Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2015 | Mar. 07, 2016 | Jun. 30, 2015 | |
Document and Entity Information | |||
Entity Registrant Name | Avinger Inc | ||
Entity Central Index Key | 1,506,928 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2015 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $ 158 | ||
Entity Common Stock, Shares Outstanding | 12,692,189 | ||
Document Fiscal Year Focus | 2,015 | ||
Document Fiscal Period Focus | FY |
BALANCE SHEETS
BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Current assets: | ||
Cash and cash equivalents | $ 43,059 | $ 12,316 |
Accounts receivable, net of allowance for doubtful accounts of $20 at December 31, 2015 and 2014 | 2,060 | 2,068 |
Inventories | 5,405 | 3,991 |
Prepaid expenses and other current assets | 533 | 425 |
Total current assets | 51,057 | 18,800 |
Property and equipment, net | 2,822 | 2,608 |
Other assets | 225 | 3,029 |
Total assets | 54,104 | 24,437 |
Current liabilities: | ||
Accounts payable | 1,113 | 1,013 |
Accrued compensation | 3,083 | 1,147 |
Accrued expenses and other current liabilities | 3,285 | 4,850 |
Borrowings, current portion | 1,873 | |
Total current liabilities | 7,481 | 8,883 |
Borrowings, net of current portion | 29,565 | 18,228 |
Convertible notes and accrued interest | 8,609 | |
Other long-term liabilities | 1,469 | 325 |
Total liabilities | $ 38,515 | $ 36,045 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity (deficit): | ||
Preferred stock issuable in series, par value of $0.001 Shares authorized: 5,000,000 at December 31, 2015 and none at December 31, 2014 Shares issued and outstanding: none at December 31, 2015 and 2014 | ||
Common stock, par value of $0.001; Shares authorized: 100,000,000 at December 31, 2015 and 15,555,555 at December 31, 2014; Shares issued and outstanding: 12,643,538 at December 31, 2015 and 243,260 at December 31, 2014 | $ 13 | |
Additional paid-in capital | 211,837 | $ 2,665 |
Accumulated deficit | (196,261) | (146,533) |
Total stockholders' equity (deficit) | 15,589 | (143,868) |
Total liabilities, convertible preferred stock, and stockholders' equity (deficit) | $ 54,104 | 24,437 |
Convertible preferred stock outstanding | ||
Current liabilities: | ||
Convertible preferred stock issuable in series, par value of $0.001 Shares authorized: none at December 31, 2015 and 6,819,197 at December 31, 2014 Shares issued and outstanding: none at December 31, 2015 and 5,262,728 at December 31, 2014 Liquidation preference: none at December 31, 2015 and $231,836 at December 31,2014 | $ 132,260 |
BALANCE SHEETS (Parenthetical)
BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Allowance for doubtful accounts (in dollars) | $ 20 | $ 20 |
Preferred stock, par value (in dollars per share) | $ 0.001 | |
Preferred stock, shares authorized | 5,000,000 | 0 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000,000 | 15,555,555 |
Common stock, shares issued | 12,643,538 | 243,260 |
Common stock, shares outstanding | 12,643,538 | 243,260 |
Convertible preferred stock outstanding | ||
Convertible preferred stock, par value (in dollars per share) | $ 0.001 | |
Convertible preferred stock, shares authorized | 0 | 6,819,197 |
Convertible preferred stock, shares issued | 0 | 5,262,728 |
Convertible preferred stock, shares outstanding | 0 | 5,262,728 |
Liquidation preference value (in dollars) | $ 0 | $ 231,836 |
STATEMENTS OF OPERATIONS AND CO
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | |||
Revenues | $ 10,713 | $ 11,213 | $ 12,964 |
Cost of revenues | 6,478 | 6,513 | 8,205 |
Gross profit | 4,235 | 4,700 | 4,759 |
Operating expenses: | |||
Research and development | 15,694 | 11,224 | 15,973 |
Selling, general and administrative | 29,231 | 18,503 | 25,758 |
Total operating expenses | 44,925 | 29,727 | 41,731 |
Loss from operations | (40,690) | (25,027) | (36,972) |
Interest income | 40 | 2 | 11 |
Interest expense | (5,167) | (6,016) | (2,934) |
Other income (expense), net | (1,527) | (909) | 5 |
Loss before provision for income taxes | (47,344) | (31,950) | (39,890) |
Provision for income taxes | 14 | 11 | |
Net loss and comprehensive loss | (47,344) | (31,964) | (39,901) |
Conversion of preferred stock to common stock in connection with the initial public offering | (2,384) | ||
Net loss and comprehensive loss attributable to common stockholders | $ (49,728) | $ (31,964) | $ (39,901) |
Net loss attributable to common stockholders per share, basic and diluted (in dollars per share) | $ (4.38) | $ (132.63) | $ (170.52) |
Weighted average common shares used to compute net loss per share, basic and diluted | 11,362 | 241 | 234 |
STATEMENTS OF CONVERTIBLE PREFE
STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT - USD ($) $ in Thousands | Common StockOther issuance | Common StockAnti-dilution provisions upon conversion of preferred stock | Common StockInitial Public Offering | Common StockSecurities Purchase Agreement | Common Stock | Additional Paid-in CapitalOther issuance | Additional Paid-in CapitalAnti-dilution provisions upon conversion of preferred stock | Additional Paid-in CapitalInitial Public Offering | Additional Paid-in CapitalSecurities Purchase Agreement | Additional Paid-in Capital | Accumulated Deficit | Convertible Preferred Stock Series A | Convertible Preferred Stock Series A-1 | Convertible Preferred Stock Series B | Convertible Preferred Stock Series C | Convertible Preferred Stock Series D | Convertible Preferred Stock Series E | Other issuance | Initial Public Offering | Securities Purchase Agreement | Total |
Balance (in shares) at Dec. 31, 2012 | 231,102 | 326,591 | 225,235 | 755,486 | 561,423 | 722,367 | |||||||||||||||
Increase (Decrease) in Shares | |||||||||||||||||||||
Issuance of stock, net (in shares) | 9,590 | ||||||||||||||||||||
Balance (in shares) at Dec. 31, 2013 | 240,692 | 326,591 | 225,235 | 755,486 | 561,423 | 722,367 | |||||||||||||||
Balance at Dec. 31, 2012 | $ 6,183 | $ 6,649 | $ 27,272 | $ 22,397 | $ 37,158 | ||||||||||||||||
Increase (Decrease) in Convertible Preferred Stock | |||||||||||||||||||||
Convertible Preferred Stock issuance costs | (5) | ||||||||||||||||||||
Balance at Dec. 31, 2013 | $ 6,183 | $ 6,649 | $ 27,272 | $ 22,397 | $ 37,153 | ||||||||||||||||
Balance at Dec. 31, 2012 | $ 1,024 | $ (74,668) | $ (73,644) | ||||||||||||||||||
Increase (Decrease) in Stockholders' (Deficit) Equity | |||||||||||||||||||||
Issuance of common stock, net | 109 | 109 | |||||||||||||||||||
Employee stock-based compensation | 654 | 654 | |||||||||||||||||||
Net and comprehensive loss | (39,901) | (39,901) | |||||||||||||||||||
Balance at Dec. 31, 2013 | 1,787 | (114,569) | (112,782) | ||||||||||||||||||
Increase (Decrease) in Shares | |||||||||||||||||||||
Issuance of stock, net (in shares) | 2,568 | 2,671,626 | |||||||||||||||||||
Balance (in shares) at Dec. 31, 2014 | 243,260 | 326,591 | 225,235 | 755,486 | 561,423 | 722,367 | 2,671,626 | ||||||||||||||
Increase (Decrease) in Convertible Preferred Stock | |||||||||||||||||||||
Issuance of Convertible Preferred Stock, net of issuance costs | $ 32,606 | ||||||||||||||||||||
Balance at Dec. 31, 2014 | $ 6,183 | $ 6,649 | $ 27,272 | $ 22,397 | $ 37,153 | $ 32,606 | |||||||||||||||
Increase (Decrease) in Stockholders' (Deficit) Equity | |||||||||||||||||||||
Issuance of common stock, net | 28 | 28 | |||||||||||||||||||
Employee stock-based compensation | 641 | 641 | |||||||||||||||||||
Issuance of common stock warrants | 175 | 175 | |||||||||||||||||||
Reclass of warrants to additional paid-in capital | 34 | 34 | |||||||||||||||||||
Net and comprehensive loss | (31,964) | (31,964) | |||||||||||||||||||
Balance at Dec. 31, 2014 | 2,665 | (146,533) | (143,868) | ||||||||||||||||||
Increase (Decrease) in Shares | |||||||||||||||||||||
Issuance of stock, net (in shares) | 49,621 | 1,214,725 | 5,000,000 | 348,262 | 490,472 | ||||||||||||||||
Conversion of preferred stock to common stock in connection with the initial public offering (in shares) | 5,753,200 | (326,591) | (225,235) | (755,486) | (561,423) | (722,367) | (3,162,098) | ||||||||||||||
Exercise of common stock warrants (in shares) | 34,470 | ||||||||||||||||||||
Balance (in shares) at Dec. 31, 2015 | 12,643,538 | ||||||||||||||||||||
Increase (Decrease) in Convertible Preferred Stock | |||||||||||||||||||||
Issuance of Convertible Preferred Stock, net of issuance costs | $ 6,125 | ||||||||||||||||||||
Conversion of preferred stock to common stock in connection with the initial public offering | $ (6,183) | $ (6,649) | $ (27,272) | $ (22,397) | $ (37,153) | $ (38,731) | (2,384) | ||||||||||||||
Increase (Decrease) in Stockholders' (Deficit) Equity | |||||||||||||||||||||
Issuance of common stock, net | $ 1 | $ 5 | $ 1 | $ 432 | $ (1) | $ 56,893 | $ 4,794 | $ 432 | $ 56,898 | $ 4,795 | |||||||||||
Employee stock-based compensation | 5,899 | 5,899 | |||||||||||||||||||
Vesting of restricted stock subject to repurchase | 18 | 18 | |||||||||||||||||||
Issuance of common stock warrants | 804 | 804 | |||||||||||||||||||
Exercise of common stock warrants | 323 | 323 | |||||||||||||||||||
Conversion of preferred stock to common stock in connection with the initial public offering | $ 6 | 137,626 | 137,632 | ||||||||||||||||||
Convertible preferred stock modification | 2,384 | (2,384) | |||||||||||||||||||
Net and comprehensive loss | (47,344) | (47,344) | |||||||||||||||||||
Balance at Dec. 31, 2015 | $ 13 | $ 211,837 | $ (196,261) | $ 15,589 |
CONDENSED STATEMENTS OF CASH FL
CONDENSED STATEMENTS OF CASH FLOWS - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash flows from operating activities | |||
Net loss | $ (47,344,000) | $ (31,964,000) | $ (39,901,000) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 1,300,000 | 1,451,000 | 1,501,000 |
Amortization of debt issuance costs and debt discount | 199,000 | 212,000 | 133,000 |
Stock-based compensation | 5,899,000 | 641,000 | 654,000 |
Remeasurement of warrant liability and embedded derivatives | (835,000) | (378,000) | 1,000 |
Write off of embedded derivatives | 1,066,000 | ||
Noncash interest expense and other charges | 2,074,000 | 3,485,000 | 1,221,000 |
Loss on extinguishment of convertible notes | 86,000 | 1,234,000 | |
Provision for doubtful accounts receivable | 45,000 | ||
Provision for excess and obsolete inventories | (26,000) | (48,000) | 15,000 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 7,000 | (441,000) | (443,000) |
Inventories | (2,307,000) | 1,714,000 | (3,069,000) |
Prepaid expenses and other current assets | (363,000) | 444,000 | (230,000) |
Other assets | (35,000) | 2,000 | 139,000 |
Accounts payable | 84,000 | 17,000 | (275,000) |
Accrued compensation | 1,936,000 | (128,000) | 281,000 |
Accrued expenses and other current liabilities | (962,000) | 2,080,000 | (523,000) |
Other long-term liabilities and accrued interest | (1,662,000) | (122,000) | (204,000) |
Net cash used in operating activities | (40,883,000) | (21,801,000) | (40,655,000) |
Cash flows from investing activities: | |||
Purchase of property and equipment | (577,000) | (117,000) | (496,000) |
Restricted cash | 255,000 | ||
Net cash used in investing activities | (322,000) | (117,000) | (496,000) |
Cash flows from financing activities: | |||
Principal paydown of capital lease obligations | (22,000) | (17,000) | (18,000) |
Payments on borrowing | (27,625,000) | ||
Proceeds from convertible notes, net of issuance costs | 4,700,000 | 13,399,000 | |
Proceeds from borrowing, net of issuance costs | 29,124,000 | 19,281,000 | |
Proceeds from the issuance of convertible preferred stock, net of issuance costs | 6,176,000 | 19,155,000 | (5,000) |
Proceeds from the issuance of common stock related to CRG loan, net of issuance costs | 4,794,000 | ||
Proceeds from initial public offering, net of issuance costs | 58,746,000 | ||
Proceeds from the exercise of common stock warrants | 323,000 | ||
Payments for deferred initial public offering costs | (1,848,000) | ||
Proceeds from the issuance of common stock | 432,000 | 23,000 | 98,000 |
Net cash provided by financing activities | 71,948,000 | 22,013,000 | 32,755,000 |
Net change in cash and cash equivalents | 30,743,000 | 95,000 | (8,396,000) |
Cash and cash equivalents, beginning of period | 12,316,000 | 12,221,000 | 20,617,000 |
Cash and cash equivalents, end of period | 43,059,000 | 12,316,000 | 12,221,000 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | 5,934,000 | 2,281,000 | 1,587,000 |
Noncash investing and financing activities: | |||
Conversion of preferred stock to common stock in connection with the initial public offering | 137,632,000 | ||
Accounts payable for purchases of property and equipment | 16,000 | 20,000 | |
Capital lease obligations for property and equipment | 23,000 | ||
Modification of convertible preferred stock | 2,384,000 | ||
Reclass of warrants to additional paid-in capital | 34,000 | ||
Vesting of common stock subject to repurchase | 18,000 | 5,000 | 10,000 |
Embedded derivatives associated with convertible notes | 179,000 | ||
Issuance of common stock warrants | 804,000 | 175,000 | 1,000 |
Transfer between inventory and property and equipment | $ 921,000 | (916,000) | $ 1,829,000 |
Conversion of convertible notes and accrued interest into Series E convertible preferred stock | $ 11,582,000 |
Organization
Organization | 12 Months Ended |
Dec. 31, 2015 | |
Organization | |
Organization | 1. Organization Organization, Nature of Business Avinger, Inc. (the “Company”), a Delaware corporation, was founded in March 2007 by cardiologist and medical device entrepreneur Dr. John B. Simpson. The Company designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral artery disease (“PAD”). Patients with PAD have a build-up of plaque in the arteries that supply blood to areas away from the heart, particularly the pelvis and legs. The Company manufactures and sells a suite of products in the United States (“U.S.”) and in select European markets. The Company has developed its Lumivascular platform, which integrates optical coherence tomography (“OCT”) visualization with interventional catheters and is the industry’s only system that provides real-time intravascular imaging during the treatment portion of PAD procedures. The Company’s Lumivascular platform consists of a capital component, Lightbox, as well as a variety of disposable catheter products. The Company’s current products include its non-imaging catheters, Wildcat and Kittycat, as well as its Lumivascular platform products, Ocelot, Ocelot PIXL and Ocelot MVRX, all of which are designed to allow physicians to penetrate a total blockage in an artery, known as a chronic total occlusion (“CTO”). In March 2016, the Company also received 510(k) clearance from the U.S. Food and Drug Administration (“FDA”) for commercialization of Pantheris, the Company’s image-guided atherectomy system, designed to allow physicians to precisely remove arterial plaque in PAD patients. The Company commenced sales of Pantheris in the U.S. and select European markets promptly thereafter. The Company is located in Redwood City, California. Liquidity Matters In the course of its activities, the Company has incurred losses and negative cash flows from operations since its inception. As of December 31, 2015, the Company had an accumulated deficit of $196,261,000. The Company expects to incur losses for the foreseeable future. The Company believes that its cash and cash equivalents of $43,059,000 at December 31, 2015, expected revenues and additional $10,000,000 available under the loan agreement with CRG Partners III L.P. and certain of its affiliated funds (collectively “CRG ”) will be sufficient to allow the Company to fund its current operations until at least December 31, 2016. The Company is eligible to borrow the additional $10,000,000 in principal amount from CRG, on or prior to June 30, 2016. Consistent with its 2016 operating plan, the Company will need to acquire additional funding in the form of debt financing or equity issuances to make strategic investments in its business, however, there can be no assurance that such efforts will be successful or that, in the event that they are successful, the terms and conditions of such financing will be favorable. If the Company’s revenue levels from its products are not sufficient or if the Company is unable to secure additional funding when desired, the Company may need to delay the development, commercialization and marketing of its products and scale back its business and operations. The Company’s ultimate success will largely depend on its ability to successfully commercialize its products and its ability to raise additional funding. Initial Public Offering In January 2015, the Company issued and sold 5,000,000 shares of its common stock in its initial public offering (“IPO”) at a public offering price of $13.00 per share, for net proceeds of approximately $56,897,000 after deducting underwriting discounts and commissions of approximately $4,550,000 and expenses of approximately $3,553,000. Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into an aggregate of 6,967,925 shares of common stock resulting in the reclassification of $137,626,000 from outside of stockholders’ equity (deficit) to additional paid-in capital. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation On January 14, 2015, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-45 reverse stock split of the Company’s common stock and convertible preferred stock. The par value of the common stock and convertible preferred stock was not adjusted as a result of the reverse stock split. All common stock, convertible preferred stock, stock options and warrants, and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split. The reverse stock split was effected on January 28, 2015. The financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. Management uses significant judgment when making estimates related to its common stock valuation and related stock-based compensation, the valuation of the common stock warrants, the valuation of compound embedded derivatives, provisions for doubtful accounts receivable and excess and obsolete inventories, clinical trial accruals, and its reserves for sales returns and warranty costs. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. Fair Value of Financial Instruments The Company has evaluated the estimated fair value of its financial instruments as of December 31, 2015 and 2014. Financial instruments consist of cash and cash equivalents, accounts receivable and payable, and other current liabilities, borrowings, convertible notes and embedded derivatives. The carrying amounts of cash and cash equivalents, accounts receivable and payable, and other current liabilities approximate their respective fair values because of the short-term nature of those instruments. Based upon the borrowing terms and conditions currently available to the Company, the carrying values of the borrowings approximate their fair value. Fair value accounting is applied to the warrant liabilities and embedded derivatives. No warrant liabilities or embedded derivatives were outstanding as of December 31, 2015. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are considered available-for-sale marketable securities and are recorded at fair value, based on quoted market prices. As of December 31, 2015 and 2014, the Company’s cash equivalents are entirely comprised of investments in money market funds. Any related unrealized gains and losses are recorded in other comprehensive income (loss) and included as a separate component of stockholders’ deficit. There were no unrealized gains and losses as of December 31, 2015 and 2014. Any realized gains and losses and interest and dividends on available-for-sale securities are included in interest income or expense and computed using the specific identification cost method. Restricted Cash At December 31, 2014, a deposit of $255,000 was restricted from withdrawal. The restricted cash secured obligations of the Company associated with its corporate credit card. The restricted deposit account was included in prepaid expenses and other current assets. During 2015, the Company was no longer required to secure its corporate card obligations; accordingly the $255,000 is included within cash and cash equivalents as of December 31, 2015. The release of the restriction against the Company’s cash was included within investing activities on its statement of cash flows for the year ended December 31, 2015. Concentration of Credit Risk, and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable to the extent of the amounts recorded on the balance sheets. The Company’s policy is to invest in cash and cash equivalents, consisting of money market funds. These financial instruments are held in Company accounts at one financial institution. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at December 31, 2015 and 2014. The Company’s accounts receivable are due from a variety of health care organizations in the United States and select European markets. At December 31, 2015 and 2014, there were one and none, respectively, of the Company’s customers that represented 10% or more of the Company’s accounts receivable. For the years ended December 31, 2015, 2014 and 2013, there were no customers that represented 10% or more of revenues. Disruption of sales orders or a deterioration of financial condition of its customers would have a negative impact on the Company’s financial position and results of operations. The Company manufactures certain of its commercial products in-house, including the production of the Ocelot family of catheters. Certain of the Company’s product components and sub-assemblies continue to be manufactured by sole suppliers. Disruption in component or sub-assembly supply from these manufacturers or from in-house production would have a negative impact on the Company’s financial position and results of operations. The Company is subject to certain risks, including that its devices may not be approved or cleared for marketing by governmental authorities or be successfully marketed. There can be no assurance that the Company’s products will continue to be accepted in the marketplace, nor can there be any assurance that any future devices can be developed or manufactured at an acceptable cost and with appropriate performance characteristics. The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, dependence upon third-party payors to provide adequate coverage and reimbursement, dependence on key personnel and suppliers, protection of proprietary technology, product liability claims, and compliance with government regulations. Existing or future devices developed by the Company may require approvals or clearances from the FDA or international regulatory agencies. In addition, in order to continue the Company’s operations, compliance with various federal and state laws is required. If the Company were denied or delayed in receiving such approvals or clearances, it may be necessary to adjust operations to align with the Company’s currently approved portfolio. If clearance for the products in the current portfolio were withdrawn by the FDA, this may have a material adverse impact on the Company. Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience, and management judgment. Accounts receivable balances are reviewed individually for collectability. To date, the Company has not experienced significant credit-related losses. Inventories Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method for all inventories. The Company’s policy is to write down inventory that has expired or become obsolete, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected requirements. The estimate of excess quantities is subjective and primarily dependent on the estimates of future demand for a particular product. If the estimate of future demand is too high, the Company may have to increase the reserve for excess inventory for that product and record a charge to the cost of revenues. Inventory used in clinical trials is expensed at the time of production and recorded as research and development expense. Property and equipment Property and equipment are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets of three to five years. Depreciation expense includes the amortization of assets acquired under capital leases and equipment located at customer sites. Equipment held by customers is comprised of the Lightboxes located at customer sites under a lease agreement and are recorded at cost. Upon execution of a lease agreement, the related equipment is reclassified from inventory to the property and equipment account. Depreciation expense for equipment held by customers is recorded as a component of cost of revenues. Leasehold improvements and assets recorded under capital leases are amortized using the straight-line method over the shorter of the lease term or estimated useful economic life of the asset. Deferred Offering Costs Deferred offering costs, which primarily consist of direct incremental legal and accounting fees relating to an offering of equity securities, were capitalized. As of December 31, 2014, $2,608,000 of deferred offering costs were capitalized in other assets on the balance sheet, of which $1,848,000 had been paid. The Company incurred $3,553,000 in offering costs and in January 2015, these IPO costs were offset against the proceeds obtained from the Company’s IPO. Deferred offering costs of $29,000 were capitalized as of December 31, 2015. Impairment of Long-Lived Assets The Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. If indicators of impairment exist, an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. The Company has not recorded any impairment of long-lived assets since inception through December 31, 2015. Convertible Preferred Stock Prior to its IPO the Company recorded its convertible preferred stock at fair value on the dates of issuance, net of issuance costs and classified the convertible preferred stock outside of stockholders’ equity (deficit) on the balance sheets as events triggering the liquidation preferences were not solely within the Company’s control. Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into an aggregate of 6,967,925 shares of common stock resulting in the reclassification of $137,626,000 from outside of stockholders’ equity (deficit) to additional paid-in capital. Warrant Liability and Embedded Derivative Instruments The Company accounts for its warrants for shares of common stock in accordance with the accounting guidance for derivatives. The accounting guidance provides a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock and, therefore, qualifies for a scope exception. The two-step model requires a contract for a financial instrument to be both (1) indexed to the entity’s own stock and (2) classified in the stockholders’ equity (deficit) section of the balance sheet. If a financial instrument qualifies for a scope exception, it would not be considered a derivative financial instrument. As the price per share of the common stock warrants issued with the convertible notes was not fixed until the issuance of the Series E Convertible Preferred Stock in September 2014, these warrants were initially classified as a derivative liability. As a derivative liability, the warrants were initially recorded at fair value and were subject to remeasurement at each balance sheet date until September 2014. Any change in fair value as a result of a remeasurement was recognized as a component of other income (expense), net in the statements of operations and comprehensive loss. The Company re-evaluated the terms of the common stock warrants issued with the convertible notes after the issuance of the Series E Convertible Preferred Stock in September 2014 and determined that they then met the first criterion of the two-step model. Accordingly, the associated current fair value of the warrant liability was reclassified to additional paid-in capital in the stockholders’ equity (deficit) section of the balance sheet at that time, thus satisfying the second criterion of the two-step model. The convertible notes issued in 2013 and 2014 included features which were determined to be embedded derivatives requiring bifurcation and separate accounting. Prior to their extinguishment in September 2015, the Company recorded a compound derivative asset or liability related to redemption features embedded within its outstanding convertible notes. The embedded derivatives were initially recorded at fair value and are subject to remeasurement as of each balance sheet date. Any change in fair value is recognized as a component of other income (expense), net in the statements of operations and comprehensive loss. In September 2015, the Company repaid the outstanding convertible notes and accrued interest obligations in their entirety. Accordingly, the associated current fair value of the embedded derivative asset as remeasured at the date of extinguishment was expensed as a component of other income (expense), net in the statements of operations and comprehensive loss for the year ended December 31, 2015. Revenue Recognition The Company’s revenues are derived from (1) sale of its Lightbox (2) sale of disposables, which consist of catheters and accessories, and (3) sale of customer service contracts. The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605-10, Revenue Recognition, when persuasive evidence of an arrangement exists, the fee is fixed or determinable, collection of the fee is probable and delivery has occurred. For all sales, the Company uses either a signed agreement or a binding purchase order as evidence of an arrangement. The Company’s revenue recognition policies generally result in revenue recognition at the following points: 1. Lightbox sales: The Company sells its products directly to hospitals and medical centers. Provided all other criteria for revenue recognition have been met, the Company recognizes revenue for Lightbox sales directly to end customers when delivery and acceptance occurs, which is defined as receipt by the Company of an executed form by the customer acknowledging that the training and installation process is complete. 2. Sales of disposables: Disposable revenues consist of sales of the Company’s catheters and accessories and are recognized when the product has shipped, risk of loss and title has passed to the customer and collectability is reasonably assured. 3. Service revenue: Service revenue is recognized ratably over the term of the service period. To date service revenue has been insignificant. The Company offers its customers the ability to purchase or lease its Lightbox. The Company recovers the cost of providing the leased Lightbox through a premium in the amount charged for its disposable products in comparison to a standalone purchase. When a Lightbox is placed under a lease agreement, the Company retains title to the equipment and it remains capitalized on its balance sheet under property and equipment. Depreciation expense on these leased Lightboxes is recorded to cost of revenues on a straight-line basis. The costs to maintain these leased Lightboxes are charged to cost of revenues as incurred. The Company evaluates its lease agreements and accounts for these contracts under the guidance in ASC 840, Leases and ASC 605-25, Revenue Recognition—Multiple Element Arrangements . The guidance requires arrangement consideration to be allocated between a lease deliverable and a non-lease deliverable based upon the relative selling-price of the deliverables, using a specific hierarchy. The hierarchy is as follows: vendor- specific objective evidence of fair value of the respective elements, third-party evidence of selling price, or best estimate of selling price (“BESP”). The Company allocates arrangement consideration using BESP. The Company assessed whether the embedded lease is an operating lease or sales-type lease. Based on the Company’s assessment of the guidance and given that any payments under the lease agreements are dependent upon contingent future sales, it was determined that collectability of the minimum lease payments is not reasonably predictable. Accordingly, the Company concluded the embedded lease did not meet the criteria of a sales-type lease and accounts for it as an operating lease. The Company recognizes revenue allocated to the lease as the contingent disposable product purchases are delivered and are included in revenues within the statement of operations and comprehensive loss. The Company estimates reductions in revenue for potential returns of products by customers. In making such estimates, management analyzes historical returns, current economic trends and changes in customer demand and acceptance of its products. The Company expenses shipping and handling costs as incurred and includes them in the cost of revenues. In those cases where the Company bills shipping and handling costs to customers, it will classify the amounts billed as a component of revenue. Cost of Revenues Cost of revenues consists primarily of manufacturing overhead costs, material costs and direct labor. A significant portion of the Company’s cost of revenues currently consists of manufacturing overhead costs. These overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management. Cost of revenues also includes depreciation expense for the Lightboxes under lease agreements and certain direct costs such as shipping costs. Product Warranty Costs The Company typically offers a one-year warranty for parts and labor on its products commencing upon the transfer of title and risk of loss to the customer. The Company accrues for the estimated cost of product warranties upon invoicing its customers, based on historical results. The warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from these estimates, revisions to the estimated warranty liability would be required. Periodically the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Warranty provisions and claims are summarized as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance beginning of year $ $ $ Warranty provision Usage/Release ) ) ) Balance end of year $ $ $ Research and Development The Company expenses research and development costs as incurred. Research and development expenses include personnel and personnel-related costs, costs associated with pre-clinical and clinical development activities, and costs for prototype products that are manufactured prior to market approval for that prototype product; internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings; and overhead costs, including allocated facility and related expenses. Clinical Trials The Company accrues and expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company determines these estimates through discussion with internal personnel and outside service providers as to progress or stage of completion of trials or services pursuant to contracts with clinical research organizations and other service providers and the agreed-upon fee to be paid for such services. Advertising Costs The Company expenses advertising costs as incurred. Advertising costs include design and production costs, including website development, physician and patient testimonial videos, written media campaigns, and other items. Advertising costs of approximately $515,000, $720,000 and $321,000 were expensed during the years ended December 31, 2015, 2014 and 2013, respectively. Common Stock Valuation and Stock-Based Compensation Stock-based compensation for the Company includes amortization related to all stock options, restricted stock units and shares issued under the employee stock purchase plan, based on the grant-date estimated fair value. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model and recognized as expense on a straight-line basis over the vesting period of the award. The Company measures the fair value of restricted stock units (“RSUs”) using the closing stock price of a share of the Company’s common stock on the grant date and is recognized as expense on a straight-line basis over the vesting period of the award. Because noncash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. The Company estimates a forfeiture rate for its stock options and RSUs based on an analysis of its actual forfeitures based on actual forfeiture experience and other factors. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. Prior to the closing of the Company’s IPO in January 2015, the fair value of the Company’s common stock was determined by its Board of Directors with assistance from management and third-party valuation specialists. Management’s approach to estimate the fair value of the Company’s common stock is consistent with the methods outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . Management considered several factors to estimate enterprise value, including significant milestones that would generally contribute to increases in the value of the Company’s common stock. Following the closing of the Company’s IPO, the fair value of its common stock is determined based on the closing price of its common stock on The NASDAQ Global Market. Foreign Currency The Company records net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange losses in other income (expense), net. During the years ended December 31, 2015 and 2014, the Company recorded $18,000 and $21,000 of foreign currency exchange net losses, respectively, and $11,000 of net gains during the year ended December 31, 2013. Income Taxes The Company utilizes the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense when they occur. During the years ended December 31, 2015, 2014 and 2013, the Company did not recognize accrued interest or penalties related to unrecognized tax benefits. Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Common stock shares subject to repurchase are excluded from the calculations as the continued vesting of such shares is contingent upon the holders’ continued service to the Company. For the computation of net loss per share attributable to common stockholders, common stock shares subject to repurchase of none, 583 and 1,249 were excluded from the calculations as of December 31, 2015, 2014 and 2013, respectively. Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive. The Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. The shares of the Company’s convertible preferred stock participate in any dividends declared by the Company and are therefore considered to be participating securities.Net loss per share attributable to common stockholders was determined as follows (in thousands, except per share data): Year Ended December 31, 2015 2014 2013 Net loss $ ) $ ) $ ) Adjustment to net loss resulting from convertible preferred stock modification ) — — Net loss attributable to common stockholders $ ) $ ) $ ) Weighted average common stock outstanding Net loss attributable to common stockholders per share, basic and diluted $ ) $ ) $ ) In addition to the outstanding convertible notes as of December 31, 2014 and 2013 (Note 8), 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: December 31, 2015 2014 2013 Convertible preferred stock outstanding — Common stock options Unvested restricted stock units — — Common stock warrants Comprehensive Loss For the years ended December 31, 2015, 2014 and 2013, there was no difference between comprehensive loss and the Company’s net loss. Segment and Geographical Information The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets are based in the United States. Long-lived assets are comprised of property and equipment. For the years ended December 31, 2015, 2014 and 2013, 98%, 99% and 98%, respectively, of the Company’s revenues, were in the United States, based on the shipping location of the external customer. Change in Accounting Principle In April 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The updated standard requires retrospective adoption and is effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. During the third quarter of 2015, the Company elected early adoption of this accounting standard. The balance sheet as of December 31, 2014 has been adjusted to reflect the retrospective application of the new method of presentation. Deferred debt issuance costs totaling $343,000 that were included in the Company’s assets as of December 31, 2014 were reclassified as a discount on borrowings. The Company has reflected these costs as a reduction of the debt on the balance sheet as of December 31, 2015 and will continue to do so in future periods. The adoption of this accounting standard had no impact on the Company’s statements of operations, stockholders’ equity (deficit) or cash flows. Recent Accounting Pronouncements In May 2014, the FASB, jointly with the International Accounting Standards Board, issued a comprehensive new standard on recognition from contracts with customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On July 9, 2015, FASB voted to delay the effective date of the new standard by one year. As such the standard will become effective for the Company beginning in the first quarter of 2018. Early application would be permitted in 2017. Entities would have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. The Company is currently evaluating the impact of its adoption and transition approach of this standard on its financial statements. In August 2014, the FASB issued ASU No. 2014-15—Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern. ASU No. 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the Company’s annual reporting period ending December 31, 2016 and all annual and interim reporting periods thereafter, with early adoption permitted. The Company has not elected to early adopt this standard. When adopted, ASU 2014-15 will require Management’s evaluation to be based on relevant conditions and events that are known or reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Under AS 2014-15 s ubstantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The Company’s liquidity matters are discussed in the Note 1 to the financial statements. In April 2015, the FASB issued an accounting standard which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. It is effective for annual periods beginning after December 15, 2015. Early adoption is permitted. The amendment may be adopted either prospectivel |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 3. Fair Value Measurements The Company measures certain financial assets and liabilities at fair value on a recurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or a liability. A three-tier fair value hierarchy is established as a basis for considering such assumptions and for inputs used in the valuation methodologies in measuring fair value: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; 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 assets or liabilities. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. As of December 31, 2015 and 2014, cash equivalents and restricted cash were all categorized as Level 1 and consisted of money market funds. In connection with the convertible notes issuances in 2013 and 2014 (Note 8), the Company issued warrants to purchase shares of its common stock. As the price per share of the common stock warrants was not fixed until the issuance of the Series E Convertible Preferred Stock in September 2014, they were classified as a derivative liability and were subject to remeasurement at each balance sheet date until September 2014. The convertible notes also contained redemption features which were determined to be a compound embedded derivative which, prior to their extinguishment in September 2015, required fair value accounting. The common stock warrant liability and embedded derivatives in the convertible notes were categorized as Level 3. When a determination is made to classify a financial instrument within Level 3, the determination is based upon the significance of the unobservable inputs to the overall fair value measurement. However, Level 3 financial instruments typically include, in addition to the unobservable inputs, observable inputs (that is, components that are actively quoted and can be validated to external sources). Any change in fair value is recognized as a component of other income (expense), net, on the statements of operations and comprehensive loss. There were no transfers between fair value hierarchy levels during the years ended December 31, 2015, 2014 and 2013. Common Stock Warrant Liability As the price per share of the common stock warrants was not fixed until the issuance of the Series E Convertible Preferred Stock in September 2014, they were classified as a derivative liability and were subject to remeasurement at each balance sheet date. Contemporaneous with the Series E Convertible Preferred Stock issuance, the Company determined that these common stock warrants met the requirements for equity classification and the current fair value of the common stock warrant liability was reclassified to additional paid-in capital. Subsequent to September 2014, there were no changes in fair value. The following table sets forth a summary of the changes in the estimated fair value of the Company’s common stock warrant liability, which represents a financial instrument classified as Level 3. Accordingly, the expense in the table below includes changes in fair value due in part to observable factors that are part of the Level 3 methodology (in thousands): Year Ended December 31, 2015 2014 2013 Fair value - beginning of year $ — $ ) $ — Issuance of warrants — — ) Change in fair value recorded in other income (expense), net — ) ) Reclass of warrant liability to additional paid-in capital — — Fair value - end of year $ — $ — $ ) The fair value of the common stock warrants liability was determined by using an option pricing model to allocate the total enterprise value to the various securities within the Company’s capital structure. The model’s inputs reflect assumptions that market participants would use in pricing the instrument in a current period transaction. The following table summarizes these various assumptions as of September 2, 2014, the date the price per share of the common stock warrants was fixed, and as of December 31, 2013: September 2, 2014 December 31, 2013 Time to liquidity (years) Expected volatility % % Discounted cash flow rate % % Risk-free interest rate % % Marketability discount rate % % The time to liquidity input was based on the Company’s estimate of when potential liquidity could be provided to stockholders. The volatility factor was based on the average historic price volatility for publicly-traded industry peers. The discounted cash flow rate takes into consideration a company specific risk premium, market risk premium and an assumed risk free rate of return. The risk-free interest rate was based on the yields of U.S. Treasury securities with maturities similar to the time to liquidity. The marketability discount is used to reflect that private company securities are generally less liquid than the securities of a public company. These assumptions are inherently subjective and involve significant management judgment. Generally, increases (decreases) in the fair value of the underlying common stock would result in a directionally similar impact to the fair value measurement. Subsequent to September 2014, there were no changes in fair value. Embedded Derivatives in Convertible Notes The following table sets forth a summary of the changes in the estimated fair value of the Company’s compound embedded derivative associated with its convertible notes, which represent a financial instrument classified as Level 3. Upon the extinguishment of the convertible notes in September 2015, the fair value of the compound embedded derivatives at the date of extinguishment was expensed to other income (expense), net. The income (expense) in the table below includes changes in fair value due in part to observable factors that are part of the Level 3 methodology (in thousands): Year Ended December 31, 2015 2014 2013 Fair value of asset (liability) - beginning of year $ $ ) $ — Issuance of convertible notes — — ) Change in fair value recorded in other income (expense), net Reversal of fair value recorded in other income (expense), net ) — — Fair value of asset (liability) - end of year $ — $ $ ) Through December 31, 2014, the C ompany determined the value of the compound derivative utilizing a Monte Carlo Simulation model. The inputs used to determine the estimated fair value of the derivative instrument include the probability of an underlying event triggering the embedded derivative occurring and its timing. The fair value measurement is based upon significant inputs not observable in the market. The inputs included the probability that the Company would need to raise additional equity in 2014, as well as various financing and exit events in 2015. These assumptions are inherently subjective and involve significant management judgment. The following table summarizes these various assumptions as of December 31, 2014 and 2013: Year Ended December 31, 2014 2013 Equity financing in 2014 % % Equity financing in 2015 % % Liquidation % % Initial public offering % % Change of control % % Subsequent to the Company’s IPO and through the extinguishment of the convertible notes on September 22, 2015, the value of the compound derivative was determined utilizing a Black-Derman-Toy model. The inputs used to determine the estimated fair value of the derivative instrument include the term structure of yields which are observed in the market, the credit spread, which was estimated by the Company, and the volatility, which was estimated using an analysis of comparable bonds in the market . The fair value measurement is based upon significant inputs not observable in the market. These assumptions are inherently subjective and involve significant management judgment. The following table summarizes these various assumptions as of September 22, 2015, the date of extinguishment: September 22, 2015 Time to first call option (years) — Credit spread % Expected volatility % The compound embedded derivative asset is included in other long-term assets as of December 31, 2014, on the balance sheet. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2015 | |
Inventories | |
Inventories | 4. Inventories Inventories consisted of the following (in thousands): December 31, 2015 2014 Raw materials $ $ Work-in-process Finished products Total inventories $ $ |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment, Net | |
Property and Equipment, Net | 5. Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): December 31, 2015 2014 Computer software $ $ Computer equipment Machinery and equipment Furniture and fixtures Leasehold improvements Equipment held by customers Less: Accumulated depreciation and amortization ) ) Add: Construction-in-progress $ $ Depreciation expense for the years ended December 31, 2015, 2014 and 2013, was $1,300,000, $1,451,000 and $1,501,000, respectively. Amortization of capital leased assets included in depreciation for the years ended December 31, 2015, 2014 and 2013, was $17,000, $17,000 and $16,000, respectively. Property and equipment includes certain equipment that is leased to customers and located at customer premises. The Company retains the ownership of the leased equipment and has the right to remove the equipment if it is not being utilized according to expectations. Depreciation expense relating to the leased equipment held by customers of $260,000, $378,000 and $425,000, was recorded in cost of revenues during the years ended December 31, 2015, 2014 and 2013, respectively. The net book value of this equipment was $1,236,000 and $760,000 at December 31, 2015 and 2014, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2015 2014 Accrued interest payable $ $ Accrued professional services Accrued travel expenses Accrued sales, use and other taxes Accrued warranty Sales return allowance Accrued clinical trial costs Other accrued liabilities $ $ |
Borrowings
Borrowings | 12 Months Ended |
Dec. 31, 2015 | |
Credit Agreement | |
Borrowings | |
Borrowings | 7. Borrowings CRG On September 22, 2015, the Company entered into a Term Loan Agreement (the “Loan Agreement”) with CRG under which, subject to certain conditions, the Company may borrow up to $50,000,000 in principal amount from CRG on or before December 31, 2016. The Company borrowed $30,000,000 on September 22, 2015. Upon FDA approval of the 510(k) for Pantheris the Company became eligible to borrow an additional $10,000,000 in principal amount, on or prior to June 30, 2016. The Company may borrow an additional $10,000,000 in principal amount, on or prior to March 29, 2017, upon achievement of certain revenue milestones, among other conditions. Under the Loan Agreement, the first sixteen quarterly payments are interest only payments, and the last eight quarterly payments will be equal installments in which interest and principal amounts are paid. Interest is calculated at a fixed rate of 12.5% per annum. The Company makes quarterly payments of interest only in arrears commencing on September 30, 2015. During the interest only period, the Company may elect to make the 12.5% interest payment by making a cash payment for 8.5% per annum of interest and making a payment-in-kind (“PIK”) for the remaining amount, for which the 4.0% per annum of interest would be added to the outstanding principal amount of the loan. To date the Company have elected the PIK option to the extent available and have made a cash payment for the remaining amount. Principal is repayable in eight equal quarterly installments during the final two years of the term. All unpaid principal, and accrued and unpaid interest, is due and payable in full on September 30, 2021. The Company may voluntarily prepay the loan in full, with a prepayment premium beginning at 5.0% and declining by 1.0% annually thereafter, with no premium being payable if prepayment occurs after the fifth year of the loan. Each tranche of borrowing requires the payment, on the borrowing date, of a financing fee equal to 1.5% of the borrowed loan principal, which is recorded as a discount to the debt. In addition, a facility fee equal to 7.0% of the amount borrowed plus any PIK is payable at the end of the term or when the loan is repaid in full. A long-term liability is being accreted using the effective interest method for the facility fee over the term of the Loan Agreement with a corresponding discount to the debt. The term loan is collateralized by a security interest in substantially all of the Company’s assets. The Loan Agreement requires that the Company adheres to certain affirmative and negative covenants, including financial reporting requirements, certain minimum financial covenants for pre-specified liquidity and revenue requirements and a prohibition against the incurrence of indebtedness, or creation of additional liens, other than as specifically permitted by the terms of the Loan Agreement. In particular, the covenants of the Loan Agreement include a covenant that the Company maintains a minimum of $5,000,000 of cash and certain cash equivalents, and the Company must achieve minimum revenue of $7,000,000 in 2015, with the target minimum revenue increasing in each year thereafter until reaching $70,000,000 in 2020 and in each year thereafter, as applicable. If the Company fails to meet the applicable minimum revenue target in any calendar year, the Loan Agreement provides the Company a cure right if it prepays a portion of the outstanding principal equal to 2.0 times the revenue shortfall. In addition, the Loan Agreement prohibits the payment of cash dividends on the Company’s capital stock and also places restrictions on mergers, sales of assets, investments, incurrence of liens, incurrence of indebtedness and transactions with affiliates. CRG may accelerate the payment terms of the Loan Agreement upon the occurrence of certain events of default set forth therein, which include the failure of the Company to make timely payments of amounts due under the Loan Agreement, the failure of the Company to adhere to the covenants set forth in the Loan Agreement, the insolvency of the Company or upon the occurrence of a material adverse change. As of December 31, 2015, the Company was in compliance with all applicable covenants. As of December 31, 2015, principal and PIK payments under the Loan Agreement follows (in thousands): Period Ending December 31, Principal and PIK Loan Repayments 2016 $ — 2017 — 2018 — 2019 2020 and thereafter Add: Accretion of closing fees Add: PIK Less: Amount representing debt financing costs ) Borrowings, net of current portion $ Contemporaneous with the execution of the Loan Agreement, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with CRG allowing it to purchase up to $5,000,000 of the Company’s common stock. CRG purchased 348,262 shares of common stock on September 22, 2015 at a price of $14.357 per share, which is the 10-day average of closing prices of the Company’s common stock ending on September 21, 2015. The closing price on September 22, 2015 was $13.97 yielding a $0.387 per share premium. Both the premium and the issuance costs were allocated to the borrowings under Loan Agreement and the common stock purchase under the Security Purchase Agreement based on the relative fair values of each security. The portion of the premium allocated to the borrowings is being amortized over the term of the Loan Agreement. Pursuant to the Securities Purchase Agreement, the Company must file a registration statement covering the resale of the shares sold to CRG (see Note 17) and must comply with certain affirmative covenants during the time that such registration statement remains in effect. In connection with the Loan Agreement, the Company recorded a debt discount of $876,000. The debt discount comprised financing fees of $450,000, paid directly to CRG, and an allocation of the other costs directly attributable to the Loan Agreement and Security Purchase Agreement with CRG of $541,000 net of the common stock premium of $115,000 based on the relative fair values of each security. The debt discount is being amortized as non-cash interest expense using the effective interest method over the term of the Loan Agreement. As of December 31, 2015, the balance of the debt discount was $834,000. PDL BioPharma On April 18, 2013, the Company entered into a Credit Agreement (“Agreement”) with PDL BioPharma, Inc. (“PDL”) whereby PDL agreed to loan up to $40,000,000. Contemporaneous with the execution of the Agreement the Company borrowed an initial $20,000,000 (“Term Note”). Under the terms of the Agreement, if the Company achieved certain net revenue milestones prior to June 30, 2014, the Company would be eligible to borrow an additional amount between $10,000,000 and $20,000,000 (net of fees) at the Company’s election. The Company did not achieve the net revenue milestones and accordingly, there were no additional available funds to borrow under the Agreement. The Term Note was scheduled to mature April 18, 2018, had a stated interest rate of 12.0% per annum and could be prepaid by the Company at any time. The Company paid interest-only through the first ten quarters and, thereafter, repayment of principal in equal installments including accrued and unpaid interest, payable each quarter. As provided under the terms of the Agreement, for the first eight quarterly interest payments, or through 2015, on the Term Note the Company elected to convert an amount of interest, up to 1.5% per annum, into additional loans, referred to as PIK loans. The PIK loans accrued interest and were added to the aggregate principal balance of the Term Note. In September 2015, in connection with the consummation of the Loan Agreement with CRG, the Company repaid all amounts outstanding under the Agreement. The payoff amount of $21,363,000 included accrued interest through the repayment date of $563,000 and $200,000 as an end-of-term final payment fee recorded in other income (expense), net on the statement of loss and comprehensive loss. For the years ended December 31, 2015, 2014 and 2013, the Company incurred interest expense of $2,785,000, $3,380,000 and $2,492,000, respectively. In addition to the interest and principal payments, the Company also paid a royalty, referred to as Assigned Interests, equal to 1.8% of the Company’s quarterly net revenues. Upon the prepayment of the Term Note, the Company’s obligations relating to Assigned Interests continue, and are payable through the maturity date at a reduced rate of 0.9% of the quarterly net revenues, subject to certain quarterly minimum mandatory amounts, which are payable monthly. The ongoing obligation was determined to be an embedded element of the Agreement and cannot be bifurcated from the Term Note for accounting purposes. Accordingly, the Company continued to account for the Assigned Interests obligation relating to future royalties as a debt instrument by applying the retrospective approach. Under the retrospective method, the Company computes a new effective interest rate based on the original carrying amount, actual cash flows to date, and remaining estimated cash flows over the maturity date. The new effective interest rate, 20.4% as of December 31, 2015, was used to adjust the carrying amount to the present value of the revised estimated cash flows, discounted at the new effective interest rate. At the time of the repayment the resulting increase in the carrying value of the Assigned Interests, of $942,000, was recognized as a component of other income (expense), net, on the statements of operations and comprehensive loss. The Company has an aggregate accrual for its Assigned Interests obligations of $2,303,000, representing the net present value of the future minimum royalty obligation as of December 31, 2015. The Assigned Interest liability was included within accrued expenses and other current liabilities and within other long-term liabilities as of December 31, 2015, on the balance sheet. Prior to the repayment of the Term Note, the Assigned Interests liability was included within borrowings and borrowings, net of current portion as of December 31, 2014, on the balance sheet. Additionally, until there are no further obligations to periodically pay PDL a percentage of its net revenues, the Company must comply with certain affirmative covenants and negative covenants limiting its ability to, among other things, undergo a change in control or dispose of assets, in each case subject to certain exceptions. The Company was in compliance with the covenants under the Agreement as of December 31, 2015. |
Convertible Notes
Convertible Notes | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Notes | |
Convertible Notes | |
Convertible Notes | 8. Convertible Notes On October 29, 2013, the Company entered into a Note and Warrant Purchase Agreement (the “Convertible Note Agreement”), as amended in May 2014, with certain existing convertible preferred stockholders, third-parties and employees for the issuance of convertible notes for up to an aggregate principal amount of $25,000,000. Under the terms of the Convertible Note Agreement, the Company issued convertible notes in October and November 2013 for total proceeds of $13,472,000, and in May and July 2014 for additional total proceeds of $4,720,000. The Company was required to pay interest on these convertible notes at a rate of 30-day LIBOR, plus 6% per annum subject to a minimum internal rate of return of 20%. The notes were due to mature and the accrued interest thereon would have become payable upon the earlier of: (i) October 29, 2018, (ii) an event of default, or (iii) a change of control event. The principal and accrued interest on the notes were convertible, at the option of the holder, upon a future issuance of the Company’s convertible preferred stock or common stock (the “Equity Financing”) into that same stock at a conversion price equal to 85% of the price paid by other investors in the financing event. For holders who elected not to convert their notes upon the closing of the Company’s Series E Preferred Stock financing or upon its IPO, the Company may repay the holder, at its sole election, a payment equal to the greater of (i) 125% of the outstanding principal and accrued and unpaid interest, or (ii) the amount providing the investor with a 20% minimum internal rate of return, at any time prior to their maturity date. In conjunction with the issuance of the convertible notes, the Company issued warrants to purchase up to the number of shares of common stock equal to 15% of the principal amount of the convertible notes divided by an exercise price per share equal to the lesser of $39.15 per share, or the price per share paid by the investors in the first bona fide preferred stock financing subsequent to the date of the convertible notes. Upon the Series E Convertible Preferred Stock issuance in September 2014, the exercise price per share was fixed at $12.60 per share and the Company issued warrants to purchase a total of 216,547 shares of common stock. The warrants, which were immediately exercisable, expired upon the closing of the Company’s IPO. The estimated fair value of the warrants upon issuance, of $1,000, was based on an option pricing model. The Company recorded the fair value of the warrants at issuance as a debt discount and as a warrant liability. The debt discount was accreted using the effective interest method as additional interest expense over the term of the convertible notes. Immediately prior to the closing of the Company’s IPO, 149,288 of the warrants to purchase common stock were net exercised, 24,403 of the warrants to purchase common stock were exercised and the remaining balance of 42,856 warrants to purchase common stock expired. The convertible notes have redemption features that were determined to be compound embedded derivatives requiring bifurcation and separate accounting. The fair value of the compound embedded derivative upon issuance was determined to be a liability of $179,000. The fair value of these derivative instruments was recognized as an additional discount and as a derivative liability on the balance sheets upon issuance of the convertible notes. The compound embedded derivative associated with the convertible notes required periodic re-measurements to fair value while the instruments are still outstanding. In September and November 2014, in connection with the issuance of the Series E Convertible Preferred Stock, $11,582,000 of the outstanding convertible notes and accrued interest thereon was converted into shares of Series E Convertible Preferred Stock (Note 11). Upon the conversion of the convertible notes, the Company recorded a net loss from the extinguishment of the debt in the amount of $1,234,000 which is reflected in other income (expense), net in the statement of operations and comprehensive loss. In September 2015, in connection with the consummation of the Loan Agreement, the Company repaid all amounts outstanding under the convertible notes. The carrying value of the convertible notes and accrued interest was $9,867,000 prior to payoff. The Company recorded a loss on extinguishment of the convertible notes of $86,000 as a component of other income (expense), net, on the statements of operations and comprehensive loss. The Company’s interest expense associated with the convertible notes amounted to $1,230,000, $2,633,000 and $433,000 during the years ended December 31, 2015, 2014 and 2013, respectively, based on the minimum internal rate of return of 20%. |
Capital Leases
Capital Leases | 12 Months Ended |
Dec. 31, 2015 | |
Capital Leases | |
Capital Leases | 9. Capital Leases Capital lease obligations consist of leased office equipment. As of December 31, 2015 and 2014, the aggregate amount of capital leases recorded within property and equipment, net, on the accompanying balance sheet is $39,000 and $12,000, respectively. The current portion of the capital lease obligations is included in accrued liabilities and the balance included within other long-term liabilities represents the long-term portion. The future minimum lease payments as of December 31, 2015, are as follows (in thousands): Future Minimum Year ending December 31, Lease Payments 2016 2017 2018 Total minimum payments Less: Amount representing future interest Present value of minimum lease payments $ |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Commitments and Contingencies | 10. Commitments and Contingencies Lease Commitments The Company’s operating lease obligations primarily consist of leased office, laboratory, and manufacturing space under a non-cancelable operating lease that expires in November 2016. The lease agreement includes two renewal provisions allowing the Company to extend this lease for additional periods of three years each. In addition to the minimum future lease commitments presented below, the lease requires the Company to pay property taxes, insurance, maintenance, and repair costs. The lease includes a rent holiday concession and escalation clauses for increased rent over the lease term. Rent expense is recognized using the straight-line method over the term of the lease. The Company records deferred rent calculated as the difference between rent expense and the cash rental payments. In connection with the facility lease, the landlord also provided incentives of $369,000 to the Company in the form of leasehold improvements. These amounts have been reflected as deferred rent and are being amortized as a reduction to rent expense over the term of the Company’s operating lease. Rent expense was $938,000, $922,000 and $922,000 for the years ended December 31, 2015, 2014 and 2013, respectively. The future minimum lease payments as of December 31, 2015, are as follows (in thousands): Future Minimum Year ending December 31, Lease Payments 2016 $ Total minimum lease payments $ Purchase Obligations Purchase obligations consist of agreements to purchase goods and services entered into in the ordinary course of business. The Company had noncancellable commitments to suppliers for purchases totaling $4,347,000 and $1,334,000 as of December 31, 2015 and 2014, respectively. The Company expects its outstanding purchase obligations to be settled within one year. Indemnification In the normal course of business, the Company enters into contracts and agreements that contain a variety of representations and warranties and may provide for indemnification of the counterparty. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future, but have not yet been made. To date, the Company has not been subject to any claims or been required to defend any action related to its indemnification obligations. In accordance with the Company’s amended and restated certificate of incorporation and its amended and restated bylaws, the Company has indemnification obligations to its officers and directors, subject to some limits, with respect to their service in such capacities. The Company has also entered into indemnification agreements with its directors and certain of its officers. To date, the Company has not been subject to any claims, and it maintains director and officer insurance that may enable it to recover a portion of any amounts paid for future potential claims. The Company’s exposure under these agreements is unknown because it involves claims that may be made against it in the future, but have not yet been made. The Company believes that the fair value of these indemnification obligations is minimal, and accordingly, it has not recognized any liabilities relating to these obligations for any period presented. Legal Proceedings The Company was not party to any legal proceedings at December 31, 2015 and 2014. The Company assesses, in conjunction with its legal counsel, the need to record a liability for litigation and contingencies. Reserve estimates are recorded when and if it is determined that a loss-related matter is both probable and reasonably estimable. On February 15, 2014, the Company entered into an engagement letter with a financial advisor which provided for such firm to serve as its placement agent and for the Company to make certain payments to them in connection with its Series E Convertible Preferred Stock financing. After the entry into such engagement letter, the financial advisor did not provide the level of service the Company was expecting and was not responsible for introducing the Company to any of the Series E Convertible Preferred Stock investors. In December 2014, the Company and its former financial advisor agreed to amend and to terminate their engagement letter, effective immediately. Pursuant to the terms of the amended engagement letter, the Company agreed to pay the former financial advisor a transaction fee of $650,000, to be paid in four equal quarterly installments starting on December 31, 2014, and ending on September 30, 2015 and $35,000 for reimbursement of the former financial advisor’s out-of-pocket expenses, which were due upon execution of the amendment. The transaction fee and out-of-pocket expenses were reflected as additional Series E Convertible Preferred Stock issuance costs during the year ended December 31, 2014. |
Convertible Preferred Stock
Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Preferred Stock | |
Convertible Preferred Stock | 11. Convertible Preferred Stock At December 31, 2014, convertible preferred stock authorized and outstanding consisted of the following (in thousands except share amounts): Shares Preferential Shares Issued and Carrying Liquidation Series Authorized Outstanding Value Value Series A $ $ Series A-1 Series B Series C Series D Series E $ $ On January 9, 2015, the Company issued a total of 490,472 shares of Series E Convertible Preferred Stock at $12.60 per share for net cash proceeds of $6,176,000. Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into an aggregate of 6,967,925 shares of common stock. As of December 31, 2015, the Company does not have any convertible preferred stock issued or outstanding. 2012 Preferred Stock Plan The 2012 Preferred Stock Plan (the “2012 Plan”) was adopted on July 19, 2012. The 2012 Plan was established to allow employees the opportunity to participate in the Series D Convertible Preferred Stock issuance. Under the 2012 Plan, 126,435 shares were authorized for issuance. In September 2012, the Company granted 19,952 fully vested options to purchase shares of Series D Convertible Preferred Stock at $52.20 per share. In September 2012, 10,267 of the options were exercised, the remaining options to purchase 9,685 shares expired unexercised at that time and were returned to the 2012 Plan. As of December 31, 2013, there were 116,168 shares available for grant and no options were outstanding under the 2012 Plan. On November 3, 2014, the Company’s Board of Directors approved the termination of the 2012 Plan effective immediately. 2014 Preferred Stock Plan In August 2014, the Company’s Board of Directors adopted the 2014 Preferred Stock Plan (the “2014 Plan”). The 2014 Plan was established to allow employees the opportunity to participate in the Series E Convertible Preferred Stock issuance. Under the 2014 Plan, 88,888 shares were authorized for issuance. In August through December 2014, the Company granted 59,230 fully vested options to purchase shares of Series E Convertible Preferred Stock at $12.60 per share. In September through December 2014, 53,744 of the options were exercised and the remaining options expired. As of December 31, 2014, there were 35,144 shares available for grant and no options were outstanding under the 2014 Plan. On January 14, 2015, the Company’s Board of Directors approved the termination of the 2014 Preferred Stock Plan effective immediately prior to consummation of the Company’s IPO. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity (Deficit) | |
Stockholders' Equity (Deficit) | 12. Stockholders’ Equity (Deficit) Preferred Stock At December 31, 2015, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 5,000,000 shares of preferred stock with $0.001 par value per share, of which no shares were issued and outstanding. Common Stock At December 31, 2015, the Company’s certificate of incorporation, as amended and restated, authorizes the Company to issue up to 100,000,000 shares of common stock with $0.001 par value per share, of which 12,643,538 shares were issued and outstanding. Restricted Stock In May 2012, the Company entered into two Restricted Stock Purchase Agreements with two individuals in return for certain intellectual property (“IP”) and ongoing consulting services. 1,666 shares of common stock were issued under each Restricted Stock Purchase Agreement for a total of 3,332 shares at a fair market value of $14.85 per share for a total purchase price of $49,500. The shares are subject to repurchase at cost, or $14.85 per share, with 20% being released from the repurchase option at the date of assignment of the IP and 1/48th of the remaining 80% being released monthly thereafter. Stock compensation expense of $49,500, representing the intrinsic value of the shares was recorded to consulting expense in 2012. Since it was not possible to value the IP, this non-cash compensation expense was calculated at the fair market value of the shares of $14.85 per share. As of December 31, 2015 and 2014, a total of none and 583 shares, respectively, were subject to repurchase, at cost, under the Restricted Stock Purchase Agreements. Common Stock Warrants In connection with the issuance of the Company’s Series E Convertible Preferred Stock in September 2014 through January 2015, the Company issued, to each investor who purchased shares of Series E Convertible Preferred Stock, warrants to purchase up to the number of shares of common stock equal to 50% of the number of shares of the Company’s Series E Convertible Preferred Stock purchased. The warrants are immediately exercisable, at an exercise price per share of $12.60, and expire upon the earlier of September 2, 2019 or upon the consummation of a change of control of the Company. The Company determined that these common stock warrants meet the requirements for equity classification. In connection with the issuance of its Series E Convertible Preferred Stock in September through December 2014, the Company issued warrants to purchase an aggregate of 1,335,779 shares of common stock. The common stock warrants were recorded at their allocated fair value of $175,000 within stockholders’ equity (deficit). In connection with the issuance of the Company’s Series E Convertible Preferred Stock in January 2015, the Company issued warrants to purchase an aggregate of 245,235 shares of common stock. The common stock warrants were recorded at their allocated fair value of $804,000 within stockholders’ equity (deficit). On January 14, 2015, the Company amended its Series E Convertible Preferred Stock Purchase Agreement to provide for the issuance of common stock warrants to each investor who purchased shares of Series E Convertible Preferred Stock equal to 70% of the number of shares of the Company’s Series E Convertible Preferred Stock purchased by such investor. As with the common stock warrants previously issued, any new common stock warrants were immediately exercisable, at an exercise price of $12.60 per share, and expire upon the earlier of September 2, 2019 or upon consummation of a change in control of the Company. As a result of this amendment to the Series E Convertible Preferred Stock Purchase Agreement, the Company issued additional warrants to purchase 632,381 shares of common stock to investors who previously acquired shares of Series E Convertible Preferred Stock from September 2014 through January 2015. As of December 31, 2015, warrants to purchase an aggregate of 2,193,507 shares of common stock were outstanding. The Company determined that the amendment to the Series E Convertible Preferred Stock Purchase Agreement should be accounted for as a modification. Accordingly, the incremental fair value from the modification, the additional warrants to purchase 632,381 shares of common stock warrants, of $2,384,000, was recorded as an increase to stockholders’ equity (deficit) and as an adjustment to net loss attributable to common stockholders in the Company’s statement of operations and comprehensive loss for the year ended December 31, 2015. This amount represents a return to the preferred stockholders and is treated in a manner similar to the treatment of dividends paid to holders of preferred stock in the computation of earnings per share. As a result, the “deemed dividend” is subtracted from net loss available to common stockholders in reconciling net loss to net loss available for common stockholders. Stock Plans In January 2015, the Company’s Board of Directors adopted and the Company’s stockholders approved the 2015 Equity Incentive Plan (“2015 Plan”). The 2015 Plan replaced the 2009 Stock Plan (the “2009 Plan”) which was terminated immediately prior to consummation of the Company’s IPO, collectively the “Plans” and provides for the grant of incentive stock options (“ISOs”) and nonstatutory stock options (“NSOs”) to purchase common shares. The 2015 Plan provides for the grant of ISOs to employees and for the grant of NSOs, restricted stock, RSUs, stock appreciation rights, performance units and performance shares to employees, directors and consultants. A total of 1,320,000 shares of common stock were reserved for issuance pursuant to the 2015 Plan. In addition, the shares reserved for issuance under the 2015 Plan includes shares reserved but not issued under the 2009 Plan, plus any share awards granted under the 2009 Plan that expire or terminate without having been exercised in full or that are forfeited or repurchased. In addition, the number of shares available for issuance under the 2015 Plan will also include an annual increase on the first day of each fiscal year beginning in fiscal 2016, equal to the lesser of 1,690,000 shares, 5.0% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year or an amount as determined by the Board of Directors. Pursuant to the Plans ISOs and NSOs may be granted with exercise prices at not less than 100% of the fair value of the common stock on the date of grant and the exercise price of ISOs granted to a stockholder, who, at the time of grant, owns stock representing more than 10% of the voting power of all classes of the stock of the Company, shall be not less than 110% of the fair market value per share of common stock on the date of grant. The Company’s Board of Directors determines the vesting schedule of the options. Options granted generally vest over four years, include a one-year cliff period, and expire ten years from the date of grant. Activity under the Plans is set forth below: Options Outstanding Shares Weighted Aggregate Available for Number of Average Intrinsic Value Grant Shares Exercise Price (in thousands) Balance at December 31, 2012 $ $ Options granted ) $ Options exercised — ) $ Options cancelled ) $ Shares repuchased — $ Balance at December 31, 2013 $ $ — Additional shares reserved — Options granted ) $ Options exercised — ) $ Options cancelled ) $ Balance at December 31, 2014 $ $ Additional shares reserved — Options granted ) $ RSUs granted ) — Options exercised — ) $ Options cancelled ) $ Balance at December 31, 2015 $ $ In December 2015, the Board of Directors of the Company approved grants under the 2015 Plan for an aggregate of 92,946 RSUs to certain employees of the Company with a grant date fair value of $19.61 per share. The RSUs vest annually over four years in equal increments. No RSUs vested or were forfeited during the year ended December 31, 2015. Additional information related to the status of options as of December 31, 2015 is summarized as follows: Options Outstanding and Vested as of December 31, 2015 Options Outstanding Options Vested Weighted Weighted Weighted Average Average Average Exercise Options Remaining Exercise Number Exercise Price Outstanding Contractual Life Price Exercisable Price $ $ $ $ $ $ $ $ $ $ $ — $ $ $ — $ $ $ $ $ $ $ $ $ — $ $ $ — $ $ $ $ $ $ $ $ $ $ $ $ Additional information related to the status of options as of December 31, 2014 is summarized as follows: Options Outstanding and Vested as of December 31, 2014 Options Outstanding Options Vested Weighted Weighted Weighted Average Average Average Exercise Options Remaining Exercise Number Exercise Price Outstanding Contractual Life Price Exercisable Price $ $ $ $ $ — $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ The weighted-average grant date fair value of stock options granted during the years ended December 31, 2015, 2014 and 2013 was $8.24, $6.60 and $7.20 per share, respectively. As of December 31, 2015, the weighted average remaining contractual life of options outstanding and vested was 8.24 years. As of December 31, 2015, the aggregate intrinsic value of options outstanding and vested was $13,404,000. The aggregate intrinsic value of options exercised was $236,000, none and $153,000 during the years ended December 31, 2015, 2014 and 2013, respectively. The aggregate intrinsic value was calculated as the difference between the exercise prices of the underlying options and the estimated fair value of the common stock on the date of exercise. Because of the Company’s net operating losses, the Company did not realize any tax benefits from share-based payment arrangements for the years ended December 31, 2015, 2014 and 2013. 2015 Employee Stock Purchase Plan In January 2015, the Company’s Board of Directors adopted and the Company’s stockholders approved the 2015 Employee Stock Purchase Plan (“ESPP”) under which eligible employees are permitted to purchase common stock at a discount through payroll deductions of up to 20% of their eligible compensation, subject to certain restrictions, at semi-annual intervals. 500,000 shares of common stock were reserved for issuance and will be increased on the first day of each fiscal year, commencing in 2016, by an amount equal to the lesser of (i) 493,000 shares (ii) 1.5% of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year; or (iii) an amount as determined by the Board of Directors. The price of the common stock purchased under the ESPP is the lower of 85% of the fair market value of the common stock at the beginning of an offering period or at the end of a purchase period. The ESPP is intended to qualify as an “employee stock purchase plan” within the meaning of Section 423 of the Internal Revenue Code of 1986, as amended. The first offering under the ESPP began in February 2015. As of December 31, 2015, the Company issued approximately 32,000 shares under the ESPP and approximately 468,000 shares of common stock remained reserved for issuance under the ESPP. The Company incurred $217,000 in stock-based compensation expense related to the ESPP for the year ended December 31, 2015, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Stock-Based Compensation | 13. Stock-Based Compensation Stock-based compensation for the Company includes amortization related to all stock options, restricted stock units and shares issued under the employee stock purchase plan, based on the grant-date estimated fair value. The Company estimates the fair value of stock options and shares issued under the ESPP on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes model determines the fair value of stock-based payment awards based on the fair market value of the Company’s common stock on the date of grant and is affected by assumptions regarding a number of complex and subjective variables. These variables include, but are not limited to, the fair value of the Company’s common stock, and the volatility over the expected term of the awards. The Company has opted to use the “simplified method” for estimating the expected term of options, whereby the expected term equals the arithmetic average of the vesting term and the original contractual term of the option. Prior to the Company’s IPO in January 2015, due to the Company’s limited operating history and a lack of company specific historical and implied volatility data, the Company based its estimate of expected volatility on the historical volatility of a group of similar companies that are publicly traded. When selecting these public companies on which it has based its expected stock price volatility, the Company selected companies with comparable characteristics to it, including enterprise value, stage of development, risk profile, and position within the industry as well as selecting companies with historical share price information sufficient to meet the expected life of the stock-based awards. The historical volatility data was computed using the daily closing prices for the selected companies’ shares during the equivalent period of the calculated expected term of the share-based payments. Following the closing of the Company’s IPO it supplements its own available company specific historical volatility with the volatility of the previously selected peer group of publicly traded companies . The Company will continue to analyze the historical stock price volatility and expected term assumptions as more historical data for the Company’s common stock becomes available. The risk-free rate assumption is based on the U.S. Treasury instruments with maturities similar to the expected term of the Company’s stock options. The expected dividend assumption is based on the Company’s history of not paying dividends and its expectation that it will not declare dividends for the foreseeable future. As noncash stock-based compensation expense recognized in the financial statements is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. The Company estimates a forfeiture rate for its stock options and RSUs based on an analysis of its actual forfeitures based on actual forfeiture experience and other factors. Forfeitures are estimated at the time of grant and revised, if necessary, over the service period to the extent that actual forfeitures differ, or are expected to differ, from prior estimates. Forfeitures are estimated based on estimated future employee turnover and historical experience. The fair value for the Company’s employee stock options was estimated at the date of grant using the Black-Scholes valuation model with the following average assumptions: Year Ended December 31, 2015 2014 2013 Expected term (years) Expected volatility % % % Risk-free interest rate % % % Dividend rate — — — As of December 31, 2015 and 2014, the total unamortized compensation expense related to stock options granted to employees and directors was $16,871,000 and $18,938,000, which is expected to be amortized over the next 3.15 and 3.92 years, respectively. The fair value of the shares to be issued under the Company’s ESPP was estimated using the Black-Scholes valuation model with the following average assumptions for the year ended December 31, 2015: Year Ended December 31, 2015 Expected term (years) Expected volatility % Risk-free interest rate % Dividend rate — The Company measures the fair value of RSUs using the closing stock price of a share of the Company’s common stock on the grant date and is recognized as expense on a straight-line basis over the vesting period of the award . The total fair value of shares vested pursuant to RSUs in the year ended December 31, 2015 was zero. As of December 31, 2015, total unamortized stock-based compensation expense related to unvested RSUs was $1,806,000, with a weighted-average remaining recognition period of 3.88 years. Total noncash stock-based compensation expense relating to the Company’s stock options, ESPP and RSUs recognized, before taxes, during the years ended December 31, 2015, 2014 and 2013, is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Cost of revenues $ $ $ Research and development expenses Selling, general and administrative expenses $ $ $ |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Income Taxes | 14. Income Taxes For the years ended December 31, 2015, 2014 and 2013, the Company’s provision for income taxes consisted of state income tax expense of none, $14,000 and $11,000, respectively. A reconciliation of the statutory U.S. federal rate to the Company’s effective tax rate is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Tax at federal statutory rate $ ) $ ) $ ) State taxes, net of federal benefit — Permanent differences Change in valuation allowance Research credits ) ) ) Other ) Provision for taxes $ — $ $ Significant components of the Company’s net deferred tax assets as of December 31, 2015 and 2014 consist of the following (in thousands): As of December 31, 2015 2014 Deferred tax assets: Federal, state, and foreign net operating losses $ $ Research and other credits Fixed assets Interest Accruals and other Total deferred tax assets Less: Valuation allowance ) ) Net deferred tax assets $ — $ — The valuation allowance increased by $15,076,000, $12,193,000 and $15,927,000 during the years ended December 31, 2015, 2014 and 2013, respectively. As of December 31, 2015, the Company had federal net operating loss carryforwards of approximately $171,199,000, which begin to expire in 2027, and state net operating loss carryforwards of approximately $161,235,000, which begin to expire in 2015. As of December 31, 2015, the Company had federal research and development credit carryforwards of approximately $2,118,000, which expire in the years 2027 through 2035, and state research and development credit carryforwards of approximately $2,247,000. The state research and development credit can be carried forward indefinitely. Federal and state tax laws impose substantial restrictions on the utilization of the net operating loss, and credit carryforwards in the event of an ownership change as defined in Section 382 of the Internal Revenue Code. Accordingly, the Company’s ability to utilize these carryforwards may be limited as a result of such ownership change. Such a limitation could result in the expiration of carryforwards before they are utilized. The Company had unrecognized tax benefits of approximately $3,902,000 and $1,121,000, as of December 31, 2015 and 2014, of which $2,792,000 and $924,000, respectively, would affect the effective tax rate if recognized, before consideration of the valuation allowance. A reconciliation of the unrecognized tax benefits from January 1, 2013 through December 31, 2015 is as follows (in thousands): As of December 31, 2015 2014 2013 Balance at beginning of year $ $ $ Additions based on tax positions related to current year Additions for tax positions of prior years — Balance at end of year $ $ $ The Company does not expect a significant change to its unrecognized tax benefits over the next twelve months. The unrecognized tax benefits may increase or change during the next twelve months for items that arise in the ordinary course of business. The Company files income tax returns in the U.S. federal jurisdiction and various state jurisdictions. In the normal course of business, the Company is subject to examination by taxing authorities throughout the nation. The Company is not currently under audit by the Internal Revenue Service or other similar state and local authorities. All tax years remain open to examination by major taxing jurisdictions to which the Company is subject. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2015 | |
Related Party Transactions | |
Related Party Transactions | 15. Related-Party Transactions The Company entered into an agreement with JBS Consulting, LLC (“JBS Consulting”) regarding the use of a private aircraft owned by JBS Consulting for company business-related travel by the Company’s directors, officers and employees. Dr. John B. Simpson, the Company’s founder and the Executive Chairman of the Board of Directors, is the president and managing officer of JBS Consulting. Pursuant to the agreement, JBS Consulting will be reimbursed for the cost of first class airfare for all flights in connection with company business-related travel by Dr. John B. Simpson and the cost of coach airfare for all flights in connection with company business-related travel by other directors, officers, and employees. For the years ended December 31, 2015, 2014 and 2013, JBS Consulting provided private plane service to the Company totaling approximately none, none and $568,000, respectively. During the years ended December 31, 2015, 2014 and 2013, the Company purchased marketing services from Recreation, Inc., a brand strategy and design agency headquartered in San Francisco, California for $1,016,000, $984,000 and $107,000, respectively. John D. Simpson, the Company’s Vice President of Business Development, was the Chief Executive Officer of Recreation, Inc. until March 2015 and is the son of Dr. John B. Simpson, the Company’s founder and the Executive Chairman of the Board of Directors. As of December 31, 2015 and 2014, amounts due to Recreation, Inc., included in accounts payable and accrued liabilities, were $76,000 and $298,000, respectively. During the years ended December 31, 2015, 2014 and 2013, Baysinger Search & Associates, Inc., a company whose management includes the wife of the Company’s then-Vice President of Sales, provided recruiting services to the Company totaling approximately none, none and $146,000. From October 2013 through July 2014, the Company entered into convertible notes with certain investors, including existing stockholders, some members of the Board of Directors and their affiliated companies and some members of management for a total aggregate principal amount of $18,192,000 (Note 8) and issued warrants to purchase shares of the Company’s common stock at an exercise price of $12.60 per share. The issuance of $5,122,000 of the total aggregate principal amount of the convertible notes was considered a related-party transaction. In September 2015, the Company repaid all amounts outstanding under the convertible notes. As of December 31, 2015 and 2014, the carrying value of the related-party convertible notes was none and $2,793,000, respectively. For the years ended December 31, 2015, 2014 and 2013, the Company recognized $388,000, $1,021,000 and $140,000, respectively, of interest expense related to the related-party convertible notes within interest expense in the Company’s statements of operations and comprehensive loss. In April 2015, the Company entered into an agreement with Chansu Consulting, LLC (“Chansu”) to provide consulting services related to regulatory affairs. The General Partner of Chansu is the son-in-law of Dr. John B. Simpson, the Company’s founder and the Executive Chairman of the Board of Directors. For the year ended December 31, 2015, Chansu provided regulatory consulting services of $17,000. As of December 31, 2015 there were no amounts due to Chansu included in accounts payable and accrued liabilities. |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2015 | |
401(k) Plan | |
401(k) Plan | 16. 401(k) Plan The Company has a qualified retirement plan under section 401(k) of the Internal Revenue Code (“IRC”) under which participants may contribute up to 90% of their eligible compensation, subject to maximum deferral limits specified by the IRC. The Company may make a discretionary matching contribution to the 401(k) plan, and may make a discretionary employer contribution to each eligible employee each year. Eligible employees vest in the Company’s contributions over a graded four year schedule. To date, the Company has made no contributions to the 401(k) plan. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2015 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events 2015 Equity Incentive Plan In January 2016, the number of shares of common stock authorized for issuance under the 2015 Plan was automatically increased by 632,176 shares, which was ratified by the Company’s Board of Directors. 2015 Employee Stock Purchase Plan In January 2016, the number of shares of common stock authorized for issuance under the 2015 ESPP was automatically increased by 189,653 shares, which was ratified by the Company’s Board of Directors. Entry into Sales Agreement On February 3, 2016, the Company entered into a Sales Agreement with Cowen, as sales agent, pursuant to which it may, at its discretion, issue and sell common stock from time to time with an aggregate value of up to $50,000,000 in an at-the-market offering. All sales of shares will be made pursuant to a shelf registration statement that was filed on February 3, 2016, which has not yet been declared effective by the SEC. Cowen is acting as sole sales agent for any sales made under the Sales Agreement for a 3% commission on gross proceeds. The common stock will be sold at prevailing market prices at the time of the sale, and, as a result, prices may vary. Unless otherwise terminated earlier, the Sales Agreement continues until all shares available under the Sales Agreement have been sold. Pursuant to the Securities Purchase Agreement, the shelf registration statement also covers the resale of the shares sold to CRG. Facility Lease Commitments In March 2016, the Company amended its facility operating lease to extend the lease term for a period of three years from December 1, 2016, until November 30, 2019. Under the terms of the amended facility lease agreement, the Company is obligated to pay approximately $5,738,000 in lease payments through November 2019 over the term of the amended agreement. |
Selected Quarterly Financial In
Selected Quarterly Financial Information (Unaudited) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Information (Unaudited) | |
Selected Quarterly Financial Information (Unaudited) | 18. Selected Quarterly Financial Information (Unaudited) The following table represents certain unaudited quarterly information for the eight quarters ended December 31, 2015. This data has been derived from unaudited financial statements that, in the opinion of the Company’s management, include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of such information when read in conjunction with the Company’s annual audited financial statements and notes thereto appearing elsewhere in this report. These operating results are not necessarily indicative of results for any future period. Net loss per share for all periods presented has been retroactively adjusted to reflect the 1-for-45 reverse stock split effected on January 28, 2015 (in thousands, except per share data): Three Months Ended Three Months Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2015 2015 2015 2015 2014 2014 2014 2014 Revenues $ $ $ $ $ $ $ $ Gross profit Operating expenses Net loss ) ) ) ) ) ) ) ) Net loss per share, basic and diluted $ ) $ ) $ ) $ ) $ ) $ ) $ ) $ ) |
Summary of Significant Accoun25
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation On January 14, 2015, the Company’s Board of Directors approved an amendment to the Company’s amended and restated certificate of incorporation to effect a 1-for-45 reverse stock split of the Company’s common stock and convertible preferred stock. The par value of the common stock and convertible preferred stock was not adjusted as a result of the reverse stock split. All common stock, convertible preferred stock, stock options and warrants, and per share amounts in the financial statements have been retroactively adjusted for all periods presented to give effect to the reverse stock split. The reverse stock split was effected on January 28, 2015. The financial statements have been prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”) and pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts and disclosures reported in the financial statements. Management uses significant judgment when making estimates related to its common stock valuation and related stock-based compensation, the valuation of the common stock warrants, the valuation of compound embedded derivatives, provisions for doubtful accounts receivable and excess and obsolete inventories, clinical trial accruals, and its reserves for sales returns and warranty costs. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Although these estimates are based on the Company’s knowledge of current events and actions it may undertake in the future, actual results may ultimately materially differ from these estimates and assumptions. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company has evaluated the estimated fair value of its financial instruments as of December 31, 2015 and 2014. Financial instruments consist of cash and cash equivalents, accounts receivable and payable, and other current liabilities, borrowings, convertible notes and embedded derivatives. The carrying amounts of cash and cash equivalents, accounts receivable and payable, and other current liabilities approximate their respective fair values because of the short-term nature of those instruments. Based upon the borrowing terms and conditions currently available to the Company, the carrying values of the borrowings approximate their fair value. Fair value accounting is applied to the warrant liabilities and embedded derivatives. No warrant liabilities or embedded derivatives were outstanding as of December 31, 2015. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents. Cash equivalents are considered available-for-sale marketable securities and are recorded at fair value, based on quoted market prices. As of December 31, 2015 and 2014, the Company’s cash equivalents are entirely comprised of investments in money market funds. Any related unrealized gains and losses are recorded in other comprehensive income (loss) and included as a separate component of stockholders’ deficit. There were no unrealized gains and losses as of December 31, 2015 and 2014. Any realized gains and losses and interest and dividends on available-for-sale securities are included in interest income or expense and computed using the specific identification cost method. |
Restricted Cash | Restricted Cash At December 31, 2014, a deposit of $255,000 was restricted from withdrawal. The restricted cash secured obligations of the Company associated with its corporate credit card. The restricted deposit account was included in prepaid expenses and other current assets. During 2015, the Company was no longer required to secure its corporate card obligations; accordingly the $255,000 is included within cash and cash equivalents as of December 31, 2015. The release of the restriction against the Company’s cash was included within investing activities on its statement of cash flows for the year ended December 31, 2015. |
Concentration of Credit Risk, and Other Risks and Uncertainties | Concentration of Credit Risk, and Other Risks and Uncertainties Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents and accounts receivable to the extent of the amounts recorded on the balance sheets. The Company’s policy is to invest in cash and cash equivalents, consisting of money market funds. These financial instruments are held in Company accounts at one financial institution. The counterparties to the agreements relating to the Company’s investments consist of financial institutions of high credit standing. The Company provides for uncollectible amounts when specific credit problems arise. Management’s estimates for uncollectible amounts have been adequate, and management believes that all significant credit risks have been identified at December 31, 2015 and 2014. The Company’s accounts receivable are due from a variety of health care organizations in the United States and select European markets. At December 31, 2015 and 2014, there were one and none, respectively, of the Company’s customers that represented 10% or more of the Company’s accounts receivable. For the years ended December 31, 2015, 2014 and 2013, there were no customers that represented 10% or more of revenues. Disruption of sales orders or a deterioration of financial condition of its customers would have a negative impact on the Company’s financial position and results of operations. The Company manufactures certain of its commercial products in-house, including the production of the Ocelot family of catheters. Certain of the Company’s product components and sub-assemblies continue to be manufactured by sole suppliers. Disruption in component or sub-assembly supply from these manufacturers or from in-house production would have a negative impact on the Company’s financial position and results of operations. The Company is subject to certain risks, including that its devices may not be approved or cleared for marketing by governmental authorities or be successfully marketed. There can be no assurance that the Company’s products will continue to be accepted in the marketplace, nor can there be any assurance that any future devices can be developed or manufactured at an acceptable cost and with appropriate performance characteristics. The Company is also subject to risks common to companies in the medical device industry, including, but not limited to, new technological innovations, dependence upon third-party payors to provide adequate coverage and reimbursement, dependence on key personnel and suppliers, protection of proprietary technology, product liability claims, and compliance with government regulations. Existing or future devices developed by the Company may require approvals or clearances from the FDA or international regulatory agencies. In addition, in order to continue the Company’s operations, compliance with various federal and state laws is required. If the Company were denied or delayed in receiving such approvals or clearances, it may be necessary to adjust operations to align with the Company’s currently approved portfolio. If clearance for the products in the current portfolio were withdrawn by the FDA, this may have a material adverse impact on the Company. |
Accounts Receivable | Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The Company determines the allowance for doubtful accounts based upon an aging of accounts receivable, historical experience, and management judgment. Accounts receivable balances are reviewed individually for collectability. To date, the Company has not experienced significant credit-related losses. |
Inventories | Inventories Inventories are valued at the lower of cost or market. Cost is determined using the first-in, first-out method for all inventories. The Company’s policy is to write down inventory that has expired or become obsolete, inventory that has a cost basis in excess of its expected net realizable value, and inventory in excess of expected requirements. The estimate of excess quantities is subjective and primarily dependent on the estimates of future demand for a particular product. If the estimate of future demand is too high, the Company may have to increase the reserve for excess inventory for that product and record a charge to the cost of revenues. Inventory used in clinical trials is expensed at the time of production and recorded as research and development expense. |
Property and equipment | Property and equipment Property and equipment are recorded at cost. Repairs and maintenance costs are expensed as incurred. Depreciation and amortization are calculated using the straight-line method over the estimated useful lives of the assets of three to five years. Depreciation expense includes the amortization of assets acquired under capital leases and equipment located at customer sites. Equipment held by customers is comprised of the Lightboxes located at customer sites under a lease agreement and are recorded at cost. Upon execution of a lease agreement, the related equipment is reclassified from inventory to the property and equipment account. Depreciation expense for equipment held by customers is recorded as a component of cost of revenues. Leasehold improvements and assets recorded under capital leases are amortized using the straight-line method over the shorter of the lease term or estimated useful economic life of the asset. |
Deferred Offering Costs | Deferred Offering Costs Deferred offering costs, which primarily consist of direct incremental legal and accounting fees relating to an offering of equity securities, were capitalized. As of December 31, 2014, $2,608,000 of deferred offering costs were capitalized in other assets on the balance sheet, of which $1,848,000 had been paid. The Company incurred $3,553,000 in offering costs and in January 2015, these IPO costs were offset against the proceeds obtained from the Company’s IPO. Deferred offering costs of $29,000 were capitalized as of December 31, 2015. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews long-lived assets, including property and equipment, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. If indicators of impairment exist, an impairment loss would be recognized when estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Impairment, if any, is measured as the amount by which the carrying amount of the long-lived asset exceeds its fair value. The Company has not recorded any impairment of long-lived assets since inception through December 31, 2015. |
Convertible Preferred Stock | Convertible Preferred Stock Prior to its IPO the Company recorded its convertible preferred stock at fair value on the dates of issuance, net of issuance costs and classified the convertible preferred stock outside of stockholders’ equity (deficit) on the balance sheets as events triggering the liquidation preferences were not solely within the Company’s control. Upon the closing of the IPO, all shares of convertible preferred stock then outstanding converted into an aggregate of 6,967,925 shares of common stock resulting in the reclassification of $137,626,000 from outside of stockholders’ equity (deficit) to additional paid-in capital. |
Warrant Liability and Embedded Derivative Instruments | Warrant Liability and Embedded Derivative Instruments The Company accounts for its warrants for shares of common stock in accordance with the accounting guidance for derivatives. The accounting guidance provides a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock and, therefore, qualifies for a scope exception. The two-step model requires a contract for a financial instrument to be both (1) indexed to the entity’s own stock and (2) classified in the stockholders’ equity (deficit) section of the balance sheet. If a financial instrument qualifies for a scope exception, it would not be considered a derivative financial instrument. As the price per share of the common stock warrants issued with the convertible notes was not fixed until the issuance of the Series E Convertible Preferred Stock in September 2014, these warrants were initially classified as a derivative liability. As a derivative liability, the warrants were initially recorded at fair value and were subject to remeasurement at each balance sheet date until September 2014. Any change in fair value as a result of a remeasurement was recognized as a component of other income (expense), net in the statements of operations and comprehensive loss. The Company re-evaluated the terms of the common stock warrants issued with the convertible notes after the issuance of the Series E Convertible Preferred Stock in September 2014 and determined that they then met the first criterion of the two-step model. Accordingly, the associated current fair value of the warrant liability was reclassified to additional paid-in capital in the stockholders’ equity (deficit) section of the balance sheet at that time, thus satisfying the second criterion of the two-step model. The convertible notes issued in 2013 and 2014 included features which were determined to be embedded derivatives requiring bifurcation and separate accounting. Prior to their extinguishment in September 2015, the Company recorded a compound derivative asset or liability related to redemption features embedded within its outstanding convertible notes. The embedded derivatives were initially recorded at fair value and are subject to remeasurement as of each balance sheet date. Any change in fair value is recognized as a component of other income (expense), net in the statements of operations and comprehensive loss. In September 2015, the Company repaid the outstanding convertible notes and accrued interest obligations in their entirety. Accordingly, the associated current fair value of the embedded derivative asset as remeasured at the date of extinguishment was expensed as a component of other income (expense), net in the statements of operations and comprehensive loss for the year ended December 31, 2015. |
Revenue Recognition | Revenue Recognition The Company’s revenues are derived from (1) sale of its Lightbox (2) sale of disposables, which consist of catheters and accessories, and (3) sale of customer service contracts. The Company recognizes revenue in accordance with Accounting Standards Codification (“ASC”) 605-10, Revenue Recognition, when persuasive evidence of an arrangement exists, the fee is fixed or determinable, collection of the fee is probable and delivery has occurred. For all sales, the Company uses either a signed agreement or a binding purchase order as evidence of an arrangement. The Company’s revenue recognition policies generally result in revenue recognition at the following points: 1. Lightbox sales: The Company sells its products directly to hospitals and medical centers. Provided all other criteria for revenue recognition have been met, the Company recognizes revenue for Lightbox sales directly to end customers when delivery and acceptance occurs, which is defined as receipt by the Company of an executed form by the customer acknowledging that the training and installation process is complete. 2. Sales of disposables: Disposable revenues consist of sales of the Company’s catheters and accessories and are recognized when the product has shipped, risk of loss and title has passed to the customer and collectability is reasonably assured. 3. Service revenue: Service revenue is recognized ratably over the term of the service period. To date service revenue has been insignificant. The Company offers its customers the ability to purchase or lease its Lightbox. The Company recovers the cost of providing the leased Lightbox through a premium in the amount charged for its disposable products in comparison to a standalone purchase. When a Lightbox is placed under a lease agreement, the Company retains title to the equipment and it remains capitalized on its balance sheet under property and equipment. Depreciation expense on these leased Lightboxes is recorded to cost of revenues on a straight-line basis. The costs to maintain these leased Lightboxes are charged to cost of revenues as incurred. The Company evaluates its lease agreements and accounts for these contracts under the guidance in ASC 840, Leases and ASC 605-25, Revenue Recognition—Multiple Element Arrangements . The guidance requires arrangement consideration to be allocated between a lease deliverable and a non-lease deliverable based upon the relative selling-price of the deliverables, using a specific hierarchy. The hierarchy is as follows: vendor- specific objective evidence of fair value of the respective elements, third-party evidence of selling price, or best estimate of selling price (“BESP”). The Company allocates arrangement consideration using BESP. The Company assessed whether the embedded lease is an operating lease or sales-type lease. Based on the Company’s assessment of the guidance and given that any payments under the lease agreements are dependent upon contingent future sales, it was determined that collectability of the minimum lease payments is not reasonably predictable. Accordingly, the Company concluded the embedded lease did not meet the criteria of a sales-type lease and accounts for it as an operating lease. The Company recognizes revenue allocated to the lease as the contingent disposable product purchases are delivered and are included in revenues within the statement of operations and comprehensive loss. The Company estimates reductions in revenue for potential returns of products by customers. In making such estimates, management analyzes historical returns, current economic trends and changes in customer demand and acceptance of its products. The Company expenses shipping and handling costs as incurred and includes them in the cost of revenues. In those cases where the Company bills shipping and handling costs to customers, it will classify the amounts billed as a component of revenue. |
Cost of Revenues | Cost of Revenues Cost of revenues consists primarily of manufacturing overhead costs, material costs and direct labor. A significant portion of the Company’s cost of revenues currently consists of manufacturing overhead costs. These overhead costs include the cost of quality assurance, material procurement, inventory control, facilities, equipment and operations supervision and management. Cost of revenues also includes depreciation expense for the Lightboxes under lease agreements and certain direct costs such as shipping costs. |
Product Warranty Costs | Product Warranty Costs The Company typically offers a one-year warranty for parts and labor on its products commencing upon the transfer of title and risk of loss to the customer. The Company accrues for the estimated cost of product warranties upon invoicing its customers, based on historical results. The warranty obligation is affected by product failure rates, material usage and service delivery costs incurred in correcting a product failure. Should actual product failure rates, material usage or service delivery costs differ from these estimates, revisions to the estimated warranty liability would be required. Periodically the Company assesses the adequacy of its recorded warranty liabilities and adjusts the amounts as necessary. Warranty provisions and claims are summarized as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance beginning of year $ $ $ Warranty provision Usage/Release ) ) ) Balance end of year $ $ $ |
Research and Development | Research and Development The Company expenses research and development costs as incurred. Research and development expenses include personnel and personnel-related costs, costs associated with pre-clinical and clinical development activities, and costs for prototype products that are manufactured prior to market approval for that prototype product; internal and external costs associated with the Company’s regulatory compliance and quality assurance functions, including the costs of outside consultants and contractors that assist in the process of submitting and maintaining regulatory filings; and overhead costs, including allocated facility and related expenses. |
Clinical Trials | Clinical Trials The Company accrues and expenses costs for its clinical trial activities performed by third parties, including clinical research organizations and other service providers, based upon estimates of the work completed over the life of the individual study in accordance with associated agreements. The Company determines these estimates through discussion with internal personnel and outside service providers as to progress or stage of completion of trials or services pursuant to contracts with clinical research organizations and other service providers and the agreed-upon fee to be paid for such services. |
Advertising Costs | Advertising Costs The Company expenses advertising costs as incurred. Advertising costs include design and production costs, including website development, physician and patient testimonial videos, written media campaigns, and other items. Advertising costs of approximately $515,000, $720,000 and $321,000 were expensed during the years ended December 31, 2015, 2014 and 2013, respectively. |
Common Stock Valuation and Stock-Based Compensation | Common Stock Valuation and Stock-Based Compensation Stock-based compensation for the Company includes amortization related to all stock options, restricted stock units and shares issued under the employee stock purchase plan, based on the grant-date estimated fair value. The fair value of stock options is estimated on the date of grant using the Black-Scholes option pricing model and recognized as expense on a straight-line basis over the vesting period of the award. The Company measures the fair value of restricted stock units (“RSUs”) using the closing stock price of a share of the Company’s common stock on the grant date and is recognized as expense on a straight-line basis over the vesting period of the award. Because noncash stock-based compensation expense is based on awards ultimately expected to vest, it is reduced by an estimate for future forfeitures. The Company estimates a forfeiture rate for its stock options and RSUs based on an analysis of its actual forfeitures based on actual forfeiture experience and other factors. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from estimates. Prior to the closing of the Company’s IPO in January 2015, the fair value of the Company’s common stock was determined by its Board of Directors with assistance from management and third-party valuation specialists. Management’s approach to estimate the fair value of the Company’s common stock is consistent with the methods outlined in the American Institute of Certified Public Accountants Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation . Management considered several factors to estimate enterprise value, including significant milestones that would generally contribute to increases in the value of the Company’s common stock. Following the closing of the Company’s IPO, the fair value of its common stock is determined based on the closing price of its common stock on The NASDAQ Global Market. |
Foreign Currency | Foreign Currency The Company records net gains and losses resulting from foreign exchange transactions as a component of foreign currency exchange losses in other income (expense), net. During the years ended December 31, 2015 and 2014, the Company recorded $18,000 and $21,000 of foreign currency exchange net losses, respectively, and $11,000 of net gains during the year ended December 31, 2013. |
Income Taxes | Income Taxes The Company utilizes the liability method of accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax reporting bases of assets and liabilities and are measured using enacted tax rates and laws that are expected to be in effect when the differences are expected to reverse. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company’s policy is to record interest and penalties on uncertain tax positions as income tax expense when they occur. During the years ended December 31, 2015, 2014 and 2013, the Company did not recognize accrued interest or penalties related to unrecognized tax benefits. |
Net Loss per Share Attributable to Common Stockholders | Net Loss per Share Attributable to Common Stockholders Basic net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration for potential dilutive common shares. Diluted net loss per share attributable to common stockholders is computed by dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock and dilutive potential shares of common stock outstanding during the period. Common stock shares subject to repurchase are excluded from the calculations as the continued vesting of such shares is contingent upon the holders’ continued service to the Company. For the computation of net loss per share attributable to common stockholders, common stock shares subject to repurchase of none, 583 and 1,249 were excluded from the calculations as of December 31, 2015, 2014 and 2013, respectively. Since the Company was in a loss position for all periods presented, basic net loss per share attributable to common stockholders is the same as diluted net loss per share attributable to common stockholders as the inclusion of all potentially dilutive common shares would have been anti-dilutive. The Company allocates no loss to participating securities because they have no contractual obligation to share in the losses of the Company. The shares of the Company’s convertible preferred stock participate in any dividends declared by the Company and are therefore considered to be participating securities.Net loss per share attributable to common stockholders was determined as follows (in thousands, except per share data): Year Ended December 31, 2015 2014 2013 Net loss $ ) $ ) $ ) Adjustment to net loss resulting from convertible preferred stock modification ) — — Net loss attributable to common stockholders $ ) $ ) $ ) Weighted average common stock outstanding Net loss attributable to common stockholders per share, basic and diluted $ ) $ ) $ ) In addition to the outstanding convertible notes as of December 31, 2014 and 2013 (Note 8), 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: December 31, 2015 2014 2013 Convertible preferred stock outstanding — Common stock options Unvested restricted stock units — — Common stock warrants |
Comprehensive Loss | Comprehensive Loss For the years ended December 31, 2015, 2014 and 2013, there was no difference between comprehensive loss and the Company’s net loss. |
Segment and Geographical Information | Segment and Geographical Information The Company operates and manages its business as one reportable and operating segment. The Company’s chief executive officer, who is the chief operating decision maker, reviews financial information on an aggregate basis for purposes of allocating resources and evaluating financial performance. Primarily all of the Company’s long-lived assets are based in the United States. Long-lived assets are comprised of property and equipment. For the years ended December 31, 2015, 2014 and 2013, 98%, 99% and 98%, respectively, of the Company’s revenues, were in the United States, based on the shipping location of the external customer. |
Change in Accounting Principle and Recent Accounting Pronouncements | Change in Accounting Principle In April 2015, the Financial Accounting Standards Board (“FASB”) issued an accounting standard update that requires debt issuance costs related to a recognized debt liability to be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The updated standard requires retrospective adoption and is effective for financial statements issued for fiscal years beginning after December 15, 2015 and interim periods within those fiscal years. Early adoption is permitted. During the third quarter of 2015, the Company elected early adoption of this accounting standard. The balance sheet as of December 31, 2014 has been adjusted to reflect the retrospective application of the new method of presentation. Deferred debt issuance costs totaling $343,000 that were included in the Company’s assets as of December 31, 2014 were reclassified as a discount on borrowings. The Company has reflected these costs as a reduction of the debt on the balance sheet as of December 31, 2015 and will continue to do so in future periods. The adoption of this accounting standard had no impact on the Company’s statements of operations, stockholders’ equity (deficit) or cash flows. Recent Accounting Pronouncements In May 2014, the FASB, jointly with the International Accounting Standards Board, issued a comprehensive new standard on recognition from contracts with customers. The standard’s core principle is that a reporting entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. On July 9, 2015, FASB voted to delay the effective date of the new standard by one year. As such the standard will become effective for the Company beginning in the first quarter of 2018. Early application would be permitted in 2017. Entities would have the option of using either a full retrospective or a modified retrospective approach to adopt this new guidance. The Company is currently evaluating the impact of its adoption and transition approach of this standard on its financial statements. In August 2014, the FASB issued ASU No. 2014-15—Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern under ASC Subtopic 205-40, Presentation of Financial Statements—Going Concern. ASU No. 2014-15 provides guidance about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and to provide related footnote disclosures. ASU 2014-15 is effective for the Company’s annual reporting period ending December 31, 2016 and all annual and interim reporting periods thereafter, with early adoption permitted. The Company has not elected to early adopt this standard. When adopted, ASU 2014-15 will require Management’s evaluation to be based on relevant conditions and events that are known or reasonably knowable at the date that the financial statements are issued (or at the date that the financial statements are available to be issued when applicable). Under AS 2014-15 s ubstantial doubt about an entity’s ability to continue as a going concern exists when relevant conditions and events, considered in the aggregate, indicate that it is probable that the entity will be unable to meet its obligations as they become due within one year after the date that the financial statements are issued (or available to be issued). The Company’s liquidity matters are discussed in the Note 1 to the financial statements. In April 2015, the FASB issued an accounting standard which provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If the arrangement does not include a software license, the customer should account for a cloud computing arrangement as a service contract. It is effective for annual periods beginning after December 15, 2015. Early adoption is permitted. The amendment may be adopted either prospectively to all arrangements entered into or materially modified after the effective date or retrospectively. The Company expects to adopt the standard on a prospective basis and does not expect its adoption to have a material effect on its financial statements. In July 2015, the FASB issued an accounting standard which applies to all inventory that is measured using methods other than last-in, first-out or the retail inventory method, including inventory that is measured using first-in, first-out or average cost. The standard requires entities to measure inventory at the lower of cost and net realizable value, defined as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. The guidance is effective for public entities for fiscal years beginning after December 15, 2016, and interim periods with fiscal years beginning after December 15, 2017. The amendments in the standard should be applied prospectively with earlier application permitted as of the beginning of an interim or annual reporting period. The Company does not expect the adoption of this standard to have a material effect on its financial statements. |
Summary of Significant Accoun26
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Summary of Significant Accounting Policies | |
Summary of warranty provisions and claims | Warranty provisions and claims are summarized as follows (in thousands): Year Ended December 31, 2015 2014 2013 Balance beginning of year $ $ $ Warranty provision Usage/Release ) ) ) Balance end of year $ $ $ |
Schedule of net loss per share attributable to common stockholders | Net loss per share attributable to common stockholders was determined as follows (in thousands, except per share data): Year Ended December 31, 2015 2014 2013 Net loss $ ) $ ) $ ) Adjustment to net loss resulting from convertible preferred stock modification ) — — Net loss attributable to common stockholders $ ) $ ) $ ) Weighted average common stock outstanding Net loss attributable to common stockholders per share, basic and diluted $ ) $ ) $ ) |
Schedule of outstanding securities excluded from the computation due to antidilutive impact | December 31, 2015 2014 2013 Convertible preferred stock outstanding — Common stock options Unvested restricted stock units — — Common stock warrants |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Fair Value Measurements | |
Summary of changes in the estimated fair value of the common stock warrant liability | Accordingly, the expense in the table below includes changes in fair value due in part to observable factors that are part of the Level 3 methodology (in thousands): Year Ended December 31, 2015 2014 2013 Fair value - beginning of year $ — $ ) $ — Issuance of warrants — — ) Change in fair value recorded in other income (expense), net — ) ) Reclass of warrant liability to additional paid-in capital — — Fair value - end of year $ — $ — $ ) |
Schedule of assumptions used in determining the fair value of the common stock warrants | The following table summarizes these various assumptions as of September 2, 2014, the date the price per share September 2, 2014 December 31, 2013 Time to liquidity (years) Expected volatility % % Discounted cash flow rate % % Risk-free interest rate % % Marketability discount rate % % |
Summary of changes in the estimated fair value of the compound embedded derivative | in the table below includes changes in fair value due in part to observable factors that are part of the Level 3 methodology (in thousands): Year Ended December 31, 2015 2014 2013 Fair value of asset (liability) - beginning of year $ $ ) $ — Issuance of convertible notes — — ) Change in fair value recorded in other income (expense), net Reversal of fair value recorded in other income (expense), net ) — — Fair value of asset (liability) - end of year $ — $ $ ) |
Monte Carlo Simulation model | |
Fair Value Measurements | |
Schedule of assumptions used to determine the fair value of the compound derivative | The following table summarizes these various assumptions Year Ended December 31, 2014 2013 Equity financing in 2014 % % Equity financing in 2015 % % Liquidation % % Initial public offering % % Change of control % % |
Black-Derman-Toy model | |
Fair Value Measurements | |
Schedule of assumptions used to determine the fair value of the compound derivative | The following table summarizes these various assumptions as of September 22, 2015 date of extinguishment September 22, 2015 Time to first call option (years) — Credit spread % Expected volatility % |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Inventories | |
Schedule of inventories | Inventories consisted of the following (in thousands): December 31, 2015 2014 Raw materials $ $ Work-in-process Finished products Total inventories $ $ |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Property and Equipment, Net | |
Schedule of property and equipment, net | Property and equipment, net, consisted of the following (in thousands): December 31, 2015 2014 Computer software $ $ Computer equipment Machinery and equipment Furniture and fixtures Leasehold improvements Equipment held by customers Less: Accumulated depreciation and amortization ) ) Add: Construction-in-progress $ $ |
Accrued Expenses and Other Cu30
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Accrued Expenses and Other Current Liabilities | |
Summary of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): December 31, 2015 2014 Accrued interest payable $ $ Accrued professional services Accrued travel expenses Accrued sales, use and other taxes Accrued warranty Sales return allowance Accrued clinical trial costs Other accrued liabilities $ $ |
Borrowings (Tables)
Borrowings (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Credit Agreement | |
Debt Instrument [Line Items] | |
Schedule of principal and PIK payments under the Loan Agreement | As of December 31, 2015, principal and PIK payments under the Loan Agreement follows (in thousands): Period Ending December 31, Principal and PIK Loan Repayments 2016 $ — 2017 — 2018 — 2019 2020 and thereafter Add: Accretion of closing fees Add: PIK Less: Amount representing debt financing costs ) Borrowings, net of current portion $ |
Capital Leases (Tables)
Capital Leases (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Capital Leases | |
Schedule of future minimum lease payments | The future minimum lease payments as of December 31, 2015, are as follows (in thousands): Future Minimum Year ending December 31, Lease Payments 2016 2017 2018 Total minimum payments Less: Amount representing future interest Present value of minimum lease payments $ |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Commitments and Contingencies | |
Schedule of future minimum lease payments | The future minimum lease payments as of December 31, 2015, are as follows (in thousands): Future Minimum Year ending December 31, Lease Payments 2016 $ Total minimum lease payments $ |
Convertible Preferred Stock (Ta
Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Convertible Preferred Stock | |
Schedule of convertible preferred stock authorized and outstanding | At December 31, 2014, convertible preferred stock authorized and outstanding consisted of the following (in thousands except share amounts): Shares Preferential Shares Issued and Carrying Liquidation Series Authorized Outstanding Value Value Series A $ $ Series A-1 Series B Series C Series D Series E $ $ |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stockholders' Equity (Deficit) | |
Summary of option activity | Options Outstanding Shares Weighted Aggregate Available for Number of Average Intrinsic Value Grant Shares Exercise Price (in thousands) Balance at December 31, 2012 $ $ Options granted ) $ Options exercised — ) $ Options cancelled ) $ Shares repuchased — $ Balance at December 31, 2013 $ $ — Additional shares reserved — Options granted ) $ Options exercised — ) $ Options cancelled ) $ Balance at December 31, 2014 $ $ Additional shares reserved — Options granted ) $ RSUs granted ) — Options exercised — ) $ Options cancelled ) $ Balance at December 31, 2015 $ $ |
Schedule of additional information related to the status of options | Options Outstanding and Vested as of December 31, 2015 Options Outstanding Options Vested Weighted Weighted Weighted Average Average Average Exercise Options Remaining Exercise Number Exercise Price Outstanding Contractual Life Price Exercisable Price $ $ $ $ $ $ $ $ $ $ $ — $ $ $ — $ $ $ $ $ $ $ $ $ — $ $ $ — $ $ $ $ $ $ $ $ $ $ $ $ Options Outstanding and Vested as of December 31, 2014 Options Outstanding Options Vested Weighted Weighted Weighted Average Average Average Exercise Options Remaining Exercise Number Exercise Price Outstanding Contractual Life Price Exercisable Price $ $ $ $ $ — $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Stock-Based Compensation | |
Schedule of assumptions used to estimate the fair value of employee stock options | Year Ended December 31, 2015 2014 2013 Expected term (years) Expected volatility % % % Risk-free interest rate % % % Dividend rate — — — |
Schedule of assumptions used to estimate the fair value of shares to be issued under the ESPP | Year Ended December 31, 2015 Expected term (years) Expected volatility % Risk-free interest rate % Dividend rate — |
Schedule of total stock-based compensation expense recognized, before taxes | ESPP and RSUs recognized, before taxes, during the years ended December 31, 2015, 2014 and 2013, is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Cost of revenues $ $ $ Research and development expenses Selling, general and administrative expenses $ $ $ |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Income Taxes | |
Reconciliation of the statutory U.S. federal rate to the Company's effective tax rate | A reconciliation of the statutory U.S. federal rate to the Company’s effective tax rate is as follows (in thousands): Year Ended December 31, 2015 2014 2013 Tax at federal statutory rate $ ) $ ) $ ) State taxes, net of federal benefit — Permanent differences Change in valuation allowance Research credits ) ) ) Other ) Provision for taxes $ — $ $ |
Schedule of significant components of net deferred tax assets | Significant components of the Company’s net deferred tax assets as of December 31, 2015 and 2014 consist of the following (in thousands): As of December 31, 2015 2014 Deferred tax assets: Federal, state, and foreign net operating losses $ $ Research and other credits Fixed assets Interest Accruals and other Total deferred tax assets Less: Valuation allowance ) ) Net deferred tax assets $ — $ — |
Reconciliation of unrecognized tax benefits | A reconciliation of the unrecognized tax benefits from January 1, 2013 through December 31, 2015 is as follows (in thousands): As of December 31, 2015 2014 2013 Balance at beginning of year $ $ $ Additions based on tax positions related to current year Additions for tax positions of prior years — Balance at end of year $ $ $ |
Selected Quarterly Financial 38
Selected Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2015 | |
Selected Quarterly Financial Information (Unaudited) | |
Schedule of unaudited quarterly information | Net loss per share for all periods presented has been retroactively adjusted to reflect the 1-for-45 reverse stock split effected on January 28, 2015 (in thousands, except per share data): Three Months Ended Three Months Ended Mar 31, Jun 30, Sep 30, Dec 31, Mar 31, Jun 30, Sep 30, Dec 31, 2015 2015 2015 2015 2014 2014 2014 2014 Revenues $ $ $ $ $ $ $ $ Gross profit Operating expenses Net loss ) ) ) ) ) ) ) ) Net loss per share, basic and diluted $ ) $ ) $ ) $ ) $ ) $ ) $ ) $ ) |
Organization - Liquidity Matter
Organization - Liquidity Matters (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Borrowings | ||||
Accumulated deficit | $ 196,261,000 | $ 146,533,000 | ||
Cash and cash equivalents | 43,059,000 | $ 12,316,000 | $ 12,221,000 | $ 20,617,000 |
Loan Agreement | CRG | ||||
Borrowings | ||||
Additional amount available under the loan agreement | $ 10,000,000 |
Organization - Initial Public O
Organization - Initial Public Offering (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Conversion of Convertible Preferred Stock into Common Stock upon IPO | Convertible preferred stock outstanding | ||||
Common stock and convertible preferred stock | ||||
Amount reclassified from outside of stockholders' equity (deficit) | $ 137,626,000 | |||
Common Stock | ||||
Common stock and convertible preferred stock | ||||
Number of shares sold in initial public offering | 2,568 | 9,590 | ||
Number of shares issued for convertible preferred stock | 6,967,925 | |||
Common Stock | Conversion of Convertible Preferred Stock into Common Stock upon IPO | ||||
Common stock and convertible preferred stock | ||||
Number of shares issued for convertible preferred stock | 6,967,925 | |||
Additional Paid-in Capital | Conversion of Convertible Preferred Stock into Common Stock upon IPO | ||||
Common stock and convertible preferred stock | ||||
Amount reclassified to additional paid-in-capital on conversion of preferred stock | $ 137,626,000 | |||
Initial Public Offering | Common Stock | ||||
Common stock and convertible preferred stock | ||||
Number of shares sold in initial public offering | 5,000,000 | 5,000,000 | ||
Public offering price (in dollars per share) | $ 13 | |||
Net proceeds from initial public offering | $ 56,897,000 | |||
Underwriting discounts and commissions | 4,550,000 | |||
Other offering expenses | $ 3,553,000 |
Summary of Significant Accoun41
Summary of Significant Accounting Policies - Reverse Stock Split, Fair Value, Cash (Details) | Jan. 14, 2015 | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Summary of Significant Accounting Policies | |||
Reverse stock split ratio | 0.022 | ||
Fair Value of Financial Instruments | |||
Warrant liabilities | $ 0 | ||
Embedded derivatives outstanding | 0 | ||
Cash and Cash Equivalents | |||
Unrealized gains and losses on money market funds | 0 | ||
Restricted Cash | |||
Restricted cash | $ 255,000 | ||
Release of restriction against cash | $ 255,000 |
Summary of Significant Accoun42
Summary of Significant Accounting Policies - Concentration Risk (Details) - Customer Concentration - customer | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts Receivable | |||
Concentration of Credit Risk, and Other Risks and Uncertainties | |||
Number of customers above 10% concentration disclosure threshold | 1 | 0 | |
Revenues | |||
Concentration of Credit Risk, and Other Risks and Uncertainties | |||
Number of customers above 10% concentration disclosure threshold | 0 | 0 | 0 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Offering Costs and Convertible Stock (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | |
Deferred Initial Public Offering Costs | |||
Deferred offering costs capitalized | $ 2,608,000 | $ 29,000 | |
Payments for deferred offering costs | $ 1,848,000 | ||
Common Stock | |||
Convertible Preferred Stock | |||
Number of shares issued for convertible preferred stock | 6,967,925 | ||
Conversion of Convertible Preferred Stock into Common Stock upon IPO | Convertible preferred stock outstanding | |||
Convertible Preferred Stock | |||
Amount reclassified from outside of stockholders' equity (deficit) | $ 137,626,000 | ||
Conversion of Convertible Preferred Stock into Common Stock upon IPO | Common Stock | |||
Convertible Preferred Stock | |||
Number of shares issued for convertible preferred stock | 6,967,925 | ||
Conversion of Convertible Preferred Stock into Common Stock upon IPO | Additional Paid-in Capital | |||
Convertible Preferred Stock | |||
Amount reclassified to additional paid-in-capital on conversion of preferred stock | $ 137,626,000 | ||
Initial Public Offering | Common Stock | |||
Deferred Initial Public Offering Costs | |||
Other offering expenses | $ 3,553,000 |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Product Warranty, Advertising, Foreign Currency (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Product Warranty Costs | |||
Warranty period | 1 year | ||
Changes in warranty provisions | |||
Balance beginning of period | $ 167,000 | $ 105,000 | $ 11,000 |
Warranty provision | 70,000 | 140,000 | 230,000 |
Usage/Release | (167,000) | (78,000) | (136,000) |
Balance end of period | 70,000 | 167,000 | 105,000 |
Advertising Costs | |||
Advertising Costs | 515,000 | 720,000 | 321,000 |
Foreign Currency | |||
Gains (losses) on foreign currency exchange | $ (18,000) | $ (21,000) | $ 11,000 |
Summary of Significant Accoun45
Summary of Significant Accounting Policies - Loss Per Share (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Loss per Share | |||||||||||
Common stock shares subject to repurchase, excluded from net loss per share calculations | 0 | 583 | 1,249 | ||||||||
Loss allocated to participating securities, basic | $ 0 | $ 0 | $ 0 | ||||||||
Loss allocated to participating securities, diluted | 0 | 0 | 0 | ||||||||
Net loss | $ (13,456,000) | $ (13,250,000) | $ (10,220,000) | $ (12,801,000) | $ (8,135,000) | $ (8,780,000) | $ (7,078,000) | $ (7,971,000) | (47,344,000) | (31,964,000) | (39,901,000) |
Conversion of preferred stock to common stock in connection with the initial public offering | (2,384,000) | ||||||||||
Net loss attributable to common stockholders | $ (49,728,000) | $ (31,964,000) | $ (39,901,000) | ||||||||
Weighted average common stock outstanding (in shares) | 11,362,000 | 241,000 | 234,000 | ||||||||
Net loss per share, basic and diluted (in dollars per share) | $ (1.07) | $ (1.08) | $ (0.83) | $ (1.53) | $ (33.62) | $ (36.43) | $ (29.37) | $ (33.21) | $ (4.38) | $ (132.63) | $ (170.52) |
Comprehensive Loss | |||||||||||
Difference between comprehensive loss and the Company's net loss | $ 0 | $ 0 | $ 0 |
Summary of Significant Accoun46
Summary of Significant Accounting Policies - Antidilutive Securities (Details) - shares | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Net Loss per Share | |||
Anti-dilutive shares excluded from computation of earnings per share | 5,643,434 | 9,825,428 | 3,041,443 |
Convertible preferred stock outstanding | |||
Net Loss per Share | |||
Anti-dilutive shares excluded from computation of earnings per share | 5,262,728 | 2,591,102 | |
Employee stock options | |||
Net Loss per Share | |||
Anti-dilutive shares excluded from computation of earnings per share | 3,356,981 | 3,010,373 | 398,740 |
Restricted stock units | |||
Net Loss per Share | |||
Anti-dilutive shares excluded from computation of earnings per share | 92,946 | ||
Common stock warrants | |||
Net Loss per Share | |||
Anti-dilutive shares excluded from computation of earnings per share | 2,193,507 | 1,552,327 | 51,601 |
Summary of Significant Accoun47
Summary of Significant Accounting Policies - Segment and Geographical (Details) - segment | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Segment and Geographical Information | |||
Number of reportable segments | 1 | ||
Number of operating segments | 1 | ||
Revenues | Customer Concentration | UNITED STATES | |||
Segment and Geographical Information | |||
Percentage of revenue | 98.00% | 99.00% | 98.00% |
Summary of Significant Accoun48
Summary of Significant Accounting Policies - Accounting Change (Details) - USD ($) | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Change in Accounting Principle | |||
Other assets | $ 225,000 | $ 3,029,000 | |
Borrowings, net of current portion | $ 29,565,000 | $ 18,228,000 | |
Early adoption of accounting standard | Accounting Standards Update 2015-03: Simplifying the Presentation of Debt Issuance Costs | |||
Change in Accounting Principle | |||
Other assets | $ (343,000) | ||
Borrowings, net of current portion | $ (343,000) |
Fair Value Measurements - Trans
Fair Value Measurements - Transfers (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Fair Value Measurements | |||
Transfer of assets and liabilities between fair value hierarchy levels | $ 0 | $ 0 | $ 0 |
Fair Value Measurements - Commo
Fair Value Measurements - Common Stock Warrants (Details) - Common Stock Warrants issued with Convertible Notes - USD ($) | Sep. 02, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 |
Changes in estimated fair value, financial instrument classified as Level 3 | |||||
Fair value - beginning of period | $ (6,000) | ||||
Issuance of warrants | $ (1,000) | $ (1,000) | |||
Change in fair value recorded in other income (expense), net | (28,000) | (5,000) | |||
Reclass of warrant liability to additional paid-in capital | $ 34,000 | ||||
Fair value - end of period | $ (6,000) | $ (6,000) | |||
Level 3 | |||||
Assumptions used in determining fair value | |||||
Time to liquidity (years) | 8 months 12 days | 2 years | |||
Expected volatility (as a percent) | 45.00% | 55.00% | |||
Discounted cash flow rate (as a percent) | 23.00% | 25.00% | |||
Risk-free interest rate (as a percent) | 0.07% | 0.38% | |||
Marketability discount rate (as a percent) | 17.00% | 23.00% |
Fair Value Measurements - Embed
Fair Value Measurements - Embedded Derivatives (Details) - Embedded derivatives in convertible notes - USD ($) $ in Thousands | Sep. 23, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Changes in estimated fair value, financial instrument classified as Level 3 | ||||
Fair value - beginning of period | $ 231 | $ (175) | ||
Issuance of convertible notes | $ (179) | |||
Change in fair value recorded in other income (expense), net | 835 | 406 | 4 | |
Reversal of fair value recorded in other income (expense), net | $ (1,066) | |||
Fair value - end of period | $ 231 | $ (175) | ||
Level 3 | ||||
Assumptions used in determining fair value | ||||
Equity financing in 2014 (as a percent) | 100.00% | 100.00% | ||
Equity financing in 2015 (as a percent) | 14.30% | 58.20% | ||
Liquidation (as a percent) | 0.10% | 1.50% | ||
Initial public offering (as a percent) | 79.50% | 16.70% | ||
Change of control (as a percent) | 6.20% | 25.10% | ||
Credit spread (as a percent) | 17.60% | |||
Expected volatility (as a percent) | 40.00% |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 2,662 | $ 2,265 |
Work-in-process | 372 | 61 |
Finished products | 2,371 | 1,665 |
Total inventories | $ 5,405 | $ 3,991 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Property and Equipment, Net | |||
Less: Accumulated depreciation and amortization | $ (5,044,000) | $ (3,827,000) | |
Property and equipment, net | 2,822,000 | 2,608,000 | |
Depreciation | 1,300,000 | 1,451,000 | $ 1,501,000 |
Amortization of capital leased assets | 17,000 | 17,000 | 16,000 |
Computer software | |||
Property and Equipment, Net | |||
Property and equipment, gross | 436,000 | 320,000 | |
Computer equipment | |||
Property and Equipment, Net | |||
Property and equipment, gross | 1,096,000 | 867,000 | |
Machinery and equipment | |||
Property and Equipment, Net | |||
Property and equipment, gross | 3,372,000 | 2,993,000 | |
Furniture and fixtures | |||
Property and Equipment, Net | |||
Property and equipment, gross | 578,000 | 542,000 | |
Leasehold improvements | |||
Property and Equipment, Net | |||
Property and equipment, gross | 655,000 | 655,000 | |
Equipment held by customers | |||
Property and Equipment, Net | |||
Property and equipment, gross | 1,718,000 | 1,045,000 | |
Property and equipment, net | 1,236,000 | 760,000 | |
Depreciation recorded in cost of revenues | 260,000 | 378,000 | $ 425,000 |
Property and equipment, excluding construction-in-progress | |||
Property and Equipment, Net | |||
Property and equipment, gross | 7,855,000 | 6,422,000 | |
Construction-in-progress | |||
Property and Equipment, Net | |||
Property and equipment, gross | $ 11,000 | $ 13,000 |
Accrued Expenses and Other Cu54
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2015 | Dec. 31, 2014 |
Accrued Expenses and Other Current Liabilities | ||
Accrued professional services | $ 563 | $ 1,917 |
Accrued travel expenses | 550 | 464 |
Accrued sales, use and other taxes | 82 | 112 |
Accrued clinical trial costs | 55 | 359 |
Accrued interest payable | 1,220 | 1,150 |
Sales return allowance | 59 | 77 |
Accrued warranty | 70 | 167 |
Other accrued liabilities | 686 | 604 |
Total accrued expenses and other current liabilities | $ 3,285 | $ 4,850 |
Borrowings - Loan Agreement wit
Borrowings - Loan Agreement with CRG (Details) - Loan Agreement - CRG - USD ($) | Sep. 22, 2015 | Dec. 31, 2015 |
Borrowings | ||
Total borrowing capacity | $ 50,000,000 | |
Initial amount borrowed | 30,000,000 | |
Additional borrowing capacity | 10,000,000 | |
Additional borrowing capacity if revenue milestones are achieved | $ 10,000,000 | |
Fixed interest rate (as a percent) | 12.50% | |
Interest rate, cash payment if electing PIK for the remaining amount (as a percent) | 8.50% | |
Interest rate, eligible for payment-in-kind (as a percent) | 4.00% | |
Beginning prepayment premium (as a percent) | 5.00% | |
Annual decline in prepayment premium (as a percent) | 1.00% | |
Prepayment premium after fifth year of loan (as a percent) | 0.00% | |
Financing fee on each borrowing date (as a percent) | 1.50% | |
Final facility fee (as a percent) | 7.00% | |
Minimum cash and certain cash equivalents required to be maintained | $ 5,000,000 | |
Target minimum revenue in 2015 | 7,000,000 | |
Target minimum revenue in 2020 and in each year thereafter | $ 70,000,000 | |
Revenue shortfall multiplier for cure right if minimum revenue targets are not achieved | 2 | |
First tranche, borrowed on September 22, 2015 | ||
Borrowings | ||
Initial amount borrowed | $ 30,000,000 | |
Period for interest-only payments | 4 years | |
Period for equal quarterly installments of interest and principal | 2 years |
Borrowings - Repayment Schedule
Borrowings - Repayment Schedule (Details) - USD ($) | Dec. 31, 2015 | Sep. 22, 2015 | Dec. 31, 2014 |
Principal and PIK Loan Repayments | |||
Borrowings, net of current portion | $ 29,565,000 | $ 18,228,000 | |
Loan Agreement | CRG | |||
Principal and PIK Loan Repayments | |||
2,019 | 7,500,000 | ||
2020 and thereafter | 22,500,000 | ||
Total | 30,000,000 | ||
Add: Accretion of closing fees | 65,000 | ||
Add: PIK | 334,000 | ||
Borrowings, before deducting debt financing costs | 30,399,000 | ||
Less: Amount representing debt financing costs | (834,000) | $ (876,000) | |
Borrowings, net of current portion | $ 29,565,000 |
Borrowings - Securities Purchas
Borrowings - Securities Purchase and Debt Discount (Details) | Sep. 22, 2015USD ($)item$ / sharesshares | Dec. 31, 2015USD ($)shares | Dec. 31, 2014shares | Dec. 31, 2013shares |
Common Stock | ||||
Borrowings | ||||
Shares issued during the period | shares | 2,568 | 9,590 | ||
Securities Purchase Agreement | Common Stock | ||||
Borrowings | ||||
Shares issued during the period | shares | 348,262 | |||
Securities Purchase Agreement | CRG | Common Stock | ||||
Borrowings | ||||
Maximum amount that may be purchase under the agreement | $ 5,000,000 | |||
Shares issued during the period | shares | 348,262 | |||
Price of shares issued (in dollars per share) | $ / shares | $ 14.357 | |||
Number of trading days for average closing price to determine price per share | item | 10 | |||
Closing price (in dollars per share) | $ / shares | $ 13.97 | |||
Premium on shares issued (in dollars per share) | $ / shares | $ 0.387 | |||
Loan Agreement | CRG | ||||
Borrowings | ||||
Net debt discount | $ 876,000 | $ 834,000 | ||
Direct financing fees | 450,000 | |||
Other costs included in the debt discount | 541,000 | |||
Allocation of common stock premium | $ 115,000 |
Borrowings - Credit Agreement w
Borrowings - Credit Agreement with PDL (Details) - Credit Agreement - PDL - USD ($) | Sep. 22, 2015 | Apr. 18, 2013 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jun. 30, 2015 |
Borrowings | ||||||
Maximum borrowing capacity | $ 40,000,000 | |||||
Additional borrowing capacity | 0 | |||||
Minimum | ||||||
Borrowings | ||||||
Additional borrowing capacity contingent on achieving revenue milestones | 10,000,000 | |||||
Maximum | ||||||
Borrowings | ||||||
Additional borrowing capacity contingent on achieving revenue milestones | 20,000,000 | |||||
Term Note | ||||||
Borrowings | ||||||
Initial amount borrowed | $ 20,000,000 | |||||
Stated interest rate (as a percent) | 12.00% | |||||
Period for interest-only payments | 2 years 6 months | |||||
Period for convertibility of interest into additional loans | 2 years | |||||
Interest rate, paid-in-kind (as a percent) | 1.50% | |||||
Payoff amount | $ 21,363,000 | |||||
Accrued interest | 563,000 | |||||
Final payment fee | 200,000 | |||||
Interest expense | $ 2,785,000 | $ 3,380,000 | $ 2,492,000 | |||
Assigned Interests (as a percent) | 1.80% | |||||
Ongoing Assigned Interests | ||||||
Borrowings | ||||||
Reduced Assigned Interests upon prepayment (as a percent) | 0.90% | |||||
Effective interest rate (as a percent) | 20.40% | |||||
Net present value adjustment | $ 942,000 | |||||
Aggregate accrual for Assigned Interest obligations | $ 2,303,000 |
Convertible Notes (Details)
Convertible Notes (Details) - USD ($) | Oct. 29, 2013 | Sep. 30, 2015 | Jan. 31, 2015 | Sep. 30, 2014 | Nov. 30, 2013 | Nov. 30, 2014 | Jul. 31, 2014 | Jul. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 |
Convertible Notes | |||||||||||
Outstanding notes and accrued interest converted into shares of preferred stock | $ 11,582,000 | ||||||||||
Loss on extinguishment of convertible notes | $ 86,000 | 1,234,000 | |||||||||
Embedded derivatives in convertible notes | |||||||||||
Convertible Notes | |||||||||||
Fair value of embedded derivative liability recorded upon issuance | $ 179,000 | ||||||||||
Common Stock Warrants issued with Convertible Notes | |||||||||||
Convertible Notes | |||||||||||
Exercise price of warrants issued (in dollars per share) | $ 12.60 | $ 12.60 | $ 12.60 | ||||||||
Number of shares of common stock for which warrants were issued | 216,547 | ||||||||||
Fair value of warrants at issuance | $ 1,000 | 1,000 | |||||||||
Number of warrants net exercised | 149,288 | ||||||||||
Number of warrants exercised | 24,403 | ||||||||||
Number of warrants expired | 42,856 | ||||||||||
Common Stock Warrants issued with Convertible Notes | Maximum | |||||||||||
Convertible Notes | |||||||||||
Exercise price of warrants issued (in dollars per share) | $ 39.15 | $ 39.15 | |||||||||
Convertible Notes | |||||||||||
Convertible Notes | |||||||||||
Maximum aggregate principal amount | $ 25,000,000 | ||||||||||
Issuance of convertible notes | $ 13,472,000 | $ 4,720,000 | |||||||||
Minimum internal rate of return (as a percent) | 20.00% | ||||||||||
Conversion price as a percentage of the stock price paid by other investors | 85.00% | ||||||||||
Redemption price upon equity financing (as a percent) | 125.00% | ||||||||||
Carrying value of convertible notes and accrued interest prior to payoff | $ 9,867,000 | ||||||||||
Loss on extinguishment of convertible notes | $ 86,000 | ||||||||||
Interest expense | $ 1,230,000 | $ 2,633,000 | $ 433,000 | ||||||||
Convertible Notes | Embedded derivatives in convertible notes | |||||||||||
Convertible Notes | |||||||||||
Fair value of embedded derivative liability recorded upon issuance | $ 179,000 | ||||||||||
Convertible Notes | Conversion of notes into Series E Convertible Preferred Stock | |||||||||||
Convertible Notes | |||||||||||
Outstanding notes and accrued interest converted into shares of preferred stock | $ 11,582,000 | ||||||||||
Loss on extinguishment of convertible notes | $ 1,234,000 | ||||||||||
Convertible Notes | Common Stock Warrants issued with Convertible Notes | |||||||||||
Convertible Notes | |||||||||||
Percentage of principal amount of debt used to calculate number of shares under warrant | 15.00% | ||||||||||
Convertible Notes | LIBOR | |||||||||||
Convertible Notes | |||||||||||
LIBOR period used to calculate interest rate | 30 days | ||||||||||
Percentage added to interest rate base per annum | 6.00% |
Capital Leases (Details)
Capital Leases (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Capital Leases | ||
Aggregate amount of capital leases recorded within property and equipment, net | $ 39,000 | $ 12,000 |
Future minimum lease payments | ||
2,016 | 19,000 | |
2,017 | 18,000 | |
2,018 | 4,000 | |
Total minimum payments | 41,000 | |
Less: Amount representing future interest | 2,000 | |
Present value of minimum lease payments | $ 39,000 |
Commitments and Contingencies -
Commitments and Contingencies - Leases (Details) | 12 Months Ended | ||
Dec. 31, 2015USD ($)item | Dec. 31, 2014USD ($) | Dec. 31, 2013USD ($) | |
Lease Commitments | |||
Rent expense | $ 938,000 | $ 922,000 | $ 922,000 |
Annual minimum lease payments under non-cancelable future operating lease commitments | |||
2,016 | 1,060,000 | ||
Total minimum lease payments | $ 1,060,000 | ||
Facility lease | |||
Lease Commitments | |||
Number of renewal provisions | item | 2 | ||
Period of each available renewal | 3 years | ||
Lease incentives reflected as deferred rent | $ 369,000 |
Commitments and Contingencies62
Commitments and Contingencies - Purchase Obligation (Details) - USD ($) | Dec. 31, 2015 | Dec. 31, 2014 |
Purchase Obligations | ||
Noncancellable commitments to suppliers for purchases | $ 4,347,000 | $ 1,334,000 |
Commitments and Contingencies63
Commitments and Contingencies - Terminated Engagement Letter (Details) - Series E Convertible Preferred Stock | 1 Months Ended | 12 Months Ended |
Dec. 31, 2014USD ($)installment | Dec. 31, 2015USD ($) | |
Legal Proceedings | ||
Transaction fee to former financial advisor | $ 650,000 | |
Number of installments to pay transaction fee to former financial advisor | installment | 4 | |
Reimbursement to former financial advisor for out-of-pocket expenses | $ 35,000 |
Convertible Preferred Stock (De
Convertible Preferred Stock (Details) - USD ($) | Jan. 09, 2015 | Jan. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Convertible Preferred Stock Series A | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 326,595 | |||||
Shares Issued | 326,591 | |||||
Shares Outstanding | 326,591 | |||||
Carrying Value | $ 6,183,000 | $ 6,183,000 | $ 6,183,000 | |||
Preferential Liquidation Value | $ 6,212,000 | |||||
Convertible Preferred Stock Series A-1 | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 225,235 | |||||
Shares Issued | 225,235 | |||||
Shares Outstanding | 225,235 | |||||
Carrying Value | $ 6,649,000 | 6,649,000 | 6,649,000 | |||
Preferential Liquidation Value | $ 3,243,000 | |||||
Convertible Preferred Stock Series B | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 755,516 | |||||
Shares Issued | 755,486 | |||||
Shares Outstanding | 755,486 | |||||
Carrying Value | $ 27,272,000 | 27,272,000 | 27,272,000 | |||
Preferential Liquidation Value | $ 27,538,000 | |||||
Convertible Preferred Stock Series C | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 561,448 | |||||
Shares Issued | 561,423 | |||||
Shares Outstanding | 561,423 | |||||
Carrying Value | $ 22,397,000 | 22,397,000 | 22,397,000 | |||
Preferential Liquidation Value | $ 22,485,000 | |||||
Convertible Preferred Stock Series D | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 800,000 | |||||
Shares Issued | 722,367 | |||||
Shares Outstanding | 722,367 | |||||
Carrying Value | $ 37,153,000 | $ 37,153,000 | $ 37,158,000 | |||
Preferential Liquidation Value | $ 37,708,000 | |||||
Convertible Preferred Stock Series E | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 4,150,403 | |||||
Shares Issued | 2,671,626 | |||||
Shares Outstanding | 2,671,626 | |||||
Carrying Value | $ 32,606,000 | |||||
Preferential Liquidation Value | $ 134,650,000 | |||||
Shares issued during the period | 490,472 | 490,472 | 2,671,626 | |||
Price of shares issued (in dollars per share) | $ 12.60 | |||||
Net cash proceeds | $ 6,176,000 | |||||
Convertible preferred stock outstanding | ||||||
Convertible Preferred Stock | ||||||
Shares Authorized | 0 | 6,819,197 | ||||
Shares Issued | 0 | 5,262,728 | ||||
Shares Outstanding | 0 | 5,262,728 | ||||
Carrying Value | $ 132,260,000 | |||||
Preferential Liquidation Value | $ 0 | $ 231,836,000 | ||||
Common Stock | ||||||
Convertible Preferred Stock | ||||||
Shares issued during the period | 2,568 | 9,590 | ||||
Number of shares issued for convertible preferred stock | 6,967,925 |
Convertible Preferred Stock - P
Convertible Preferred Stock - Preferred Stock Plans (Details) - $ / shares | 1 Months Ended | 4 Months Ended | 5 Months Ended | 12 Months Ended | |||||
Sep. 30, 2012 | Dec. 31, 2014 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Aug. 31, 2014 | Dec. 31, 2012 | Jul. 19, 2012 | |
Convertible Preferred Stock | |||||||||
Options granted (in shares) | 614,363 | 2,720,174 | 272,308 | ||||||
Shares available for grant (in shares) | 21,705 | 21,705 | 884,509 | 21,705 | 61,111 | 156,288 | |||
Convertible Preferred Stock Series D | 2012 Plan | |||||||||
Convertible Preferred Stock | |||||||||
Shares authorized for issuance | 126,435 | ||||||||
Options granted (in shares) | 19,952 | ||||||||
Exercise price of options granted (in dollars per share) | $ 52.20 | ||||||||
Options exercised (in shares) | 10,267 | ||||||||
Options expired unexercised (in shares) | 9,685 | ||||||||
Shares available for grant (in shares) | 116,168 | ||||||||
Options outstanding (in shares) | 0 | ||||||||
Convertible Preferred Stock Series E | 2014 Plan | |||||||||
Convertible Preferred Stock | |||||||||
Shares authorized for issuance | 88,888 | ||||||||
Options granted (in shares) | 59,230 | ||||||||
Exercise price of options granted (in dollars per share) | $ 12.60 | ||||||||
Options exercised (in shares) | 53,744 | ||||||||
Shares available for grant (in shares) | 35,144 | 35,144 | 35,144 | ||||||
Options outstanding (in shares) | 0 | 0 | 0 |
Stockholders' Equity (Deficit66
Stockholders' Equity (Deficit) - Preferred, Common and Restricted Stock (Details) | 1 Months Ended | 12 Months Ended | ||
May. 31, 2012USD ($)agreementindividual$ / sharesshares | Dec. 31, 2015$ / sharesshares | Dec. 31, 2014$ / sharesshares | Dec. 31, 2013shares | |
Stockholders' Equity (Deficit) | ||||
Preferred stock, shares authorized | 5,000,000 | 0 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||
Preferred stock, shares issued | 0 | 0 | ||
Preferred stock, shares outstanding | 0 | 0 | ||
Common stock, shares authorized | 100,000,000 | 15,555,555 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||
Common stock, shares issued | 12,643,538 | 243,260 | ||
Common stock, shares outstanding | 12,643,538 | 243,260 | ||
Number of shares subject to repurchase | 0 | 583 | 1,249 | |
Restricted stock | ||||
Stockholders' Equity (Deficit) | ||||
Number of shares subject to repurchase | 583 | |||
Individuals providing intellectual property and consulting services | Restricted stock | ||||
Stockholders' Equity (Deficit) | ||||
Number of agreements entered into | agreement | 2 | |||
Number of individuals providing IP and consulting services | individual | 2 | |||
Number of common stock shares issued for each agreement | 1,666 | |||
Total number of shares issued | 3,332 | |||
Fair market value (in dollars per share) | $ / shares | $ 14.85 | |||
Total purchase price of shares issued | $ | $ 49,500 | |||
Percentage of shares released on the date of assignment | 20.00% | |||
Percentage of shares released per month thereafter | 0.02083% | |||
Total percentage of shares to be released monthly thereafter | 80.00% | |||
Stock compensation expense | $ | $ 49,500 |
Stockholders' Equity (Deficit67
Stockholders' Equity (Deficit) - Common Stock Warrants (Details) - USD ($) | 1 Months Ended | 4 Months Ended | 12 Months Ended | |
Jan. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stockholders' Equity (Deficit) | ||||
Allocated fair value of warrants recorded in stockholders' deficit | $ 804,000 | $ 175,000 | ||
Common Stock Warrants | ||||
Stockholders' Equity (Deficit) | ||||
Number of shares of common stock under warrants outstanding | 2,193,507 | 2,193,507 | ||
Common Stock Warrants issued with Series E Convertible Preferred Stock | ||||
Stockholders' Equity (Deficit) | ||||
Percentage of convertible preferred stock shares for issuance of warrants | 50.00% | |||
Exercise price of warrants issued (in dollars per share) | $ 12.60 | |||
Warrants issued to purchase shares of common stock (in shares) | 245,235 | 1,335,779 | ||
Allocated fair value of warrants recorded in stockholders' deficit | $ 804,000 | $ 175,000 | ||
Common Stock Warrants issued for amendment to Series E Convertible Preferred Stock | ||||
Stockholders' Equity (Deficit) | ||||
Percentage of convertible preferred stock shares for issuance of warrants | 70.00% | |||
Exercise price of warrants issued (in dollars per share) | $ 12.60 | |||
Warrants issued to purchase shares of common stock (in shares) | 632,381 | |||
Incremental fair value from the modification | $ 2,384,000 |
Stockholders' Equity (Deficit68
Stockholders' Equity (Deficit) - Stock Plan (Details) - USD ($) | 1 Months Ended | 12 Months Ended | ||||
Dec. 31, 2015 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2015 | Dec. 31, 2012 | |
Shares available for grant | ||||||
Balance at the beginning of the period (in shares) | 21,705 | 61,111 | 156,288 | |||
Additional shares reserved (in shares) | 1,320,000 | 2,574,795 | ||||
Options granted (in shares) | (614,363) | (2,720,174) | (272,308) | |||
RSUs granted (in shares) | (92,946) | |||||
Options cancelled (in shares) | 250,113 | 105,973 | 174,538 | |||
Shares repurchased (in shares) | 2,593 | |||||
Balance at the end of the period (in shares) | 884,509 | 884,509 | 21,705 | 61,111 | ||
Options outstanding | ||||||
Options granted (in shares) | 614,363 | 2,720,174 | 272,308 | |||
Options cancelled (in shares) | (250,113) | (105,973) | (174,538) | |||
Grants of RSUs | ||||||
Awards granted (in shares) | 92,946 | |||||
2015 Plan | ||||||
Stock Plan | ||||||
Shares reserved for issuance | 1,320,000 | |||||
Maximum annual increase in shares available for issuance (in shares) | 1,690,000 | |||||
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 5.00% | |||||
Stock options | ||||||
Stock Plan | ||||||
Vesting period | 4 years | |||||
Vesting cliff period | 1 year | |||||
Expiration term | 10 years | |||||
Shares available for grant | ||||||
Options granted (in shares) | (614,363) | 2,720,174 | (272,308) | |||
Options cancelled (in shares) | 250,113 | 105,973 | 174,538 | |||
Options outstanding | ||||||
Balance at the beginning of the period (in shares) | 3,010,373 | 398,740 | 313,153 | |||
Options granted (in shares) | 614,363 | (2,720,174) | 272,308 | |||
Options exercised (in shares) | (17,642) | (2,568) | (12,183) | |||
Options cancelled (in shares) | (250,113) | (105,973) | (174,538) | |||
Balance at the end of the period (in shares) | 3,356,981 | 3,356,981 | 3,010,373 | 398,740 | ||
Weighted Average Exercise Price | ||||||
Balance at the beginning of the period (in dollars per share) | $ 5.78 | $ 16.15 | $ 13.45 | |||
Granted (in dollars per shares) | 16.73 | 4.68 | 20.49 | |||
Exercised (in dollars per shares) | 4.50 | 8.85 | 7.89 | |||
Cancelled (in dollars per share) | 9.33 | 16.62 | 14.13 | |||
Shares repurchased (in dollars per share) | 14.85 | |||||
Balance at the end of the period (in dollars per share) | $ 7.53 | $ 7.53 | $ 5.78 | 16.15 | ||
Aggregate Intrinsic Value | $ 50,970,000 | $ 50,970,000 | $ 13,188,000 | $ 2,226,000 | ||
Additional stock option information | ||||||
Weighted-average grant date fair value of options granted | $ 8.24 | $ 6.60 | $ 7.20 | |||
Weighted average remaining contractual life of options outstanding and vested | 8 years 2 months 27 days | |||||
Aggregate intrinsic value of options outstanding and vested | $ 13,404,000 | $ 13,404,000 | ||||
Aggregate intrinsic value of options exercised | $ 236,000 | $ 0 | $ 153,000 | |||
Stock options | Minimum | ||||||
Stock Plan | ||||||
Exercise price as percentage of fair value of shares | 100.00% | |||||
Stock options | Minimum | Stockholder with more than 10% voting power | ||||||
Stock Plan | ||||||
Exercise price as percentage of fair value of shares | 110.00% | |||||
Restricted stock units | ||||||
Stock Plan | ||||||
Vesting period | 4 years | |||||
Shares available for grant | ||||||
RSUs granted (in shares) | (92,946) | |||||
Grants of RSUs | ||||||
Awards granted (in shares) | 92,946 | |||||
Grant date fair value (in dollars per share) | $ 19.61 | |||||
Awards vested (in shares) | 0 | |||||
Awards forfeited (in shares) | 0 |
Stockholders' Equity (Deficit69
Stockholders' Equity (Deficit) - Options by Exercise Price (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2015 | Dec. 31, 2014 | |
Options Outstanding | ||
Options Outstanding (in shares) | 3,356,981 | 3,010,373 |
Weighted Average Remaining Contractual Life | 8 years 10 months 28 days | 9 years 9 months |
Weighted Average Exercise Price (in dollars per share) | $ 7.53 | $ 5.78 |
Options Vested | ||
Number Exercisable (in shares) | 878,948 | 201,018 |
Weighted Average Exercise Price (in dollars per share) | $ 7.46 | $ 5.38 |
Exercise Price - 4.05 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 4.05 | $ 4.05 |
Options Outstanding | ||
Options Outstanding (in shares) | 4,639 | 4,928 |
Weighted Average Remaining Contractual Life | 3 years 5 months 9 days | 4 years 5 months 9 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.05 | $ 4.05 |
Options Vested | ||
Number Exercisable (in shares) | 4,639 | 3,961 |
Weighted Average Exercise Price (in dollars per share) | $ 4.05 | $ 4.05 |
Exercise Price - 4.50 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 4.50 | $ 4.50 |
Options Outstanding | ||
Options Outstanding (in shares) | 1,762,279 | 1,874,150 |
Weighted Average Remaining Contractual Life | 9 years 4 days | 10 years |
Weighted Average Exercise Price (in dollars per share) | $ 4.50 | $ 4.50 |
Options Vested | ||
Number Exercisable (in shares) | 436,947 | |
Weighted Average Exercise Price (in dollars per share) | $ 4.50 | 4.50 |
Exercise Price - 4.95 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 4.95 | $ 4.95 |
Options Outstanding | ||
Options Outstanding (in shares) | 862,999 | 863,221 |
Weighted Average Remaining Contractual Life | 8 years 10 months 13 days | 9 years 10 months 13 days |
Weighted Average Exercise Price (in dollars per share) | $ 4.95 | $ 4.95 |
Options Vested | ||
Number Exercisable (in shares) | 234,311 | 24,971 |
Weighted Average Exercise Price (in dollars per share) | $ 4.95 | $ 4.95 |
Exercise Price - 10.91 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 10.91 | |
Options Outstanding | ||
Options Outstanding (in shares) | 25,222 | |
Weighted Average Remaining Contractual Life | 9 years 2 months 5 days | |
Weighted Average Exercise Price (in dollars per share) | $ 10.91 | |
Options Vested | ||
Weighted Average Exercise Price (in dollars per share) | 10.91 | |
Exercise Price - 10.98 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 10.98 | |
Options Outstanding | ||
Options Outstanding (in shares) | 4,000 | |
Weighted Average Remaining Contractual Life | 9 years 4 months 2 days | |
Weighted Average Exercise Price (in dollars per share) | $ 10.98 | |
Options Vested | ||
Weighted Average Exercise Price (in dollars per share) | 10.98 | |
Exercise Price - 12.60 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 12.60 | $ 12.60 |
Options Outstanding | ||
Options Outstanding (in shares) | 68,150 | 72,593 |
Weighted Average Remaining Contractual Life | 5 years 6 months 18 days | 6 years 6 months 11 days |
Weighted Average Exercise Price (in dollars per share) | $ 12.60 | $ 12.60 |
Options Vested | ||
Number Exercisable (in shares) | 68,150 | 70,026 |
Weighted Average Exercise Price (in dollars per share) | $ 12.60 | $ 12.60 |
Exercise Price - 14.85 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 14.85 | $ 14.85 |
Options Outstanding | ||
Options Outstanding (in shares) | 44,851 | 51,549 |
Weighted Average Remaining Contractual Life | 6 years 15 days | 7 years 22 days |
Weighted Average Exercise Price (in dollars per share) | $ 14.85 | $ 14.85 |
Options Vested | ||
Number Exercisable (in shares) | 44,052 | 38,609 |
Weighted Average Exercise Price (in dollars per share) | $ 14.85 | $ 14.85 |
Exercise Price - 15.21 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 15.21 | |
Options Outstanding | ||
Options Outstanding (in shares) | 98,044 | |
Weighted Average Remaining Contractual Life | 9 years 7 months 2 days | |
Weighted Average Exercise Price (in dollars per share) | $ 15.21 | |
Options Vested | ||
Weighted Average Exercise Price (in dollars per share) | 15.21 | |
Exercise Price - 19.61 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 19.61 | |
Options Outstanding | ||
Options Outstanding (in shares) | 353,075 | |
Weighted Average Remaining Contractual Life | 9 years 11 months 19 days | |
Weighted Average Exercise Price (in dollars per share) | $ 19.61 | |
Options Vested | ||
Weighted Average Exercise Price (in dollars per share) | 19.61 | |
Exercise Price - 20.25 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 20.25 | $ 20.25 |
Options Outstanding | ||
Options Outstanding (in shares) | 96,905 | 105,879 |
Weighted Average Remaining Contractual Life | 7 years 6 months 11 days | 8 years 6 months 11 days |
Weighted Average Exercise Price (in dollars per share) | $ 20.25 | $ 20.25 |
Options Vested | ||
Number Exercisable (in shares) | 63,150 | 44,254 |
Weighted Average Exercise Price (in dollars per share) | $ 20.25 | $ 20.25 |
Exercise Price - 22.05 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 22.05 | $ 22.05 |
Options Outstanding | ||
Options Outstanding (in shares) | 7,929 | 9,165 |
Weighted Average Remaining Contractual Life | 6 years 9 months 4 days | 7 years 9 months 7 days |
Weighted Average Exercise Price (in dollars per share) | $ 22.05 | $ 22.05 |
Options Vested | ||
Number Exercisable (in shares) | 6,635 | 5,355 |
Weighted Average Exercise Price (in dollars per share) | $ 22.05 | $ 22.05 |
Exercise Price - 22.50 | ||
Stock options | ||
Exercise price (in dollars per share) | $ 22.50 | $ 22.50 |
Options Outstanding | ||
Options Outstanding (in shares) | 28,888 | 28,888 |
Weighted Average Remaining Contractual Life | 6 years 6 months 26 days | 8 years 4 months 2 days |
Weighted Average Exercise Price (in dollars per share) | $ 22.50 | $ 22.50 |
Options Vested | ||
Number Exercisable (in shares) | 21,064 | 13,842 |
Weighted Average Exercise Price (in dollars per share) | $ 22.50 | $ 22.50 |
Stockholders' Equity (Deficit70
Stockholders' Equity (Deficit) - ESPP (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2015 | |
Stock Plan | ||||
Stock-based compensation expense | $ 5,899,000 | $ 641,000 | $ 654,000 | |
2015 Employee Stock Purchase Plan | ||||
Stock Plan | ||||
Maximum portion of eligible compensation employees may use to purchase common stock under the plan (as a percent) | 20.00% | |||
Shares reserved for issuance | 500,000 | |||
Maximum annual increase in shares available for issuance (in shares) | 493,000 | |||
Maximum annual increase in shares available for issuance, percentage of outstanding shares | 1.50% | |||
Exercise price as percentage of fair market value of shares | 85.00% | |||
Number of shares issued under the plan | 32,000 | |||
Common stock remaining reserved for issuance (in shares) | 468,000 | |||
Stock-based compensation expense | $ 217,000 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Stock-based compensation expense | |||
Total stock-based compensation expense | $ 5,899,000 | $ 641,000 | $ 654,000 |
Employee stock options | |||
Valuation model average assumptions | |||
Expected term (years) | 6 years 3 months 18 days | 6 years 3 months 18 days | 6 years 10 months 24 days |
Expected volatility | 49.80% | 59.10% | 52.10% |
Risk-free interest rate | 1.80% | 1.80% | 1.40% |
Unamortized compensation | |||
Total unamortized compensation expense | $ 16,871,000 | $ 18,938,000 | |
Expected amortization period | 3 years 11 months 1 day | 2 years 8 months 12 days | |
2015 Employee Stock Purchase Plan | |||
Valuation model average assumptions | |||
Expected term (years) | 6 months | ||
Expected volatility | 46.20% | ||
Risk-free interest rate | 0.17% | ||
Stock-based compensation expense | |||
Total stock-based compensation expense | $ 217,000 | ||
Restricted stock units | |||
Share-based compensation | |||
Total fair value of shares vested in the year | 0 | ||
Unamortized compensation | |||
Total unamortized compensation expense | $ 1,806,000 | ||
Expected amortization period | 3 years 10 months 17 days | ||
Cost of revenues | |||
Stock-based compensation expense | |||
Total stock-based compensation expense | $ 346,000 | $ 55,000 | $ 62,000 |
Research and development expenses | |||
Stock-based compensation expense | |||
Total stock-based compensation expense | 2,489,000 | 155,000 | 165,000 |
Selling, general and administrative expenses | |||
Stock-based compensation expense | |||
Total stock-based compensation expense | $ 3,064,000 | $ 431,000 | $ 427,000 |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Reconciliation of the statutory U.S. federal rate to the Company's effective tax rate | |||
Tax at federal statutory rate | $ (16,905) | $ (10,863) | $ (13,563) |
State taxes, net of federal benefit | 14 | 11 | |
Permanent differences | 1,722 | 730 | 298 |
Change in valuation allowance | 15,250 | 10,316 | 13,450 |
Research credits | (218) | (219) | (179) |
Other | $ 151 | 36 | (6) |
Provision for taxes | $ 14 | $ 11 |
Income Taxes - Deferred Tax Ass
Income Taxes - Deferred Tax Assets (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes | |||
Increase in valuation allowance | $ 15,076,000 | $ 12,193,000 | $ 15,927,000 |
Deferred tax assets: | |||
Federal, state, and foreign net operating losses | 64,739,000 | 52,433,000 | |
Research and other credits | 2,521,000 | 2,157,000 | |
Fixed assets | 215,000 | 58,000 | |
Interest | 899,000 | 255,000 | |
Other | 2,810,000 | 1,205,000 | |
Total deferred tax assets | 71,184,000 | 56,108,000 | |
Less: Valuation allowance | $ (71,184,000) | $ (56,108,000) |
Income Taxes - Operating Loss C
Income Taxes - Operating Loss Carryforwards (Details) | Dec. 31, 2015USD ($) |
Federal | |
Operating Loss Carryforwards | |
Operating loss carryforwards | $ 171,199,000 |
State | |
Operating Loss Carryforwards | |
Operating loss carryforwards | $ 161,235,000 |
Income Taxes - Tax Credit Carry
Income Taxes - Tax Credit Carryforwards (Details) - Research and development | Dec. 31, 2015USD ($) |
Federal | |
Tax Credit Carryforward | |
Credit carryforwards | $ 2,118,000 |
State | |
Tax Credit Carryforward | |
Credit carryforwards | $ 2,247,000 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Income Taxes | |||
Unrecognized tax benefits that would affect the effective tax rate if recognized | $ 2,792,000 | $ 924,000 | |
Reconciliation of unrecognized tax benefits | |||
Balance at beginning of year | 1,121,000 | 919,000 | $ 592,000 |
Additions based on tax positions related to current year | 2,593,000 | 202,000 | 165,000 |
Additions for tax positions of prior years | 188,000 | 162,000 | |
Balance at end of year | $ 3,902,000 | $ 1,121,000 | $ 919,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 10 Months Ended | 12 Months Ended | |||
Jul. 31, 2014 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Related Party Transaction | |||||
Total aggregate principal amount of notes issued | $ 4,700,000 | $ 13,399,000 | |||
Common Stock Warrants issued with Convertible Notes | |||||
Related Party Transaction | |||||
Exercise price of warrants issued (in dollars per share) | $ 12.60 | $ 12.60 | |||
Convertible Notes | |||||
Related Party Transaction | |||||
Total aggregate principal amount of notes issued | $ 18,192,000 | ||||
Related-party portion of convertible notes issuance | Convertible Notes | |||||
Related Party Transaction | |||||
Issuance of principal amount considered a related-party transaction | $ 5,122,000 | ||||
Carrying value of related-party convertible notes | 2,793,000 | ||||
Interest expense related to related-party debt | $ 388,000 | 1,021,000 | 140,000 | ||
JBS Consulting | Private plane service | |||||
Related Party Transaction | |||||
Amount of services provided by related party | 0 | 0 | 568,000 | ||
Recreation, Inc. | |||||
Related Party Transaction | |||||
Amounts due to related party | 76,000 | 298,000 | |||
Recreation, Inc. | Marketing services | |||||
Related Party Transaction | |||||
Amount of services provided by related party | 1,016,000 | 984,000 | 107,000 | ||
Baysinger | Recruiting services | |||||
Related Party Transaction | |||||
Amount of services provided by related party | 0 | $ 0 | $ 146,000 | ||
Chansu | Consulting services related to regulatory affairs | |||||
Related Party Transaction | |||||
Amount of services provided by related party | 17,000 | ||||
Amounts due to related party | $ 0 |
401(k) Plan (Details)
401(k) Plan (Details) - 401(k) Plan - USD ($) | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
401(k) Plan | |||
Maximum percentage of eligible compensation participants may contribute | 90.00% | ||
Vesting period for employer contributions | 4 years | ||
Contributions | $ 0 | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Feb. 03, 2016 | Mar. 31, 2016 | Jan. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Subsequent Events | |||||
Increase in number of shares authorized for issuance | 1,320,000 | 2,574,795 | |||
Lease payment obligation over the term of the amended agreement | $ 1,060,000 | ||||
Subsequent Event | Facility lease | |||||
Subsequent Events | |||||
Extension of lease term | 3 years | ||||
Lease payment obligation over the term of the amended agreement | $ 5,738,000 | ||||
Subsequent Event | Sales Agreement with Cowen | |||||
Subsequent Events | |||||
Maximum aggregate value of common stock to be issued under sales agreement | $ 50,000,000 | ||||
Sales agent's commission on gross proceeds (as a percent) | 3.00% | ||||
Subsequent Event | 2015 Employee Stock Purchase Plan | |||||
Subsequent Events | |||||
Increase in number of shares authorized for issuance | 189,653 | ||||
Subsequent Event | 2015 Plan | |||||
Subsequent Events | |||||
Increase in number of shares authorized for issuance | 631,176 |
Selected Quarterly Financial 80
Selected Quarterly Financial Information (Unaudited) (Details) $ / shares in Units, $ in Thousands | Jan. 14, 2015 | Dec. 31, 2015USD ($)$ / shares | Sep. 30, 2015USD ($)$ / shares | Jun. 30, 2015USD ($)$ / shares | Mar. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Sep. 30, 2014USD ($)$ / shares | Jun. 30, 2014USD ($)$ / shares | Mar. 31, 2014USD ($)$ / shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($)$ / shares | Dec. 31, 2013USD ($)$ / shares |
Selected Quarterly Financial Information (Unaudited) | ||||||||||||
Reverse stock split ratio | 0.022 | |||||||||||
Revenues | $ 2,857 | $ 2,721 | $ 3,047 | $ 2,088 | $ 3,073 | $ 2,632 | $ 3,389 | $ 2,119 | $ 10,713 | $ 11,213 | $ 12,964 | |
Gross profit | 1,051 | 971 | 1,413 | 800 | 1,502 | 1,161 | 1,421 | 616 | 4,235 | 4,700 | 4,759 | |
Operating expenses | 13,357 | 10,847 | 10,496 | 10,225 | 8,477 | 7,306 | 6,949 | 6,995 | 44,925 | 29,727 | 41,731 | |
Net loss | $ (13,456) | $ (13,250) | $ (10,220) | $ (12,801) | $ (8,135) | $ (8,780) | $ (7,078) | $ (7,971) | $ (47,344) | $ (31,964) | $ (39,901) | |
Net loss attributable to common stockholders per share, basic and diluted (in dollars per share) | $ / shares | $ (1.07) | $ (1.08) | $ (0.83) | $ (1.53) | $ (33.62) | $ (36.43) | $ (29.37) | $ (33.21) | $ (4.38) | $ (132.63) | $ (170.52) |
Financial Statement Schedules (
Financial Statement Schedules (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for doubtful accounts receivable | |||
Balance at Beginning of Year | $ 20 | $ 20 | $ 54 |
Charged to costs and expenses | 45 | ||
Write offs | 79 | ||
Balance at End of Year | 20 | 20 | 20 |
Allowance for sales returns | |||
Balance at Beginning of Year | 77 | 88 | 235 |
Charged to costs and expenses | 37 | 135 | 310 |
Write offs | 55 | 146 | 457 |
Balance at End of Year | $ 59 | $ 77 | $ 88 |