preliminary cash flow projections, growth in expected product sales and other assumptions. Based on the assumptions, the fair value of the Royalty was determined to be $153,000 at the date of acquisition and at December 31, 2015. The fair value of the royalty was determined by applying the income approach, using several significant unobservable inputs for projected cash flows and a discount rate of 20% commensurate with the Company’s cost of capital and expectation of the revenue growth for products at their life cycle stage. These inputs are considered Level 3 inputs under the fair value measurements and disclosure guidance. The aggregate purchase price consideration was as follows: Cash consideration $ 1,000,000 Fair value of contingent consideration 153,000 Total purchase price consideration $ 1,153,000 The fair values of assets acquired at the transaction date are summarized below: Net tangible assets acquired $ 39,377 Customer contracts 259,730 Patents 135,890 Goodwill 718,003 Net Assets Acquired $ 1,153,000 Net tangible assets acquired consisted primarily of equipment, furniture and fixtures. Goodwill is an unidentifiable asset and, as such, can only be measured as a residual. A significant component of the NeoForce goodwill, which did not meet the criteria for separate recognition as an intangible asset was a skilled and assembled workforce. The founder of NeoForce, who became the General Manager of Neonatology at the Company, brings 25 years of medical device sales, operations and product development experience at neonatology focused companies. The Company plans to use his expertise and broad relationships with top tier hospitals across the United States to accelerate the adoption of CoSense. The Company also expects to achieve synergies in the areas of accounting, informational technology, sales & marketing and other general administration expenses through the combination. Pro Forma Financial Information (Unaudited) The following table presents the unaudited pro forma results of Capnia, Inc. (including the operations of Neoforce) for the years ended December 31, 2014 and December 31, 2015. The unaudited pro forma financial information combines the results of operations of Capnia and NeoForce as though the companies had been combined as of the beginning of each of the fiscal periods presented. As of September 8, 2015, the date of the acquisition, the results of NFI have been combined with Capnia as a wholly-owned subsidiary. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the consolidated results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2014 or 2015. In addition, the unaudited pro forma financial information does not attempt to project the future consolidated results of operations. December 31, December 31, 2015 2014 Pro forma total revenues $ 1,168,846 $ 987,853 Pro forma net loss $ (16,002,126 ) $ (13,307,030 ) Pro forma net loss per share — basic and diluted $ (1.70 ) $ (10.48 ) Pro forma weighted — average shares — basic and diluted 9,425,880 1,270,033 The unaudited pro forma financial information above reflects the following: • the increase of amortization expense of $53,000 in the years ended December 31, 2015 and 2014 related to the estimated fair value of intangible assets from the purchase price allocation which are being amortized over their estimated useful lives through 2028. The change in depreciation expense related to the change in estimated fair value of property and equipment from the book value at the time of the acquisition was not material. For the year ended December 31, 2015, NeoForce, Inc. revenue and net income included in the Company’s Consolidated Statement of Operations and Net Loss were $279,000 and $76,000, respectively. |
Defined Contribution Plan
Defined Contribution Plan | 12 Months Ended |
Dec. 31, 2015 | |
Compensation and Retirement Disclosure [Abstract] | |
Defined Contribution Plan | Note 14. Defined Contribution Plan The Company sponsors a 401(k) Plan, which stipulates that eligible employees can elect to contribute to the 401(k) Plan, subject to certain limitations of eligible compensation. The Company may match employee contributions in amounts to be determined at the Company’s sole discretion. To date, the Company has not made any matching contributions. |
Summary of Significant Accoun24
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
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 consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated 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 consolidated financial statements and, in the opinion of management, reflect all adjustments of a normal recurring nature considered necessary to present fairly the Company’s financial position as of September 30, 2016 and results of its operations for the three and nine months ended September 30, 2016 and 2015 and cash flows for the nine months ended September 30, 2016 and 2015. 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 consolidated financial statements and the related notes thereto for the year ended December 31, 2015 included in the Company’s Annual Report on Form 10-K. | Basis of Presentation The accompanying 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”). |
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, liability and equity instruments, stock-based compensation, acquired intangibles, contingent earn-out consideration, and allowances for accounts receivable and inventory. | 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, the valuation of liabilities and equity instruments, stock-based compensation, value and life of acquired intangibles, and allowances for accounts receivable and inventory. |
Inventory | Inventory As of December 31, 2015 and September 30, 2016, the Company’s inventory was comprised of the following (in thousands): September 30, December 31, Raw materials $ 385 $ 106 Work-in-process 164 399 Finished goods 154 46 Total inventory $ 703 $ 551 Inventory is stated at the lower of cost or market under the first-in, first-out (FIFO) method. The Company recorded a lower of cost or market write down to inventory of $72 thousand during the nine months ended September 30, 2016. | Inventory Inventory as of December 31, 2014 consisted of raw materials to be used in the manufacture of our products. As of December 31, 2015, the Company’s inventory includes approximately $106,000 of raw material, $398,000 of work-in-process and $46,000 of finished goods. Inventory is stated at the lower of cost or market under the first-in, first-out (FIFO) method. |
Intangible Assets | Intangible Assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range in term from 5 to 12 years. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life. | Intangible Assets Intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives, which range in term from 5 to 12 years. The useful life of the intangible asset is evaluated each reporting period to determine whether events and circumstances warrant a revision to the remaining useful life. |
Goodwill | Goodwill The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting unit’s carrying value to its implied fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Company determines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. There was no impairment of goodwill for the nine months ended September 30, 2016. Such goodwill is not deductible for tax purposes and represents the value placed on entering new markets and expanding market share. | Goodwill The Company tests its goodwill for impairment annually, or whenever events or changes in circumstances indicate an impairment may have occurred, by comparing its reporting unit’s carrying value to its implied fair value. Impairment may result from, among other things, deterioration in the performance of the acquired business, adverse market conditions, adverse changes in applicable laws or regulations and a variety of other circumstances. If the Company determines that an impairment has occurred, it is required to record a write-down of the carrying value and charge the impairment as an operating expense in the period the determination is made. In evaluating the recoverability of the carrying value of goodwill the Company must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the acquired assets. Changes in strategy or market conditions could significantly impact those judgments in the future and require an adjustment to the recorded balances. There was no impairment of goodwill for the year ended December 31, 2015. Such goodwill is not deductible for tax purposes and represents the value placed on entering new markets and expanding market share. |
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. Due to certain provisions contained in the Series B Warrant agreement that provides for the Company potentially issuing an unlimited number of shares upon exercise, the Company had adopted a sequencing policy that reclassified contracts, with the exception of stock options, from equity to assets or liabilities for those with the latest inception date first. The Company had evaluated the issuance of securities as to reclassification as a liability under this sequencing policy through February 12, 2016, the date that the Series B Warrants expired. | 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. 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements There have been no new accounting pronouncements or changes to accounting pronouncements during the nine months ended September 30, 2016 as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015 that are of significance or potential significance to the Company. | 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 In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes In February 2016, the FASB issued ASU No. 2016-02, Leases. 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. |
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 subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. | |
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 December 31, 2015 and December 31, 2014. The Company expects this to continue. | |
Segments | Segments The Company operates in one segment. Management uses one measurement of profitability and does not segregate its business for internal reporting, making operating decisions, and assessing financial performance. All long-lived assets are maintained in the United States of America. | |
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. | |
Accounts Receivable | Accounts Receivable Accounts receivable as of December 31, 2015 consist of balances due from customers in the normal course of business. The Company did not record an allowance for doubtful accounts as this balance was deemed fully collectible. | |
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets consist of payments primarily related to insurance and short-term deposits. Prepaid expenses are initially recorded upon payment and are expensed as goods or services are received. | |
Business Combinations | Business Combinations For business combinations the Company utilizes the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. The Company recognizes separately from goodwill the fair value of assets acquired and the liabilities assumed. Goodwill as of the acquisition date is measured as the excess of consideration transferred and the acquisition date fair values of the assets acquired and liabilities assumed. While the Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the acquisition date, the Company’s estimates are subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company may retroactively record adjustments to the fair value of the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the fair value of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the Company’s consolidated statements of operations. | |
Property and Equipment, Net | Property and Equipment, Net Property and equipment are stated at cost net of accumulated depreciation and amortization calculated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized on a straight-line basis over the lesser of their useful life or the term of the lease. Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the balance sheet and any resulting gain or loss is reflected in operations in the period realized. | |
Long-Lived Assets | Long-Lived Assets The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company evaluates assets for potential impairment by comparing estimated future undiscounted net cash flows to the carrying amount of the asset. If the carrying amount of the assets exceeds the estimated future undiscounted cash flows, impairment is measured based on the difference between the carrying amount of the assets and fair value. | |
Revenue Recognition | Revenue Recognition The Company began recognizing sales of CoSense during the year ended December 31, 2015. In addition, the Company began recognizing sales of NFI pulmonary resuscitation products after the acquisition of Neoforce’s assets in September 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 offers 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. The Company also recognized revenue related to a government grant awarded during the year ended December 31, 2015. 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. | |
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 $220,000 incurred and reimbursed under the government grant awarded in the year ended December 31, 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. | |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred income tax assets and liabilities are recorded based on the estimated future tax effects of differences between the amounts at which assets and liabilities are recorded for financial reporting purposes and the amounts recorded for income tax purposes. Deferred income taxes are classified as current or non-current, based on the classifications of the related assets and liabilities giving rise to the temporary differences. A valuation allowance is provided against the Company’s deferred income tax assets when their realization is not reasonably assured. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of a tax benefit might change as new information becomes available. | |
Convertible Preferred Stock and other Hybrid Instruments | Convertible Preferred Stock and other Hybrid Instruments The Company’s convertible preferred stock was classified as permanent equity on its balance sheet in accordance with authoritative guidance for the classification and measurement of hybrid securities and distinguishing liability from equity instruments. The preferred stock is not redeemable at the option of the holder. Further, the Company evaluated its Series A Convertible Preferred Stock and determined that it is considered an equity host under ASC 815, Derivatives and Hedging | |
Stock-Based Compensation | Stock-Based Compensation For stock options granted to employees, the Company recognizes compensation expense for all stock-based awards based on the estimated fair value on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as expense ratably over the requisite service period. The fair value of stock options is determined using the Black-Scholes option pricing model. The determination of fair value for stock-based awards on the date of grant using an option pricing model requires management to make certain assumptions regarding a number of complex and subjective variables. Stock-based compensation expense related to stock options granted to non-employees is recognized based on the fair value of the stock options, determined using the Black-Scholes option pricing model, as they are earned. The awards generally vest over the time period the Company expects to receive services from the non-employee. | |
Patents [Member] | ||
Intangible Assets | 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. The Company made the first installment of $100,000 on December 21, 2015. The remaining $200,000 payable under this agreement has been included in Accrued compensation and other current liabilities on the balance sheet. 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 an intangible asset on its consolidated balance sheet, and is amortizing the fair value over the remaining useful life of the patent. In July 2015, the Company also entered into a consulting agreement with an affiliate of BDDI. As part of this consulting agreement the Company issued 10,000 shares to the affiliate of BDDI. |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounting Policies [Abstract] | ||
Schedule of Inventory | As of December 31, 2015 and September 30, 2016, the Company’s inventory was comprised of the following (in thousands): September 30, December 31, Raw materials $ 385 $ 106 Work-in-process 164 399 Finished goods 154 46 Total inventory $ 703 $ 551 | |
Schedule of Intangible Assets | Intangible assets consist of the following at December 31, 2015: Amount Accumulated Net Amount Useful Lives Patents and trademarks $ 697,890 $ (32,155 ) $ 665,735 5-12 Customer contracts 259,730 (8,658 ) 251,072 10.00 Total $ 957,620 $ (40,813 ) $ 916,807 | |
Schedule of Future Amortization Expense | Future amortization expense for intangible assets over their remaining useful lives is as follows: Year ending December 31: Patents and Customer contracts Total Amortization 2016 $ 73,370 $ 25,973 $ 99,343 2017 73,370 25,973 99,343 2018 73,370 25,973 99,343 2019 73,370 25,973 99,343 2020 and thereafter 372,255 147,180 519,435 Total $ 665,735 $ 251,072 $ 916,807 |
Fair Value of Financial Instr26
Fair Value of Financial Instruments (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 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 September 30, 2016 Total Level 1 Level 2 Level 3 Assets Money market fund $ 4,879 $ 4,879 $ — $ — Liabilities Series A warrant liability $ 509 $ 509 $ — $ — Series C warrant liability 115 — — 115 Total liabilities $ 624 $ 509 $ — $ 115 Fair Value Measurements at December 31, 2015 Total Level 1 Level 2 Level 3 Assets Money market fund $ 3,804 $ 3,804 $ — $ — Liabilities Series A warrant liability $ 1,213 $ 1,213 $ — $ — Series B warrant liability 865 — — 865 Series C warrant liability 462 — — 462 Total common stock warrant liability $ 2,540 $ 1,213 $ — $ 1,327 | 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, 2015 Total Level 1 Level 2 Level 3 Assets Money market fund $ 3,803,929 $ 3,803,929 — — Liabilities Series A warrant liability 1,212,803 1,212,803 — — Series B warrant liability 865,000 — — 865,000 Series C warrant liability 462,437 — — 462,437 Total common stock warrant liability $ 2,540,240 $ 1,212,803 — $ 1,327,437 Fair Value Measurements at December 31, 2014 Total Level 1 Level 2 Level 3 Assets Money market fund $ 7,891,888 $ 7,891,888 $ — $ — Liabilities Series A warrant liability 857,362 857,362 — — Series B warrant liability 17,438,731 — — 17,438,731 Total common stock warrant liability $ 18,296,093 $ 857,362 — $ 17,438,731 |
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 warrants, which are treated as liabilities, as follows (dollars in thousands): Series A Warrant Series B Warrant Series C Warrant Number of Liability Number of Liability Number of Liability Balance at December 31, 2015 2,425,605 $ 1,213 116,580 $ 865 590,415 $ 462 Change in value of Series A Warrants — (704 ) — — — — De-recognition of Series B Warrant liability upon cashless exercise of warrants (485,202 shares issued) — — (102,300 ) (593 ) — — De-recognition of Series B Warrant liability upon expiration — — (14,280 ) — — — Change in value of Series B Warrants — — — (272 ) — — Change in value of Series C Warrants — — — — — (347 ) Balance at September 30, 2016 2,425,605 $ 509 — $ — 590,415 $ 115 | 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 Balance at December 31, 2014 2,449,605 $ 857,362 2,449,605 $ 17,438,731 — $ — Change in value of Series A Warrants — 397,441 — — — — De-recognition of Series A Warrant liability upon exercise (24,000 ) (42,000 ) — — — — De-recognition of Series B Warrant liability upon cash exercise of 619,512 warrants in Private Transaction (619,512 shares issued) — — (619,512 ) (6,747,765 ) — — De-recognition of Series B Warrant liability upon cashless exercise of 1,713,045 warrants (5,879,560 shares issued) — — (1,713,045 ) (12,527,991 ) — — De-recognition of Series B Warrant liability upon contribution of 468 warrants back to the Company — — (468 ) (3,332 ) — — Change in value of Series B Warrants — — — 2,705,357 — — Record Series C Warrant Liability as inducement charge (589,510 warrants in Private Transaction, 905 warrants in tender offer) — — — — 590,415 3,049,375 Change in value of Series C Warrants — — — — — (2,586,938 ) Balance at December 31, 2015 2,425,605 $ 1,212,803 116,580 $ 865,000 590,415 $ 462,437 |
Warrant Liabilities (Tables)
Warrant Liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair Value of Convertible Preferred Stock Warrant Liability | The Company used the following inputs: September 30, December 31, Volatility 90 % 90 % Expected Term (years) 3.42 4.17 Expected dividend yield — % — % Risk-free rate 0.93 % 1.76 % | |
Series B Warrant Liability [Member] | ||
Fair Value of Convertible Preferred Stock Warrant Liability | As of December 31, 2015 and December 31, 2014 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, December 31, 2014 Volatility 90 % 87 % Expected Term (years) 0.12 1.10 Expected dividend yield — % — % Risk-free rate 0.65 % 0.26 % | |
Series C Warrant [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: December 31, March 5, 2015 Volatility 90 % 86 % Expected Term (years) 4.17 5.00 Expected dividend yield — % — % Risk-free rate 1.76 % 1.35 % |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||
Summary of Stock Based Compensation Expense | Stock compensation expense (in thousands) was allocated between departments as follows: Three Months Ended Nine Months Ended 2016 2015 2016 2015 Research & Development $ 41 $ 27 $ 116 $ 99 Sales & Marketing 11 17 22 51 General & Administrative 154 100 422 596 Total $ 206 $ 144 $ 560 $ 746 | Stock compensation expense was allocated between departments as follows; Year ended December 31, December 31, Research & Development $ 148,948 $64,020 Sales & Marketing 62,533 8,335 General & Administrative 730,888 273,080 Total $ 942,369 $ 345,435 |
Schedule of Fair Value of Award Granted Using Black-Scholes Option Pricing Model | The fair value of each award granted was estimated on the date of grant using the Black-Scholes option pricing model with the following assumptions for the year ended December 31, 2015: Year Ended December 31, December 31, Expected life (years) 6.1 5.8 - 6.1 Risk-free interest rate 1.6% - 1.7 % 1.6% - 1.8 % Volatility 56% - 66 % 43% - 59 % Dividend rate — % — % | |
Summary of Stock Option Transactions | The following table summarizes stock option transactions for the years ended December 31, 2015 and 2014 as issued under the Plans: Shares Number of Weighted- Weighted Balance at December 31, 2013 124,824 239,606 $ 3.36 2014 Plan authorized 1,437,165 — — Closed 2010 Plan (123,523 ) — — Options granted (926,384 ) 926,384 7.15 Options canceled/forfeited 93,979 (93,979 ) 6.75 Balance at December 31, 2014 606,061 1,072,011 6.34 8.67 Additional shares authorized 270,764 — — Options granted (955,713 ) 955,713 3.08 Options exercised — (83,848 ) 3.50 Options canceled/forfeited 85,037 (85,037 ) 5.03 Balance at December 31, 2015 6,149 1,858,839 $ 4.82 8.75 Options vested at December 31, 2014 — 578,889 $ 5.58 7.46 Options vested and expected to vest at December 31, 2014 — 1,072,011 $ 6.34 8.67 Options vested at December 31, 2015 — 922,927 $ 5.06 7.47 Options vested and expected to vest at December 31, 2015 — 1,858,839 $ 4.82 8.75 |
Net loss per share (Tables)
Net loss per share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Earnings Per Share [Abstract] | ||
Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding | The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in Common Stock equivalent shares): Three Months Ended Nine Months Ended 2016 2015 2016 2015 Convertible preferred stock of 13,780 shares 13,780,000 — 13,780,000 — Warrants issued to 2010/2012 convertible note holders to purchase common stock 480,147 480,147 480,147 480,147 Options to purchase common stock 2,938,152 1,863,171 2,938,152 1,863,171 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 82,500 82,500 Series A Warrants to purchase common stock 2,425,605 2,425,605 2,425,605 2,425,605 Series B Warrants to purchase common stock — 527,573 — 527,573 Series C Warrants to purchase common stock 590,415 590,415 590,415 590,415 Series D Warrants to purchase common stock 2,930,812 — 2,930,812 — | The following potentially dilutive securities outstanding have been excluded from the computations of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported (in Common Stock equivalent shares): As of December 31, 2015 2014 Convertible preferred stock 2,462,162 — Warrants issued to 2010/2012 convertible note holders to purchase common stock 480,147 523,867 Options to purchase common stock 1,858,839 1,072,011 Warrants issued in 2009 to purchase common stock 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 2,449,605 Series B warrants to purchase common stock 116,580 2,449,605 Series C warrants to purchase common stock 590,415 — Series D warrants to purchase common stock 1,280,324 — |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | Property and equipment consisted of the following: December 31, December 31, Furniture and fixtures $ 236,366 $ 180,238 Computer hardware 52,112 27,555 Leasehold improvements 9,117 10,726 $ 297,595 $ 218,519 Less accumulated depreciation and amortization (211,850 ) (160,912 ) Total $ 85,745 $ 57,607 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating Leases of Lessee Disclosure | Minimum rental commitments under all noncancelable leases with an initial term in excess of one year as of December 31, 2015 were as follows: Year ending December 31: Operating Leases 2016 $ 698,945 2017 750,118 2018 629,923 2019 334,747 Total $ 2,413,733 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
Reconciliation of Income Tax Expense by Applying Statutory U.S. Federal Income Tax Rate to Income Before Income Taxes | A reconciliation of income tax expense with amounts determined by applying the statutory U.S. federal income tax rate to income before income taxes is as follows: Years Ended December 31, 2015 2014 Tax on the loss before income tax expense computed at the federal statutory rate of 34% $ (5,408,551 ) $ (4,717,063 ) State tax (benefit) at statutory rate, net of federal benefit (928,107 ) (13,020 ) Change in Valuation Allowance 4,199,154 1,578,347 Change in research and development credits (60,991 ) 316,311 Change in fair value of warrants 1,493,215 2,960,766 Other 705,280 (125,341 ) Income tax expense $ — $ — Effective income tax rate — % — % |
Significant Components of Company's Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities are as follows at December 31, 2015 and 2014: December 31, 2015 2014 Non-Current Deferred Tax Assets: Reserves and accruals $ 287,850 $ 71,953 Net Operating Loss Carryforwards 26,174,912 22,125,807 Research and development credits 1,381,296 1,345,833 Intangible Assets (74,113 ) 46,784 Fixed Assets 9,080 (10,505 ) Total Non-Current Deferred Tax Assets 27,779,025 23,579,872 Valuation Allowance (27,779,025 ) (23,579,872 ) Net Deferred Tax Assets $ — $ — |
Summary of Gross Unrecognized Tax Benefits | The following tables summarize the activities of gross unrecognized tax benefits: December 31, 2015 2014 Beginning balance 673,247 — Increase related to prior year tax positions — 628,383 Decreases related to prior year tax positions (13,207 ) — Increase related to Current year tax positions 31,657 44,864 Decreases related to current year tax positions — — Ending Balance $ 691,697 $ 673,247 |
NeoForce Group, Inc. Acquisit33
NeoForce Group, Inc. Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Business Combinations [Abstract] | |
Schedule of Aggregate Purchase Price Consideration | The aggregate purchase price consideration was as follows: Cash consideration $ 1,000,000 Fair value of contingent consideration 153,000 Total purchase price consideration $ 1,153,000 |
Fair Values of Assets Acquired | The fair values of assets acquired at the transaction date are summarized below: Net tangible assets acquired $ 39,377 Customer contracts 259,730 Patents 135,890 Goodwill 718,003 Net Assets Acquired $ 1,153,000 |
Schedule of Unaudited Pro Forma Financial Information | The following table presents the unaudited pro forma results of Capnia, Inc. (including the operations of Neoforce) for the years ended December 31, 2014 and December 31, 2015. The unaudited pro forma financial information combines the results of operations of Capnia and NeoForce as though the companies had been combined as of the beginning of each of the fiscal periods presented. As of September 8, 2015, the date of the acquisition, the results of NFI have been combined with Capnia as a wholly-owned subsidiary. The unaudited pro forma financial information is presented for informational purposes only and is not indicative of the consolidated results of operations that would have been achieved if the acquisition had taken place at the beginning of fiscal 2014 or 2015. In addition, the unaudited pro forma financial information does not attempt to project the future consolidated results of operations. December 31, December 31, 2015 2014 Pro forma total revenues $ 1,168,846 $ 987,853 Pro forma net loss $ (16,002,126 ) $ (13,307,030 ) Pro forma net loss per share — basic and diluted $ (1.70 ) $ (10.48 ) Pro forma weighted — average shares — basic and diluted 9,425,880 1,270,033 |
Liquidity, Financial Conditio34
Liquidity, Financial Condition and Management's Plans - Additional Information (Detail) | Sep. 29, 2016USD ($) | Jul. 05, 2016USD ($) | Jun. 29, 2016USD ($)$ / sharesshares | Jan. 08, 2016USD ($) | Oct. 15, 2015USD ($) | Oct. 12, 2015USD ($)Closings | Jul. 24, 2015USD ($) | Mar. 06, 2015USD ($) | Mar. 05, 2015USD ($) | Nov. 18, 2014USD ($)$ / sharesshares | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($)shares | Sep. 30, 2016USD ($)Closings | Sep. 30, 2015USD ($) | Jun. 30, 2016USD ($)shares | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Net loss | $ (2,750,000) | $ (3,293,000) | $ (9,452,000) | $ (13,064,000) | $ (15,908,546) | $ (13,237,616) | |||||||||||
Accumulated deficit | (95,698,000) | (95,698,000) | (86,246,673) | (70,338,127) | |||||||||||||
Positive (deficit) in working capital | $ 4,700,000 | 4,700,000 | 3,200,000 | ||||||||||||||
Net cash used in operating activities | (10,810,000) | (6,921,000) | (10,299,330) | (4,484,362) | |||||||||||||
Proceeds from issuance of common stock | 1,434,000 | 1,434,194 | 0 | ||||||||||||||
Expenses related stock issuance | 0 | 530,000 | 575,181 | 2,117,217 | |||||||||||||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | 0 | 10,727,475 | |||||||||||||||
Proceeds from exercise of stock options | 70,000 | 294,000 | 293,573 | 0 | |||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Proceeds from sale of Series A preferred convertible stock | 5,071,000 | 0 | 4,230,150 | 0 | |||||||||||||
Expenses related stock issuance | 71,000 | 0 | |||||||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Proceeds from sale of Series A preferred convertible stock | $ 13,479,000 | 0 | |||||||||||||||
2016 Sabby Purchase Agreement [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Shares repurchased (in shares) | shares | 7,780 | ||||||||||||||||
Sabby Management, LLC [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Maximum commitment under stock purchase agreement | $ 10,000,000 | ||||||||||||||||
Number of closings | Closings | 2 | ||||||||||||||||
Proceeds from sale of Series A preferred convertible stock | $ 5,000,000 | $ 4,100,000 | |||||||||||||||
Expenses related stock issuance | $ 500,000 | $ 400,000 | |||||||||||||||
Sabby Management, LLC [Member] | Common Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Ownership percentage (percent) | 4.99% | ||||||||||||||||
Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Payments for repurchase of private placement | $ 7,780,000 | ||||||||||||||||
Shares converted on as-converted basis (in shares) | shares | 4,205,405 | ||||||||||||||||
Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Proceeds from sale of Series A preferred convertible stock | $ 5,600,000 | ||||||||||||||||
Shares repurchased (in shares) | shares | 7,780 | ||||||||||||||||
Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Number of closings | Closings | 2 | ||||||||||||||||
Proceeds from sale of Series A preferred convertible stock | $ 1,300,000 | $ 4,400,000 | |||||||||||||||
Expenses related stock issuance | $ 100,000 | $ 300,000 | |||||||||||||||
Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | Common Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Ownership percentage (percent) | 4.99% | ||||||||||||||||
Private Placement [Member] | Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Fixed conversion price per share (in dollars per share) | $ / shares | $ 1 | ||||||||||||||||
Private Placement [Member] | Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Maximum commitment under stock purchase agreement | $ 13,780,000 | ||||||||||||||||
Number of shares issued in transaction (in shares) | shares | 13,780 | ||||||||||||||||
Private Placement [Member] | Sabby Management, LLC [Member] | 2016 Sabby Purchase Agreement [Member] | Common Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Shares issuable upon conversion (in shares) | shares | 13,780,000 | ||||||||||||||||
IPO [Member] | Common Stock [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Capital Stock, Number of Shares Per Unit | shares | 1 | ||||||||||||||||
Series B Warrant Liability [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Positive (deficit) in working capital | 4,100,000 | ||||||||||||||||
Proceeds from exercise of warrants to purchase of common stock | $ 3,800,000 | $ 0 | 189,000 | 3,720,713 | 0 | ||||||||||||
Series B Warrant Liability [Member] | IPO [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Capital Stock, Number of Shares Per Unit | shares | 1 | ||||||||||||||||
Series A Warrant Liability [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Proceeds from exercise of warrants to purchase of common stock | $ 200,000 | 0 | 156,000 | $ 156,000 | $ 0 | ||||||||||||
Series A Warrant Liability [Member] | IPO [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Capital Stock, Number of Shares Per Unit | shares | 1 | ||||||||||||||||
Private Placement Series B Warrants [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Proceeds from exercise of warrants to purchase of common stock | $ 3,800,000 | $ 0 | $ 3,832,000 | ||||||||||||||
Units [Member] | IPO [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Number of shares issued | shares | 1,650,000 | ||||||||||||||||
Offering price per unit | $ / shares | $ 6.50 | ||||||||||||||||
Net proceeds after deducting underwriting discounts and commissions and IPO related expenses | $ 8,000,000 | ||||||||||||||||
Aspire Capital Fund, LLC [Member] | |||||||||||||||||
Liquidity And Managements Plans [Line Items] | |||||||||||||||||
Maximum commitment under stock purchase agreement | $ 10,000,000 | ||||||||||||||||
Agreement term | 24 months | ||||||||||||||||
Number of shares issued in transaction (in shares) | shares | 506,585 | 506,585 | |||||||||||||||
Proceeds from issuance of common stock | $ 1,400,000 | $ 1,400,000 |
Summary of Significant Accoun35
Summary of Significant Accounting Policies - Inventory (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Accounting Policies [Abstract] | |||
Raw materials | $ 385,000 | $ 106,000 | |
Work-in-process | 164,000 | 399,000 | |
Finished goods | 154,000 | 46,000 | |
Total inventory | $ 703,000 | $ 551,008 | $ 109,336 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies - Additional Information (Detail) | Dec. 21, 2015USD ($) | Jul. 01, 2015USD ($) | Jun. 30, 2015USD ($)shares | Jul. 31, 2015shares | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)BankSegment |
Schedule Of Significant Accounting Policies [Line Items] | |||||||||
Write-down of inventory | $ 72,000 | ||||||||
Goodwill impairment loss | 0 | $ 0 | |||||||
Number of commercial banks | Bank | 2 | ||||||||
Number of operating segments | Segment | 1 | ||||||||
Raw materials | $ 106,000 | ||||||||
Work-in-process | 398,000 | ||||||||
Finished goods | $ 46,000 | ||||||||
Aggregate cash payments | $ 450,000 | ||||||||
Shares issued during period | shares | 40,000 | 10,000 | |||||||
Initial payment under purchase agreement | $ 150,000 | ||||||||
Committed payment amount | $ 100,000 | ||||||||
Payment period one | 6 months | ||||||||
Payment period two | 12 months | ||||||||
Payment period three | 18 months | ||||||||
Payments for royalties | $ 100,000 | ||||||||
Government grant revenue | $ 0 | $ 155,000 | $ 0 | $ 220,000 | $ 219,917 | ||||
Minimum [Member] | |||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||
Intangible assets estimated useful lives | 5 years | 5 years | |||||||
Estimated useful lives of property and equipment | 3 years | ||||||||
Maximum [Member] | |||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||
Intangible assets estimated useful lives | 12 years | 12 years | |||||||
Estimated useful lives of property and equipment | 5 years | ||||||||
Accrued Compensation and Other Current Liabilities [Member] | |||||||||
Schedule Of Significant Accounting Policies [Line Items] | |||||||||
Remaining payable amount | $ 200,000 |
Fair Value of Financial Instr37
Fair Value of Financial Instruments - Summary of Financial Instruments Measured at Fair Value on Recurring Basis (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Series A Warrant Liability [Member] | |||
Liabilities | |||
Warrant liability | $ 509,000 | $ 1,212,803 | $ 857,362 |
Series B Warrant Liability [Member] | |||
Liabilities | |||
Warrant liability | 0 | 17,438,731 | |
Series C Warrant [Member] | |||
Liabilities | |||
Warrant liability | 115,000 | 462,437 | |
Fair Value, Measurements, Recurring [Member] | |||
Liabilities | |||
Warrant liability | 624,000 | 2,540,240 | 18,296,093 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | |||
Liabilities | |||
Warrant liability | 509,000 | 1,212,803 | 857,362 |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series B Warrant Liability [Member] | |||
Liabilities | |||
Warrant liability | 865,000 | 17,438,731 | |
Fair Value, Measurements, Recurring [Member] | Convertible preferred stock warrant liability [Member] | Series C Warrant [Member] | |||
Liabilities | |||
Warrant liability | 115,000 | 462,437 | |
Fair Value, Measurements, Recurring [Member] | Money market fund [Member] | |||
Assets | |||
Cash and cash equivalents | 4,879,000 | 3,803,929 | 7,891,888 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | |||
Liabilities | |||
Warrant liability | 509,000 | 1,212,803 | 857,362 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Convertible preferred stock warrant liability [Member] | Series A Warrant Liability [Member] | |||
Liabilities | |||
Warrant liability | 509,000 | 1,212,803 | 857,362 |
Fair Value, Measurements, Recurring [Member] | Level 1 [Member] | Money market fund [Member] | |||
Assets | |||
Cash and cash equivalents | 4,879,000 | 3,803,929 | 7,891,888 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | |||
Liabilities | |||
Warrant liability | 115,000 | 1,327,437 | 17,438,731 |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | Series B Warrant Liability [Member] | |||
Liabilities | |||
Warrant liability | 865,000 | $ 17,438,731 | |
Fair Value, Measurements, Recurring [Member] | Level 3 [Member] | Convertible preferred stock warrant liability [Member] | Series C Warrant [Member] | |||
Liabilities | |||
Warrant liability | $ 115,000 | $ 462,437 |
Fair Value of Financial Instr38
Fair Value of Financial Instruments - Additional Information (Detail) - USD ($) | Jan. 13, 2016 | Sep. 08, 2015 | Sep. 30, 2016 | Dec. 31, 2015 |
Redwood City, California [Member] | Level 3 [Member] | Sublease of Excess Space [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value inputs, discount rate | 20.00% | |||
NeoForce, Inc [Member] | NeoForce Group, Inc. [Member] | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value of royalty | $ 153,000 | $ 188,000 | $ 153,000 | |
Fair value inputs, discount rate | 20.00% | 20.00% |
Fair Value of Financial Instr39
Fair Value of Financial Instruments - Summary of Changes in Fair Value of Level1 and Level 3 Financial Instruments (Detail) - USD ($) | Feb. 12, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Mar. 05, 2015 |
Series A Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of period, in shares | 2,425,605 | |||
De-recognition of Warrant liability upon exercise, in shares | (24,000) | (24,000) | ||
Balance at the end of period, in shares | 2,425,605 | 2,425,605 | ||
Series B Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of period, in shares | 116,580 | |||
De-recognition of Series B Warrant liability upon expiration, in shares | (14,280) | |||
De-recognition of Warrant liability upon exercise, in shares | (589,510) | |||
Balance at the end of period, in shares | 116,580 | |||
Series C Warrant [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Record Series C Warrant Liability | 590,415 | 590,415 | ||
Common stock warrant liability [Member] | Series A Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of period, in shares | 2,425,605 | 2,449,605 | ||
Balance at the beginning of period | $ 1,212,803 | $ 857,362 | ||
Change in value of Warrant | $ (704,000) | 397,441 | ||
De-recognition of Warrant liability upon exercise | $ (42,000) | |||
De-recognition of Warrant liability upon exercise, in shares | (24,000) | |||
Balance at the end of period, in shares | 2,425,605 | 2,425,605 | ||
Balance at end of period | $ 509,000 | $ 1,212,803 | ||
Common stock warrant liability [Member] | Series B Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of period, in shares | 116,580 | 2,449,605 | ||
Balance at the beginning of period | $ 865,000 | $ 17,438,731 | ||
Change in value of Warrant | $ (272,000) | 2,705,357 | ||
De-recognition of Series B Warrant liability upon expiration, in shares | (14,280) | |||
De-recognition of Warrant liability upon exercise | $ (3,332) | |||
De-recognition of Warrant liability upon exercise, in shares | (468) | |||
Balance at the end of period, in shares | 116,580 | |||
Balance at end of period | $ 865,000 | |||
Common stock warrant liability [Member] | Series C Warrant [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Balance at the beginning of period, in shares | 590,415 | |||
Balance at the beginning of period | $ 462,437 | |||
Change in value of Warrant | $ (347,000) | $ (2,586,938) | ||
Balance at the end of period, in shares | 590,415 | 590,415 | ||
Balance at end of period | $ 115,000 | $ 462,437 | ||
Private Placement [Member] | Common stock warrant liability [Member] | Series C Warrant [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
Record Series C Warrant Liability | $ 3,049,375 | |||
Record Series C Warrant Liability | 590,415 | |||
Cash Exercise [Member] | Common stock warrant liability [Member] | Series B Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
De-recognition of Warrant liability upon exercise | $ (6,747,765) | |||
De-recognition of Warrant liability upon exercise, shares issued | 619,512 | |||
De-recognition of Warrant liability upon exercise, in shares | (619,512) | |||
Cash Exercise [Member] | Tender Offer [Member] | Common stock warrant liability [Member] | Series C Warrant [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
De-recognition of Warrant liability upon exercise, shares issued | 905 | |||
Cash Less Exercise [Member] | Common stock warrant liability [Member] | Series B Warrant Liability [Member] | ||||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||||
De-recognition of Warrant liability upon exercise | $ (593,000) | $ (593,000) | $ (12,527,991) | |
De-recognition of Warrant liability upon exercise, shares issued | 485,202 | 485,202 | 5,879,560 | |
De-recognition of Warrant liability upon exercise, in shares | (102,300) | (102,300) | (1,713,045) |
Warrant Liabilities - Additiona
Warrant Liabilities - Additional Information (Detail) - USD ($) | Feb. 12, 2016 | Mar. 06, 2015 | Mar. 05, 2015 | Nov. 18, 2014 | Jul. 31, 2015 | Sep. 30, 2016 | Mar. 25, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Feb. 12, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Apr. 30, 2015 |
Class of Warrant or Right [Line Items] | |||||||||||||||
Aggregate VWAP (percent) | 1.00% | 1.00% | |||||||||||||
Decrease in the fair value of warrants liabilities | $ (200,000) | $ (73,000) | $ (1,323,000) | $ 1,177,000 | $ 515,860 | $ 3,941,335 | |||||||||
Warrants cashless exercised (in shares) | 43,720 | ||||||||||||||
Proceeds from issuance of common stock under tender offer | 1,434,000 | $ 1,434,194 | 0 | ||||||||||||
Issuance of shares upon cashless exercise warrants (in shares) | 13,407 | ||||||||||||||
Common Stock [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Issuance of shares upon cashless exercise warrants (in shares) | 905 | ||||||||||||||
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 (in shares) | 2,449,605 | 2,449,605 | 2,449,605 | ||||||||||||
Exercise price of warrants exercised (in dollars per share) | $ 6.50 | $ 6.50 | $ 6.50 | ||||||||||||
Warrants term | 5 years | 5 years | |||||||||||||
Series A Warrant Liability [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrants exercised (in shares) | 24,000 | 24,000 | 24,000 | 24,000 | |||||||||||
Warrants outstanding (in shares) | 2,425,605 | 2,425,605 | 2,425,605 | 2,425,605 | |||||||||||
Warrant liability | $ 509,000 | $ 1,212,803 | $ 509,000 | $ 1,212,803 | 857,362 | ||||||||||
Decrease in the fair value of warrants liabilities | 704,000 | 400,000 | |||||||||||||
Gross proceeds upon exercise of warrants | $ 200,000 | $ 0 | 156,000 | 156,000 | $ 0 | ||||||||||
Fair value of warrants outstanding | $ 1,200,000 | $ 1,200,000 | |||||||||||||
Series A Warrant Liability [Member] | Common stock warrant liability [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrants exercised (in shares) | 24,000 | 24,000 | |||||||||||||
Warrants outstanding (in shares) | 2,425,605 | 2,425,605 | 2,425,605 | 2,425,605 | 2,449,605 | ||||||||||
De-recognition of Warrant liability upon exercise | $ 42,000 | ||||||||||||||
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 (in shares) | 2,449,605 | 2,449,605 | 2,449,605 | 2,449,605 | |||||||||||
Exercise price of warrants exercised (in dollars per share) | $ 6.50 | $ 6.50 | $ 6.50 | $ 6.50 | |||||||||||
Warrants term | 15 months | ||||||||||||||
Decrease in common stock market price | $ 6.50 | ||||||||||||||
Series B Warrant Liability [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Exercise price of warrants exercised (in dollars per share) | $ 6.50 | ||||||||||||||
Warrants exercised (in shares) | 589,510 | ||||||||||||||
Warrants outstanding (in shares) | 116,580 | 116,580 | |||||||||||||
Warrant liability | $ 0 | $ 0 | $ 17,438,731 | ||||||||||||
De-recognition of warrant liability | $ 6,700,000 | $ 0 | 3,000 | 3,332 | 0 | ||||||||||
Gross proceeds upon exercise of warrants | $ 3,800,000 | 0 | 189,000 | $ 3,720,713 | 0 | ||||||||||
Warrants cashless exercised (in shares) | 102,300 | 1,713,045 | |||||||||||||
Series B Warrant Liability [Member] | Cash Less Exercise [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
De-recognition of warrant liability | 593,000 | $ 9,475,000 | $ 12,527,991 | $ 0 | |||||||||||
Series B Warrant Liability [Member] | Decrease in carrying value [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Decrease in the fair value of warrants liabilities | $ 2,700,000 | $ 272,000 | $ 16,600,000 | ||||||||||||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrants exercised (in shares) | 468 | 468 | |||||||||||||
Warrants outstanding (in shares) | 116,580 | 116,580 | 2,449,605 | ||||||||||||
De-recognition of Warrant liability upon exercise | $ 3,332 | ||||||||||||||
Series B Warrant Liability [Member] | Common stock warrant liability [Member] | Cash Less Exercise [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Warrants exercised (in shares) | 102,300 | 102,300 | 1,713,045 | 102,300 | 102,300 | 1,713,045 | |||||||||
De-recognition of Warrant liability upon exercise, shares issued | 485,202 | 485,202 | 5,879,560 | ||||||||||||
De-recognition of Warrant liability upon exercise | $ 593,000 | $ 593,000 | $ 12,527,991 | ||||||||||||
Series B Warrant Liability [Member] | Common Stock [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
De-recognition of warrant liability | $ 12,500,000 | ||||||||||||||
Issuance of shares upon cashless exercise warrants (in shares) | 5,879,560 | ||||||||||||||
Series C Warrant [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Number of common stock purchased upon issuance of warrants (in shares) | 590,415 | 590,415 | 590,415 | 590,415 | |||||||||||
Exercise price of warrants exercised (in dollars per share) | $ 6.25 | ||||||||||||||
Warrant liability | $ 115,000 | $ 462,437 | $ 115,000 | $ 462,437 | |||||||||||
Decrease in the fair value of warrants liabilities | $ 347,000 | 2,600,000 | |||||||||||||
Warrants cashless exercised (in shares) | 905 | ||||||||||||||
Proceeds from issuance of common stock under tender offer | $ 5,882 | ||||||||||||||
Fair value of warrants outstanding | $ 500,000 | $ 500,000 | |||||||||||||
Series C Warrant [Member] | Common stock warrant liability [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Exercise price of warrants exercised (in dollars per share) | $ 6.25 | ||||||||||||||
Warrants outstanding (in shares) | 590,415 | 590,415 | 590,415 | 590,415 | |||||||||||
Warrants cashless exercised (in shares) | 905 | ||||||||||||||
Proceeds from issuance of common stock under tender offer | $ 5,882 | ||||||||||||||
Series C Warrant [Member] | Common Stock [Member] | |||||||||||||||
Class of Warrant or Right [Line Items] | |||||||||||||||
Issuance of shares upon cashless exercise warrants (in shares) | 905 |
Warrant Liabilities - Fair Valu
Warrant Liabilities - Fair Value of Convertible Preferred Stock Warrant Liability (Detail) | Mar. 05, 2015 | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Series B Warrant Liability [Member] | ||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||
Volatility | 90.00% | 87.00% | ||
Expected Term | 1 month 13 days | 1 year 1 month 6 days | ||
Expected dividend yield | 0.00% | 0.00% | ||
Risk-free rate | 0.65% | 0.26% | ||
Series C Warrant [Member] | ||||
Fair Value Inputs, Liabilities, Quantitative Information [Line Items] | ||||
Volatility | 86.00% | 90.00% | 90.00% | |
Expected Term | 5 years | 3 years 5 months 3 days | 4 years 2 months 1 day | |
Expected dividend yield | 0.00% | 0.00% | 0.00% | |
Risk-free rate | 1.35% | 0.93% | 1.76% |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) | Mar. 01, 2016ft² | Sep. 08, 2015USD ($) | Jul. 01, 2015USD ($)ft² | Feb. 02, 2015USD ($) | Sep. 30, 2016USD ($)ft² | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)ft² | Dec. 31, 2014USD ($) |
Loss Contingencies [Line Items] | ||||||||
Non-cancelable operating lease agreement term | 4 years | |||||||
Area of real estate property (in sqft) | ft² | 8,171 | |||||||
Future minimum commitment under non-cancelable operating lease | $ 23,300 | $ 22,000 | $ 2,413,733 | |||||
Lessee Leasing Arrangements, Operating Leases, Increases to Monthly Payments, Term | 3 years | 2 years | ||||||
Additional area of office space for headquarters facility | ft² | 5,265 | |||||||
Rent expense | $ 462,000 | $ 221,000 | $ 375,000 | $ 230,000 | ||||
Ivyland, Pennsylvania [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Area of real estate property (in sqft) | ft² | 2,100 | 2,100 | ||||||
NeoForce Group, Inc. [Member] | NeoForce, Inc [Member] | ||||||||
Loss Contingencies [Line Items] | ||||||||
Fair value of royalty | $ 153,000 | $ 188,000 | $ 153,000 | |||||
Royalty payment period | 36 months | 36 months | ||||||
Noncurrent fair value of royalty | $ 144,000 |
Stockholders' Equity (Deficit43
Stockholders' Equity (Deficit) - Additional Information (Detail) | Jun. 29, 2016$ / sharesshares | Mar. 16, 2016shares | Jan. 27, 2016shares | Jan. 05, 2016shares | Oct. 12, 2015Closings$ / sharesshares | Jul. 31, 2015shares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2016shares | Mar. 31, 2016shares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Closings$ / sharesshares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)$ / sharesshares | Dec. 31, 2014USD ($)$ / sharesshares | Jun. 28, 2016$ / shares | Jan. 08, 2016shares | Dec. 31, 2013shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | 10,000,000 | ||||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | ||||||||||||||
Fair value of consideration transferred | $ | $ 3,400,000 | ||||||||||||||||
Loss on extinguishment of convertible preferred stock | $ | $ 3,651,000 | $ 0 | 3,651,000 | $ 0 | |||||||||||||
Stock-based compensation expense | $ | $ 206,000 | $ 144,000 | $ 560,000 | 746,000 | $ 942,369 | $ 345,435 | |||||||||||
Aggregate VWAP (percent) | 1.00% | 1.00% | |||||||||||||||
Number of options granted | 955,713 | 926,384 | |||||||||||||||
Weighted average grant date fair value per option granted (in dollars per share) | $ / shares | $ 1.66 | $ 1.03 | |||||||||||||||
Future stock-based compensation for unvested employee options granted and outstanding | $ | $ 1,917,245 | ||||||||||||||||
Stock options outstanding, intrinsic value | $ | $ 67,165 | ||||||||||||||||
Warrants cashless exercised (in shares) | 43,720 | ||||||||||||||||
Issuance of shares upon cashless exercise warrants (in shares) | 13,407 | ||||||||||||||||
Warrants Issued in 2009 to Purchase Common Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 21.60 | $ 21.60 | $ 21.60 | ||||||||||||||
Warrants outstanding (in shares) | 9,259 | 9,259 | 9,259 | ||||||||||||||
Warrants term | 10 years | 10 years | |||||||||||||||
Series D Warrants [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.75 | $ 2.46 | $ 2.46 | ||||||||||||||
Effect of modifying the exercise price | $ | $ 203,000 | ||||||||||||||||
Warrants outstanding (in shares) | 1,280,324 | ||||||||||||||||
Warrants term | 5 years | 5 years | |||||||||||||||
Aggregate VWAP (percent) | 1.00% | 1.00% | |||||||||||||||
Underwriter [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 7.14 | $ 7.14 | $ 7.14 | ||||||||||||||
Warrants outstanding (in shares) | 82,500 | 82,500 | 82,500 | ||||||||||||||
Warrants term | 10 years | 10 years | |||||||||||||||
2010 and 2012 Convertible Promissory Notes [Member] | Warrants to Purchase Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 4.87 | $ 4.87 | $ 4.87 | ||||||||||||||
Warrants outstanding (in shares) | 480,147 | 480,147 | 480,147 | ||||||||||||||
Warrants term | 10 years | 10 years | |||||||||||||||
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 | 139,839 | 139,839 | ||||||||||||||
Annual increases in the number of shares available for issuance, percentage of outstanding common stock | 1.00% | 1.00% | |||||||||||||||
Annual increases in the number of shares available for issuance, number of shares | 279,680 | 279,680 | |||||||||||||||
Minimum [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Percentage of voting rights of stock | 10.00% | 10.00% | 10.00% | ||||||||||||||
NSO [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Percentage of fair market value | 85.00% | 85.00% | |||||||||||||||
Stock Options [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Vesting period | 4 years | 4 years | |||||||||||||||
Income tax benefit from stock compensation expense | $ | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||||||
Shares available for sale under the ESPP | 6,149 | 606,061 | 124,824 | ||||||||||||||
Annual increases in the number of shares available for issuance, number of shares | 270,764 | ||||||||||||||||
Number of options granted | 955,713 | 926,384 | |||||||||||||||
Future stock-based compensation, requisite service period | 2 years 6 months | ||||||||||||||||
Stock Options [Member] | Minimum [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Percentage of fair market value | 110.00% | 110.00% | |||||||||||||||
Stock Options [Member] | Maximum [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Contractual term of option | 10 years | 10 years | |||||||||||||||
ISOs [Member] | Maximum [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Contractual term of option | 5 years | 5 years | |||||||||||||||
Common Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Number of shares issued upon conversion (in shares) | 900,000 | 900,000 | 900,000 | 300,000 | 900,000 | ||||||||||||
Issuance of shares upon cashless exercise warrants (in shares) | 905 | ||||||||||||||||
Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Convertible preferred stock, shares authorized | 10,000,000 | 10,000,000 | 40,000 | 40,000 | |||||||||||||
Convertible preferred stock, shares issued | 0 | 0 | 4,555 | 0 | 10,000 | ||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||||||||
Convertible preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | $ 1,000 | ||||||||||||||
Number of shares converted (in shares) | 1,665 | 1,665 | 1,665 | 555 | 1,665 | ||||||||||||
Series B Convertible Preferred Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Convertible preferred stock, shares issued | 13,780 | 13,780 | 0 | ||||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||||||||||
Convertible preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 | |||||||||||||||
Sabby Management, LLC [Member] | Common Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Ownership percentage (percent) | 4.99% | ||||||||||||||||
Sabby Management, LLC [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Number of closings | Closings | 2 | ||||||||||||||||
2015 Sabby Purchase Agreement [Member] | Series D Warrants [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 2.46 | ||||||||||||||||
Warrants outstanding (in shares) | 2,810,811 | ||||||||||||||||
2016 Sabby Purchase Agreement [Member] | Series D Warrants [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Warrants outstanding (in shares) | 2,702,704 | ||||||||||||||||
2016 Sabby Purchase Agreement [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Shares repurchased (in shares) | 7,780 | ||||||||||||||||
2016 Sabby Purchase Agreement [Member] | Sabby Management, LLC [Member] | Common Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Ownership percentage (percent) | 4.99% | ||||||||||||||||
2016 Sabby Purchase Agreement [Member] | Sabby Management, LLC [Member] | Series A Convertible Preferred Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Shares repurchased (in shares) | 7,780 | ||||||||||||||||
2016 Sabby Purchase Agreement [Member] | Sabby Management, LLC [Member] | Series B Convertible Preferred Stock [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Number of closings | Closings | 2 | ||||||||||||||||
Maxim Group Llc [Member] | 2016 Sabby Purchase Agreement [Member] | Series D Warrants [Member] | |||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 1.75 | ||||||||||||||||
Warrants outstanding (in shares) | 120,000 | 108,108 | |||||||||||||||
Warrants term | 5 years |
Stockholders' Equity (Deficit44
Stockholders' Equity (Deficit) - Summary of Stock Based Compensation Expense (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Total stock compensation expense | $ 206,000 | $ 144,000 | $ 560,000 | $ 746,000 | $ 942,369 | $ 345,435 |
Research & Development [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Total stock compensation expense | 41,000 | 27,000 | 116,000 | 99,000 | 148,948 | 64,020 |
Sales & Marketing [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Total stock compensation expense | 11,000 | 17,000 | 22,000 | 51,000 | 62,533 | 8,335 |
General & Administrative [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||||
Total stock compensation expense | $ 154,000 | $ 100,000 | $ 422,000 | $ 596,000 | $ 730,888 | $ 273,080 |
Net loss per share - Schedule o
Net loss per share - Schedule of Potentially Dilutive Securities Outstanding Excluded from Computations of Diluted Weighted-Average Shares Outstanding (Detail) - shares | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | |
Underwriter [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 82,500 | 82,500 | 82,500 | 82,500 | 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 excluded from computations of diluted weighted-average shares outstanding | 2,425,605 | 2,425,605 | 2,425,605 | 2,425,605 | 2,425,605 | 2,449,605 |
Series B Warrants to Purchase Shares of Common Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 0 | 527,573 | 0 | 527,573 | 116,580 | 2,449,605 |
Series C Warrant to Purchase Common Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 590,415 | 590,415 | 590,415 | 590,415 | 590,415 | 0 |
Series D Warrant To Purchase Common Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 2,930,812 | 0 | 2,930,812 | 0 | 1,280,324 | 0 |
Warrants Issued to 2010/2012 Convertible Note Holders to Purchase Common Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 480,147 | 480,147 | 480,147 | 480,147 | 480,147 | 523,867 |
Options to Purchase Common Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 2,938,152 | 1,863,171 | 2,938,152 | 1,863,171 | 1,858,839 | 1,072,011 |
Warrants Issued in 2009 to Purchase Common Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 9,259 | 9,259 | 9,259 | 9,259 | 9,259 | 9,259 |
Convertible Preferred Stock [Member] | ||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||||
Antidilutive securities excluded from computations of diluted weighted-average shares outstanding | 13,780,000 | 0 | 13,780,000 | 0 | 2,462,162 | 0 |
Convertible preferred stock, shares outstanding | 13,780 | 13,780 |
Subsequent Events (Detail)
Subsequent Events (Detail) | Nov. 07, 2016Fundshares | Mar. 16, 2016shares | Feb. 12, 2016shares | Jan. 27, 2016shares | Jan. 08, 2016USD ($)$ / sharesshares | Jan. 05, 2016Fundshares | Oct. 15, 2015USD ($) | Jun. 30, 2016shares | Mar. 31, 2016shares | Mar. 25, 2016shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($)shares | Dec. 31, 2014USD ($)shares |
Subsequent Event [Line Items] | ||||||||||||||
Number of funds managed | Fund | 2 | |||||||||||||
Expenses related stock issuance | $ | $ 0 | $ 530,000 | $ 575,181 | $ 2,117,217 | ||||||||||
Warrants cashless exercised | 43,720 | |||||||||||||
Common stock, shares issued | 485,202 | 15,761,530 | 14,017,909 | 6,769,106 | ||||||||||
Series D Warrants [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Proceeds from warrants | $ | $ 5,000,000 | |||||||||||||
Expenses related stock issuance | $ | $ 500,000 | |||||||||||||
Warrants outstanding | 1,280,324 | |||||||||||||
Series B Warrant Liability [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Warrants outstanding | 116,580 | |||||||||||||
Warrants cashless exercised | 102,300 | 1,713,045 | ||||||||||||
Number of warrants expired in period | 14,280 | |||||||||||||
Subsequent Event [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of funds managed | Fund | 2 | |||||||||||||
Sabby Management, LLC [Member] | Series D Warrants [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of warrants issued | 1,471,622 | |||||||||||||
Maxim Group Llc [Member] | Series D Warrants [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of warrants issued | 58,865 | |||||||||||||
Series A Convertible Preferred Stock [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of shares converted (in shares) | 1,665 | 1,665 | 1,665 | 555 | 1,665 | |||||||||
Convertible preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | |||||||||||||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||||||
Expenses related stock issuance | $ | $ 71,000 | $ 0 | ||||||||||||
Series A Convertible Preferred Stock [Member] | Sabby Management, LLC [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Convertible preferred stock, shares issued | 5,445 | |||||||||||||
Expenses related stock issuance | $ | $ 500,000 | $ 400,000 | ||||||||||||
Common Stock [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of shares issued upon conversion (in shares) | 900,000 | 900,000 | 900,000 | 300,000 | 900,000 | |||||||||
Common Stock [Member] | Subsequent Event [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Shares converted on as-converted basis (in shares) | 200,000 | |||||||||||||
Series B Convertible Preferred Stock [Member] | Subsequent Event [Member] | ||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||
Number of shares converted (in shares) | 200 |
Description of Business - Addit
Description of Business - Additional Information (Detail) - USD ($) | Sep. 08, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Description Of Business [Line Items] | |||||
Business acquisition upfront cash payment | $ 0 | $ 1,000,000 | $ 1,000,000 | $ 0 | |
NeoForce, Inc [Member] | NeoForce Group, Inc. [Member] | |||||
Description Of Business [Line Items] | |||||
Business acquisition upfront cash payment | $ 1,000,000 |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Intangible Assets (Detail) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 957,620 | |
Accumulated Amortization | (40,813) | |
Net Amount | $ 916,807 | |
Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | 5 years |
Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 12 years | 12 years |
Patents And Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 697,890 | |
Accumulated Amortization | (32,155) | |
Net Amount | $ 665,735 | |
Patents And Trademark [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 5 years | |
Patents And Trademark [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful life | 12 years | |
Customer Contracts [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amount | $ 259,730 | |
Accumulated Amortization | (8,658) | |
Net Amount | $ 251,072 | |
Useful life | 10 years |
Summary of Significant Accoun49
Summary of Significant Accounting Policies - Future Amortization Expense (Detail) | Dec. 31, 2015USD ($) |
Finite-Lived Intangible Assets [Line Items] | |
2,016 | $ 99,343 |
2,017 | 99,343 |
2,018 | 99,343 |
2,019 | 99,343 |
2020 and thereafter | 519,435 |
Net Amount | 916,807 |
Patents And Trademark [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2,016 | 73,370 |
2,017 | 73,370 |
2,018 | 73,370 |
2,019 | 73,370 |
2020 and thereafter | 372,255 |
Net Amount | 665,735 |
Customer Contracts [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
2,016 | 25,973 |
2,017 | 25,973 |
2,018 | 25,973 |
2,019 | 25,973 |
2020 and thereafter | 147,180 |
Net Amount | $ 251,072 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 297,595 | $ 218,519 | |
Less accumulated depreciation and amortization | (211,850) | (160,912) | |
Property and equipment, net | $ 116,000 | 85,745 | 57,607 |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 236,366 | 180,238 | |
Computer Hardware [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 52,112 | 27,555 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 9,117 | $ 10,726 |
Property and Equipment, Net - A
Property and Equipment, Net - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 67,415 | $ 28,516 |
Credit Facility - Additional In
Credit Facility - Additional Information (Detail) - USD ($) | Sep. 29, 2014 | Oct. 31, 2014 |
Debt Disclosure [Abstract] | ||
Line of credit amount | $ 100,000 | |
Line of credit, fixed interest rate per annum | 6.00% | |
Line of credit, repayment term | 2 years | |
Amount of line of credit | $ 100,000 |
Commitments and Contingencies53
Commitments and Contingencies - Minimum Rental Payments (Detail) - USD ($) | Dec. 31, 2015 | Jul. 01, 2015 | Feb. 02, 2015 |
Commitments and Contingencies Disclosure [Abstract] | |||
2,016 | $ 698,945 | ||
2,017 | 750,118 | ||
2,018 | 629,923 | ||
2,019 | 334,747 | ||
Total | $ 2,413,733 | $ 23,300 | $ 22,000 |
Capital Stock - Additional Info
Capital Stock - Additional Information (Detail) | Sep. 30, 2016$ / sharesshares | Jan. 08, 2016shares | Dec. 31, 2015Vote$ / sharesshares | Dec. 31, 2014$ / sharesshares |
Class of Stock [Line Items] | ||||
Common stock, shares authorized | shares | 100,000,000 | 100,000,000 | 100,000,000 | |
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Number of votes per share | Vote | 1 | |||
Convertible preferred stock, shares authorized | shares | 10,000,000 | 10,000,000 | ||
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Series A Convertible Preferred Stock [Member] | ||||
Class of Stock [Line Items] | ||||
Convertible preferred stock, shares authorized | shares | 10,000,000 | 40,000 | 40,000 | |
Convertible preferred stock, shares issued | shares | 0 | 10,000 | 4,555 | 0 |
Convertible preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |
Convertible preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | $ 1,000 |
Stockholders' Equity (Deficit55
Stockholders' Equity (Deficit) - Stock Option Assumptions (Detail) - Stock Options [Member] | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 6 years 1 month 6 days | |
Dividend rate | 0.00% | 0.00% |
Minimum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 5 years 9 months 18 days | |
Risk-free interest rate | 1.60% | 1.60% |
Volatility | 56.00% | 43.00% |
Maximum [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected life (years) | 6 years 1 month 6 days | |
Risk-free interest rate | 1.70% | 1.80% |
Volatility | 66.00% | 59.00% |
Stockholders' Equity (Deficit56
Stockholders' Equity (Deficit) - Summary of Stock Option Transactions (Detail) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Number of Options Outstanding | ||
Options granted (in shares) | 955,713 | 926,384 |
Weighted Average Remaining Contractual Term | ||
Options vested at end of period (in years) | 7 years 5 months 19 days | 7 years 5 months 16 days |
Options vested and expected to vest at end of period (in years) | 8 years 9 months | 8 years 8 months 1 day |
Stock Options [Member] | ||
Shares Available for Grant | ||
Beginning balance (in shares) | 606,061 | 124,824 |
Additional shares authorized (in shares) | 270,764 | |
Options granted (in shares) | (955,713) | (926,384) |
Options canceled/forfeited (in shares) | 85,037 | 93,979 |
Ending balance (in shares) | 6,149 | 606,061 |
Number of Options Outstanding | ||
Beginning balance (in shares) | 1,072,011 | 239,606 |
Options granted (in shares) | 955,713 | 926,384 |
Options exercised (in shares) | (83,848) | |
Options canceled/forfeited (in shares) | (85,037) | (93,979) |
Ending balance (in shares) | 1,858,839 | 1,072,011 |
Options vested at end of period (in shares) | 922,927 | 578,889 |
Options vested and expected to vest at end of period (in shares) | 1,858,839 | 1,072,011 |
Weighted-Average Exercise Price per Share | ||
Beginning balance (in dollars per share) | $ 6.34 | $ 3.36 |
Options granted (in dollars per share) | 3.08 | 7.15 |
Options exercised (in dollars per share) | 3.50 | |
Options canceled/forfeited (in dollars per share) | 5.03 | 6.75 |
Ending balance (in dollars per share) | 4.82 | 6.34 |
Options vested at end of period (in dollars per share) | 5.06 | 5.58 |
Options vested and expected to vest at end of period (in dollars per share) | $ 4.82 | $ 6.34 |
Weighted Average Remaining Contractual Term | ||
Weighted average remaining contractual term (in years) | 8 years 9 months | 8 years 8 months 1 day |
Stock Options [Member] | 2014 Plan [Member] | ||
Shares Available for Grant | ||
Additional shares authorized (in shares) | 1,437,165 | |
Stock Options [Member] | Closed 2010 Plan [Member] | ||
Shares Available for Grant | ||
Options Available, Expired (in shares) | (123,523) |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Income Tax Expense by Applying Statutory U.S. Federal Income Tax Rate to Income Before Income Taxes (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | ||
Tax on the loss before income tax expense computed at the federal statutory rate of 34% | $ (5,408,551) | $ (4,717,063) |
State tax (benefit) at statutory rate, net of federal benefit | (928,107) | (13,020) |
Change in Valuation Allowance | 4,199,154 | 1,578,347 |
Change in research and development credits | (60,991) | 316,311 |
Change in fair value of warrants | 1,493,215 | 2,960,766 |
Other | 705,280 | (125,341) |
Income tax expense | $ 0 | $ 0 |
Effective income tax rate | 0.00% | 0.00% |
Federal statutory rate percentage | 34.00% | 34.00% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Detail) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Non-Current Deferred Tax Assets: | ||
Reserves and accruals | $ 287,850 | $ 71,953 |
Net Operating Loss Carryforwards | 26,174,912 | 22,125,807 |
Research and development credits | 1,381,296 | 1,345,833 |
Intangible Assets | 46,784 | |
Intangible Assets | (74,113) | |
Fixed Assets | 9,080 | |
Fixed Assets | (10,505) | |
Total Non-Current Deferred Tax Assets | 27,779,025 | 23,579,872 |
Valuation Allowance | (27,779,025) | (23,579,872) |
Net Deferred Tax Assets | $ 0 | $ 0 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Contingency [Line Items] | ||
Increase in the valuation allowance | $ 4,199,154 | |
Unrecognized tax benefit offset by change in valuation allowance | 691,697 | |
Unrecognized tax benefits impacting effective tax rate | 0 | $ 0 |
U.S. Federal Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 67,263,865 | |
U.S. Federal Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforwards | 1,328,082 | |
State Tax Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Operating loss carryforwards | 56,650,176 | |
State Tax Jurisdiction [Member] | Research Tax Credit Carryforward [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax credit carryforwards | $ 977,574 |
Income Taxes - Summary of Gross
Income Taxes - Summary of Gross Unrecognized Tax Benefits (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Beginning balance | $ 673,247 | $ 0 |
Increase related to prior year tax positions | 0 | 628,383 |
Decreases related to prior year tax positions | (13,207) | 0 |
Increase related to Current year tax positions | 31,657 | 44,864 |
Decreases related to current year tax positions | 0 | 0 |
Ending Balance | $ 691,697 | $ 673,247 |
NeoForce Group, Inc. Acquisit61
NeoForce Group, Inc. Acquisition - Additional Information (Detail) - USD ($) | Sep. 08, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Business acquisition upfront cash payment | $ 0 | $ 1,000,000 | $ 1,000,000 | $ 0 | |
NeoForce Group, Inc. [Member] | |||||
Business Acquisition [Line Items] | |||||
Revenue of acquiree | 279,000 | ||||
Net income of acquiree | 76,000 | ||||
NeoForce Group, Inc. [Member] | NeoForce, Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Business acquisition upfront cash payment | $ 1,000,000 | ||||
Royalty payment period | 36 months | 36 months | |||
Royalty payable | 8,372 | ||||
Fair value of royalty | $ 153,000 | $ 188,000 | 153,000 | ||
Fair value inputs, discount rate | 20.00% | 20.00% | |||
Amortization | $ 53,000 | $ 53,000 |
NeoForce Group, Inc. Acquisit62
NeoForce Group, Inc. Acquisition - Schedule of Aggregate Purchase Price Consideration (Detail) - USD ($) | Sep. 08, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Cash consideration | $ 0 | $ 1,000,000 | $ 1,000,000 | $ 0 | |
NeoForce Group, Inc. [Member] | NeoForce, Inc [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ 1,000,000 | ||||
Fair value of contingent consideration | 153,000 | ||||
Total purchase price consideration | $ 1,153,000 |
NeoForce Group, Inc. Acquisit63
NeoForce Group, Inc. Acquisition - Fair Values of Assets Acquired (Detail) - USD ($) | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 08, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | ||||
Other intangible assets, net | $ 718,000 | $ 718,003 | $ 0 | |
NeoForce Group, Inc. [Member] | NeoForce, Inc [Member] | ||||
Business Acquisition [Line Items] | ||||
Net tangible assets acquired | $ 39,377 | |||
Other intangible assets, net | 718,003 | |||
Net Assets Acquired | 1,153,000 | |||
NeoForce Group, Inc. [Member] | NeoForce, Inc [Member] | Customer Contracts [Member] | ||||
Business Acquisition [Line Items] | ||||
Net intangible assets acquired | 259,730 | |||
NeoForce Group, Inc. [Member] | NeoForce, Inc [Member] | Patents [Member] | ||||
Business Acquisition [Line Items] | ||||
Net intangible assets acquired | $ 135,890 |
NeoForce Group, Inc. Acquisit64
NeoForce Group, Inc. Acquisition - Schedule of Unaudited Pro Forma Financial Information (Detail) - NeoForce Group, Inc. [Member] - NeoForce, Inc [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Business Acquisition [Line Items] | ||
Pro forma total revenues | $ 1,168,846 | $ 987,853 |
Pro forma net loss | $ (16,002,126) | $ (13,307,030) |
Pro forma net loss per share - basic and diluted (in dollars per share) | $ (1.70) | $ (10.48) |
Pro forma weighted-average shares-basic and diluted (shares) | 9,425,880 | 1,270,033 |