Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 05, 2019 | Jun. 30, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Semler Scientific, Inc. | ||
Entity Central Index Key | 1,554,859 | ||
Trading Symbol | smlr | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well Known Seasoned Issuer | No | ||
Entity Common Stock Shares Outstanding | 6,324,985 | ||
Entity Public Float | $ 73,633,896.60 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2,018 | ||
Document Fiscal Period Focus | FY | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Shell Company | false |
Balance Sheets
Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current Assets: | ||
Cash | $ 3,284 | $ 1,457 |
Trade accounts receivable, net of allowance for doubtful accounts of $52 and $35 respectively | 2,801 | 1,315 |
Prepaid expenses and other current assets | 153 | 111 |
Total current assets | 6,238 | 2,883 |
Assets for lease, net | 1,243 | 1,147 |
Property and equipment, net | 223 | 193 |
Long-term deposits | 15 | 15 |
Total assets | 7,719 | 4,238 |
Current liabilities: | ||
Accounts payable | 280 | 488 |
Accrued expenses | 2,797 | 2,670 |
Deferred revenue | 435 | 531 |
Accrued interest, current portion | 196 | |
Loans payable, current portion net of debt discount of $0 and $9, respectively | 1,018 | |
Related party loan payable, current portion net of debt discount of $0 and $13, respectively | 237 | |
Total current liabilities | 3,512 | 5,140 |
Long-term liabilities: | ||
Deferred rent | 11 | 13 |
Loans payable net of debt discount of $0 and $0, respectively | 26 | |
Related party loan payable net of debt discount of $0 and $0, respectively | 1,642 | |
Total long-term liabilities | 11 | 1,681 |
Stockholders' equity (deficit): | ||
Common stock, $0.001 par value; 50,000,000 shares authorized; 6,349,985, and 5,902,244 shares issued, and 6,324,985 and 5,877,244 shares outstanding (treasury shares of 25,000 and 25,000, respectively) | 6 | 6 |
Additional paid-in capital | 25,608 | 23,843 |
Accumulated deficit | (21,418) | (26,432) |
Total stockholders' equity (deficit) | 4,196 | (2,583) |
Total liabilities and stockholders' equity (deficit) | $ 7,719 | $ 4,238 |
Balance Sheets (Parentheticals)
Balance Sheets (Parentheticals) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts on trade accounts receivable (in dollars) | $ 52 | $ 35 |
Debt discount on current portion of Loans payable | 0 | 9 |
Debt discount on current portion of Related party loan payable | 0 | 13 |
Debt discount on Loans payable | 0 | 0 |
Debt discount on related party loan payable | $ 0 | $ 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 6,349,985 | 5,902,244 |
Common stock, shares outstanding | 6,324,985 | 5,877,244 |
Treasury stock, shares | 25,000 | 25,000 |
Statements of Operations
Statements of Operations - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 21,491 | $ 12,452 |
Operating expenses: | ||
Cost of revenues | 2,703 | 2,553 |
Engineering and product development | 2,085 | 1,831 |
Sales and marketing | 7,202 | 5,078 |
General and administrative | 4,159 | 3,843 |
Total operating expenses | 16,149 | 13,305 |
Income (loss) from operations | 5,342 | (853) |
Interest expense | (59) | (231) |
Related party interest expense | (239) | (233) |
Loss on extinguishment of loans | (179) | |
Other expense | (4) | (5) |
Other expense | (302) | (648) |
Pre-tax net income (loss) | 5,040 | (1,501) |
Provision for taxes | (26) | (9) |
Net income (loss) | $ 5,014 | $ (1,510) |
Net income (loss) per share, basic (in dollars per share) | $ 0.82 | $ (0.28) |
Weighted average number of shares used in computing basic income (loss) per share (in shares) | 6,079,326 | 5,405,388 |
Net income (loss) per share, diluted (in dollars per share) | $ 0.66 | $ (0.28) |
Weighted average number of shares used in computing diluted income (loss) per share (in shares) | 7,629,523 | 5,405,388 |
Statements of Stockholders' Equ
Statements of Stockholders' Equity (Deficit) - USD ($) $ in Thousands | Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balance at Dec. 31, 2016 | $ 5 | $ 21,998 | $ (24,922) | $ (2,919) | |
Balance (in shares) at Dec. 31, 2016 | 5,148,568 | (25,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Private Placement | 475 | 475 | |||
Private Placement (in shares) | 190,000 | ||||
Warrant Fair Values | 289 | 289 | |||
Warrant Exercises | $ 1 | 632 | 633 | ||
Warrant Exercises (in shares) | 358,676 | ||||
Stock Option Exercise | 106 | $ 106 | |||
Stock Option Exercise (in shares) | 205,000 | 205,000 | |||
Stock-based Compensation | 343 | $ 343 | |||
Net loss | (1,510) | (1,510) | |||
Balance at Dec. 31, 2017 | $ 6 | 23,843 | (26,432) | (2,583) | |
Balance (in shares) at Dec. 31, 2017 | 5,902,244 | (25,000) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of Shares to Settle Related Party Loan | 294 | 294 | |||
Issuance of Shares to Settle Related Party Loan (in shares) | 12,943 | ||||
Warrant Exercises | 414 | 414 | |||
Warrant Exercises (in shares) | 212,517 | ||||
Stock Option Exercise | 456 | $ 456 | |||
Stock Option Exercise (in shares) | 222,281 | 222,281 | |||
Stock-based Compensation | 601 | $ 601 | |||
Net loss | 5,014 | 5,014 | |||
Balance at Dec. 31, 2018 | $ 6 | $ 25,608 | $ (21,418) | $ 4,196 | |
Balance (in shares) at Dec. 31, 2018 | 6,349,985 | (25,000) |
Statements of Cash Flows
Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income (loss) | $ 5,014 | $ (1,510) |
Reconciliation of Net Income (Loss) to Net Cash Provided by Operating Activities: | ||
Amortization of debt discount | 22 | 156 |
Accretion of non-cash interest | 231 | 174 |
Loss on extinguishment of debt | 179 | |
Depreciation | 503 | 559 |
Loss on impairment of fixed assets | 251 | |
Loss on disposal of assets for lease | 200 | 247 |
Allowance for doubtful accounts | 46 | 41 |
Stock-based compensation expense | 601 | 343 |
Changes in Operating Assets and Liabilities: | ||
Trade accounts receivable | (1,503) | (479) |
Prepaid expenses and other current assets | (42) | (18) |
Accounts payable | (208) | 38 |
Accrued expenses | (71) | 624 |
Deferred revenue | (96) | 16 |
Net Cash Provided by Operating Activities | 4,697 | 621 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Additions to property and equipment | (138) | (47) |
Proceeds from sale of property and equipment | 1 | 3 |
Purchase of assets for lease | (706) | (924) |
Net Cash Used in Investing Activities | (843) | (968) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of common stock | 475 | |
Proceeds from exercise of warrants | 414 | 633 |
Proceeds from exercise of stock options | 456 | 106 |
Proceeds from loans payable | 112 | |
Payments of loans payable | (2,897) | (144) |
Net Cash (Used in) Provided by Financing Activities | (2,027) | 1,182 |
INCREASE IN CASH | 1,827 | 835 |
CASH, BEGINNING OF PERIOD | 1,457 | 622 |
CASH, END OF PERIOD | 3,284 | 1,457 |
Cash paid for interest | 575 | 13 |
Supplemental disclosure of noncash financing activity: | ||
Issuance of shares to settle related party loan | $ 294 | |
Reclassification of accrued interest to debt upon extinguishment | 162 | |
Fair value of warrants issued to lenders | $ 289 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2018 | |
Company [Abstract] | |
The Company | 1. The Company Semler Scientific, Inc. (the “Company”) was incorporated in the State of Oregon on August 9, 2007, established C-corporation status in 2012, and reincorporated as a Delaware corporation during 2013. The Company is an emerging growth company providing technology solutions to improve the clinical effectiveness and efficiency of healthcare providers. In 2011, the Company began commercializing its first patented and U.S. Food and Drug Administration (“FDA”) cleared product, which measured arterial blood flow in the extremities to aid in the diagnosis of peripheral arterial disease (“PAD”). In March 2015, the Company received FDA 510(k) clearance for the next generation version of its product, QuantaFlo™, which the Company commercially launched in August 2015. The Company has one operating segment and generates revenues domestically primarily through direct licensing to direct customers. The Company is based in San Jose, California. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Estimates | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Estimates | 2. Summary of Significant Accounting Policies and Estimates Basis for Presentation The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, deferred tax asset valuation allowance, stock-based compensation and valuation of warrants. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. Revenue Recognition The Company generates revenues primarily from the rental or license of its vascular testing product, or providing diagnostic testing service to its customers. The Company recognizes revenues from the licensing of its vascular testing product pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement. The Company recognizes revenues for providing diagnostic testing services on a per test basis to customers, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for doubtful accounts by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. Assets for Lease Assets for lease are recorded at cost. At December 31, 2018 and 2017, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2018 and 2017, there were no impairment indicators. Property and Equipment Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as cost of revenues for WellChec™ capital assets and depreciation for all other capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses. At December 31, 2018 and 2017, capital assets are classified into one of the following categories: Category Name Description Machinery & Equipment Manufacturing, R&D, or other non-office equipment Computer Equipment & Software Software, computers, monitors, printers and other related equipment. Furniture & Fixtures Office equipment and furniture owned by the company At December 31, 2018 and 2017, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2017, there was an impairment of the fixed assets used in the WellChec™ business. As a result, the Company recorded an impairment of $251 of WellChec™ equipment during that period. No impairment was recorded during the year ended December 31, 2018. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, are described as follows: Level 1 Level 2 Level 3 The financial instruments of the Company consist primarily of cash, accounts receivable, accounts payable, and loans payable. The carrying amounts of these items are considered a reasonable estimate of fair value at December 31, 2018 and 2017 due to their short-term nature and their market interest rates. Deferred Revenue Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice. Debt Discounts In 2016, the Company secured promissory notes from various accredited investors. These accredited investors were given the opportunity to purchase fully vested warrants exercisable for common stock, which were determined to have a fair value of $407 at issuance which was recorded as debt discount. These debt discounts are being amortized to interest expense over the two-year life of the loan. The Company recognized $22 and $156 of interest expense associated with these discounts in 2018 and 2017, respectively. See Note 7. Research and Development The Company expenses costs related to the research and development associated with the design, development, testing and enhancement of its products and services. Such expenses include salaries and related employee benefits, and fees paid to external service providers. Stock-Based Compensation Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense for the portion of each option grant or stock award that is expected to vest over the estimated period of service and vesting. The Company uses the Black-Scholes option pricing model as the method for determining the estimated grant-date fair value of stock options. The Black-Scholes option pricing model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected volatility. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the grant. Employee Benefit Plan The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). There were no matching or discretionary employer contributions made to this plan during the years ended December 31, 2018 and 2017. Income Taxes The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax bases of existing assets and liabilities and net operating loss (“NOL”) carry forwards, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. The U.S. Tax Cuts & Jobs Act of 2017 reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. In addition, NOLs generated after December 31, 2017 are carried forward indefinitely with yearly NOL utilization limited to 80% of taxable income. A valuation allowance is recorded for loss carry-forwards and other deferred tax assets where it is more likely than not that such loss carry-forward and deferred tax assets will not be realized. The estimate for the valuation allowance for deferred tax assets requires management to make significant estimates and judgments about projected future operating results. If actual results differ from these projections or if management’s expectations of future results change, it may be necessary to adjust the valuation allowance Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2015, the FASB issued Accounting Standard Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes, to reduce complexity and simplify the reporting of deferred income tax liabilities and assets. The amendments in this update require that all deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendment of this update. This standard is effective for the Company’s annual periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018, with earlier application permitted. The Company adopted the new standard in the first quarter of 2018. The Company maintained a full valuation allowance on all deferred tax balances in 2017 and 2018, and therefore, the adoption of this standard does not have a material impact on its financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718) — Scope of Modification Accounting. This ASU requires modification accounting for a change in terms or conditions of a share-based payment award only if the fair value, the vesting condition, or the classification of the award (as liability or equity) changes as a result of the changes in terms or conditions. The amendments, which are to be applied prospectively to modifications after adoption, are effective for the Company’s annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted the new standard in the first quarter of 2018 and it did not have a material effect on the Company’s financial position or results of operations. Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU No. 2014-09”). The amendment in this ASU provides guidance on the revenue recognition to depict the transfer of 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. The core principle of this update provides guidance to identify the performance obligations under the contract(s) with a customer and how to allocate the transaction price to the performance obligations in the contract. It further provides guidance to recognize revenue when (or as) the entity satisfies a performance obligation. This standard will replace most existing revenue recognition guidance. On August 8, 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU No. 2014-09 by one year, and permits early adoption as long as the adoption date is not before the original public entity effective date. This standard is effective for the Company’s year ending December 31, 2019 with early adoption permitted for the year ended December 31, 2017. Since the issuance of ASU 2014-09, the FASB has issued several amendments that clarify certain points, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force Meeting, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606. The updated revenue standard allows two methods of adoption: (1) retrospectively to each prior period presented (“full retrospective method”), or (2) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). The new standard further requires new disclosures about contracts with customers, including the significant judgments the company has made when applying the guidance. The Company adopted the new standard effective January 1, 2019, using the modified retrospective transition method. The Company determined the adoption of this standard will not have an impact on its financial statements. In January 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Under the new guidance in ASU No. 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged, however, certain targeted improvements were made. ASU No. 2016-02 also simplifies the accounting for sale and leaseback transactions. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees and lessors may not apply a full retrospective transition approach. The new standard also requires expanded disclosures regarding leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. This ASU provides another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. This ASU also provides further guidance on lessors accounting policy election to not separate non-lease components from the associated lease components and limits this to circumstances in which the non-lease component or components otherwise would be accounted for under the new revenue guidance and both (1) the timing and pattern of transfer are the same for the non-lease component(s) and associated lease component, and (2) the lease component, if accounted for separately, would be classified as a an operating lease. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provide narrow scope improvements for lessor accounting by permitting lessors, as an accounting policy election, to treat certain sales taxes and other similar taxes as lessee costs, to exclude lessor costs paid by lessees directly to third parties from variable payments, and clarify the accounting by lessors for variable payments that related to both a lease component and a nonlease component. This update is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company is currently evaluating the impact that this new standard will have on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This ASU requires timelier recording of credit losses on loans and other financial instruments held. Instead of reserves based on a current probability analysis, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. All organizations will now use forward-looking information to better inform their credit loss estimates. ASU 2016-13 requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide information about the amounts recorded in the financial statements. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. This standard is effective for the Company’s fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. . The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company is currently evaluating the effect the new standard will have on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of costs. The ASU specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company is currently evaluating the impact that this new standard will have on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU modify the disclosure requirements on fair value measurements removing the requirements to disclosure amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. In addition, it modified certain disclosures related to Level 3 fair value measurements and added additional disclosures regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period. This update is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this update to have a material impact on its financial statements. |
Assets for Lease, net
Assets for Lease, net | 12 Months Ended |
Dec. 31, 2018 | |
Leases, Capital [Abstract] | |
Assets for Lease, net | 3. Assets for Lease, net Assets for lease consist of the following: As of December 31, 2018 2017 Assets for lease $ 2,218 $ 1,847 Less: accumulated depreciation (975 ) (700 ) Assets for lease, net $ 1,243 $ 1,147 Depreciation expense amounted to $395 and $367 for the years ended December 31, 2018 and 2017, respectively. Reduction to accumulated depreciation for returned items was $120 and $152 for the years ended December 31, 2018 and December 31, 2017, respectively. The Company recognized a loss on disposal of assets for lease in the amount of $200 and $247 for the years ended December 31, 2018 and 2017, respectively. |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | 4. Property and Equipment, net Capital assets consist of the following: As of December 31, 2018 2017 Capital assets $ 457 $ 322 Less: accumulated depreciation (234 ) (129 ) Capital assets, net $ 223 $ 193 Depreciation expense amounted to $108 and $192 for the years ended December 31, 2018 and 2017, respectively. In addition to depreciation expense, the Company recorded an impairment on fixed assets purchased for its WellChec™ business of $251 for the year ended December 31, 2017. Associated with this impairment to operating expenses, there was a reduction to accumulated depreciation of $233 and a reduction to capital assets of $484 for the year ended December 31, 2017. There was no impairment recorded for the year ended December 31, 2018. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Accrued expenses | 5. Accrued Expenses Accrued expenses consist of the following: As of December 31, 2018 2017 Compensation $ 2,442 $ 2,275 Board of Director Fees 15 148 Miscellaneous Accruals 340 247 Total Accrued Expenses $ 2,797 $ 2,670 Three employees, including the Chief Executive Officer (“CEO”), agreed to further defer amounts accrued to them as of December 31, 2017. The Company agreed to further delay and continue to accrue these amounts and increase the balance owed by 1% per month beginning January 1, 2017 to no later than January 31, 2019. All of these amounts were paid as of December 31, 2018. Two members of the Company’s board of directors have agreed to further defer fees earned from August 2016 to July 2017. The Company agreed to further delay and continue to accrue these amounts and increase the balance owed by 1% per month beginning January 1, 2018 to no later than January 1, 2019. All of these amounts were paid as of December 31, 2018. |
Concentration of Credit Risk
Concentration of Credit Risk | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentration of Credit Risk | 6. Concentration of Credit Risk Credit risk is the risk of loss from amounts owed by the financial counterparties. Credit risk can occur at multiple levels; as a result of broad economic conditions, challenges within specific sectors of the economy, or from issues affecting individual companies. Financial instruments that potentially subject the Company to credit risk consist of cash and accounts receivable. The Company maintains cash with major financial institutions. The Company’s cash consists of bank deposits held with banks that, at times, exceed federally insured limits. The Company limits its credit risk by dealing with counterparties that are considered to be of high credit quality and by performing periodic evaluations of the relative credit standing of these financial institutions. Management periodically monitors the creditworthiness of its customers and believes that it has adequately provided for any exposure to potential credit loss. For the year ended December 31, 2017, two customers accounted for 55.0% and 11.1% of the Company’s revenue. For the year ended December 31, 2018, two customers accounted for 52.5% and 19.5% of the Company’s revenue. As of December 31, 2017, two customers accounted for 56.6% and 23.9% of the Company’s accounts receivable, respectively. As of December 31, 2018, two customers accounted for 43.5% and 40.4% of the Company’s accounts receivable, respectively. As of December 31, 2018 and 2017 the allowance for doubtful accounts was $52 and $35, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies Facilities Leases The Company recognized facilities lease expenses of $69 and $67 for the years ended December 31, 2018 and 2017, respectively. On September 23, 2014, the Company entered into a 36-month lease agreement for office space for the sales and marketing team located in Menlo Park, CA. The lease term commenced February 1, 2015 and is effective through January 31, 2018. Payments required under the terms of the lease are $17.0 per month from February 2015 to January 2016, $17.5 per month from February 2016 to January 2017, and $18.0 per month from February 2017 to January 2018. The lease came to an end in January 2018 and the Company anticipates zero total future lease payments. On July 15, 2015, the Company entered into a 30-month sublease agreement for the Menlo Park office space, which commenced August 1, 2015 and is effective through the term of the lease, January 31, 2018. Payments required to the Company under the terms of the sublease are $15.5 per month from August 2015 to July 2016, $16.0 per month from August 2016 to July 2017, and $16.5 per month from August 2017 to January 2018. The sublease came to an end in January 2018 and the Company anticipates receipt of zero future sublease payments. Loans Payable December 31, 2018 December 31, 2017 Lender Long-term Short-term Long-term Short-term Loans from Related Parties Chang Family Trust 1,126 Chang Family Trust 516 Glenhill Concentrated Long Master Fund, LLC 250 Other Loans Accredited Investor 700 Accredited Investor 160 Accredited Investor 80 Ascentium Capital, LLC 24 Ascentium Capital, LLC 16 26 Royal Bank America Leasing, L.P. 26 Ascentium Capital, LLC 10 11 Total — — 1,668 1,277 Debt Discounts — — — (22 ) Total, net of debt discounts — — 1,668 1,255 Loans from Related Parties On January 15, 2016, the Company entered into a loan agreement with the Chang Family Trust, one of its significant stockholders, is co-trustee. Pursuant to the loan agreement, the Company obtained a $1,000 unsecured loan, which initially had a 24-month term, at a fixed interest rate of 10% per annum. Under the loan agreement, the Company will pay $1,000 of principal plus all accrued and unpaid interest at maturity. The Company may prepay the notes at any time prior to maturity without penalty. The notes must be repaid prior to maturity in the event of default, and the Company agreed not to incur additional indebtedness in excess of $50 without the lender’s prior consent, which is not to be unreasonably withheld. In connection therewith, the Company issued the Chang Family Trust a two-year warrant to purchase 114,286 shares of its common stock at an exercise price of $1.75 per share. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were exercised in full in December 2017 and are no longer outstanding. On January 21, 2016, the Company entered into a second loan agreement with the Chang Family Trust. Pursuant to this loan agreement, the Company obtained a $500 unsecured loan, which initially had a 24-month term at a fixed interest rate of 5% per annum. Under this loan agreement, the Company will pay $500 of principal plus all accrued and unpaid interest at maturity. The Company may prepay the notes at any time prior to maturity without penalty. The notes must be repaid prior to maturity in the event of default, and the Company agreed not to incur additional indebtedness in excess of $50 without the lender’s prior consent, which is not to be unreasonably withheld. In connection therewith, the Company issued the Chang Family Trust a two-year warrant to purchase 114,286 shares of its common stock at an exercise price of $1.75 per share. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were exercised in full in December 2017 and are no longer outstanding. On May 2, 2017, the Company entered into an amendment regarding the outstanding promissory notes and warrants issued in January 2016 to the Chang Family Trust. As amended, the maturity date for each note has now been extended by 12 months to January 2019, and the interest rate on the $500 note has been increased to 10.0% per annum for the final 12 months of its term. In each case, interest will accrue on the unpaid principal and accrued interest as of the original two-year maturity date in the final year term of the notes. The other terms of the notes remain unchanged. Additionally, as issued, the warrants were not exercisable, absent receipt of stockholder approval, if after such exercise the holder would be the beneficial owner of more than 19.99% of the Company’s common stock. This condition was removed by the amendments, and accordingly, stockholder approval is no longer required. In connection with the foregoing amendment, the Company issued the Chang Family Trust a warrant to purchase 134,616 shares of its common stock at an exercise price of $2.60 per share. In accordance with FASB ASC 815, these warrants were classified within permanent equity. The warrant expires January 21, 2022, three years after the latest maturity date of the promissory notes, as amended. As part of the amendment, the fair value of the warrants are considered in the calculation when determining whether an amendment resulted in a modification or extinguishment of the original loans and in accordance with FASB ASC 470, the Company recorded the amendment as an extinguishment of the original loans which resulted in a loss on extinguishment of $179 as recorded in the statements of operations. In October 2018, the Company paid in full the outstanding loans having an aggregate principal amount of $1,500 held by the Chang Family Trust that were originally issued in January 2016 and amended in May 2017. The Chang Family Trust exercised the warrants in full in October 2018 and they are no longer outstanding. On November 21, 2016, the Company entered into a loan agreement with Glenn Krevlin, an affiliate of a significant stockholder at such time. Pursuant to the loan agreement, the Company obtained a $250 unsecured loan for a 24-month term at a fixed interest rate of 10% per annum. Under the loan agreement, the Company will pay $250 of principal plus all accrued but unpaid interest at maturity. The notes may be prepaid at any time prior to maturity without penalty. The notes must be repaid prior to maturity in the event of default. In connection therewith, the Company issued the accredited investor a two-year warrant to purchase 28,378 shares of common stock at an exercise price of $1.85 per share. The warrants were not able to be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 9.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were exercised in full in January 2018. In August 2018, the Company paid the entire principal amount of the loan and accrued interest totaling $294,000 through the issuance of 12,943 shares of its common stock. Other Loans On March 31, 2016, the Company entered into a loan agreement with an accredited investor. Pursuant to the loan agreement, the Company obtained a $700 unsecured loan for a 24-month term at a fixed interest rate of 10% per annum. Under the loan agreement, the Company will pay $700 of principal plus all accrued but unpaid interest at maturity. The notes may be prepaid at any time prior to maturity without penalty. The notes must be repaid prior to maturity in the event of default. In connection therewith, the Company issued the accredited investor a two-year warrant to purchase 79,459 shares of common stock at an exercise price of $1.85 per share. The warrants were not able to be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 4.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were exercised in full in November 2017. In March 2018, the Company paid this loan and all associated interest in full. On April 5, 2016, the Company entered into a loan agreement with an accredited investor. Pursuant to the loan agreement, the Company obtained a $160 unsecured loan for a 24-month term at a fixed interest rate of 10% per annum. Under the loan agreement, the Company will pay $160 of principal plus all accrued but unpaid interest at maturity. The notes may be prepaid at any time prior to maturity without penalty. The notes must be repaid prior to maturity in the event of default. In connection therewith, the Company issued the accredited investor a two-year warrant to purchase 18,162 shares of common stock at an exercise price of $1.85 per share. The warrants may not be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 4.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were exercised in full in December 2017. In April 2018, the Company paid this loan and all associated interest in full. On May 20, 2016, the Company entered into a loan agreement with an accredited investor. Pursuant to the loan agreement, the Company obtained an $80 unsecured loan for a 24-month term at a fixed interest rate of 10% per annum. Under the loan agreement, the Company will pay $80 of principal plus all accrued but unpaid interest at maturity. The notes may be prepaid at any time prior to maturity without penalty. The notes must be repaid prior to maturity in the event of default. In connection therewith, the Company issued the accredited investor a two-year warrant to purchase 9,081 shares of common stock at an exercise price of $1.85 per share. The warrants may not be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 4.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were partially exercised in December 2017 for an aggregate of 7,323 shares of the Company’s common stock with the remainder being exercised in March 2018. In May 2018, the Company paid this loan and all associated interest in full. The Company uses the Black-Scholes pricing model to determine the fair market value of warrants. The fair market value of each warrant is estimated on the date of grant. The fair value of all warrants issued in conjunction with the promissory notes during 2017 was $288. There were no warrants issued during the year ended December 31, 2018. The fair value of the warrants granted is estimated on the date of grant using the Black-Scholes pricing model and the following assumptions for the periods presented: For the year ended December 31, 2018 2017 Expected term (in years) — 4.75 Risk-free interest rate — % 1.27 % Expected volatility — % 104.6 % Expected dividend rate — % 0 % The assumptions are based on the following for each of the years presented: Valuation Method Expected Term Volatility Risk-free Interest Rate Expected Dividend On July 8, 2016, the Company entered into an additional software license financing agreement with Ascentium Capital, LLC. Pursuant to the agreement, the Company obtained a $74 loan for a 36-month term at a fixed interest rate of 8.9% per annum. Under the loan agreement, the Company agreed to make monthly payments of $2.4 of principal and accrued interest. The loan may be prepaid at any time prior to maturity without penalty. The agreement provides for customary events of default. In August 2018, the Company paid this loan and all associated interest in full. On July 11, 2016, the Company entered into a secured equipment financing agreement with Royal Bank America Leasing, L.P. Pursuant to the agreement, the Company obtained a $140 loan for a 36-month term at a fixed interest rate of 7.3% per annum, which was secured by related equipment. The loan was to be disbursed in three installments. The first installment was for $37. The second installment for $47 was disbursed in July 2017, and the third installment for $56 was to be disbursed in July 2018. Under the loan agreement, the Company will pay $3.5 of principal and accrued interest for each of the first 12 months (July 2016 through July 2017), $4.4 of principal and accrued interest for each of months 13-24 (July 2017 through July 2018), and $5.3 of principal and accrued interest for each of months 25-36 (July 2018 through July 2019). The loan may be prepaid at any time only in accordance with the agreement. The agreement provides for customary events of default. The Company elected not to receive the third installment of this loan, and in July 2018, the Company paid this loan and all associated interest in full. On October 2, 2016, the Company entered into a secured equipment financing agreement with Ascentium Capital, LLC. Pursuant to the agreement, the Company obtained a $33 loan for a 36-month term at a fixed interest rate of 9.1% per annum. Under the loan agreement, the Company agreed to make monthly payments of $1.0 of principal and accrued interest. The loan may be prepaid at any time prior to maturity without penalty. The agreement provides for customary events of default. In August 2018, the Company paid this loan and all associated interest in full. On April 1, 2017, the Company entered into a software license financing agreement with Ascentium Capital, LLC. Pursuant to the agreement, the Company obtained a $63 loan for a 12-month term at a fixed interest rate of 10.3% per annum to finance its upfront software licensing fee. The Company agreed to pay $5.6 of principal and accrued interest for each month of the term. The loan may be prepaid at any time prior to maturity without penalty. The agreement provides for customary events of default. In April 2018, the Company repaid this loan and it is no longer outstanding. For the years ended December 31, 2018 and 2017, interest expense was $298 and $464 respectively, which included amortization of the debt discount of $22 and $156, respectively. Indemnification Obligations The Company enters into agreements with customers, partners, lenders, consultants, lessors, contractors, sales representatives and parties to certain transactions in the ordinary course of the Company’s business. These agreements may require the Company to indemnify the other party against third party claims alleging that its product infringes a patent or copyright. Certain of these agreements require the Company to indemnify the other party against losses arising from: a breach of representations or covenants, claims relating to property damage, personal injury or acts or omissions of the Company, its employees, agents or representatives. The Company has also agreed to indemnify the directors and certain of the officers and employees in accordance with the by-laws of the Company. These indemnification provisions will vary based upon the nature and terms of the agreements. In many cases, these indemnification provisions do not contain limits on the Company’s liability, and the occurrence of contingent events that will trigger payment under these indemnities is difficult to predict. As a result, the Company cannot estimate its potential liability under these indemnities. The Company believes that the likelihood of conditions arising that would trigger these indemnities is remote and, historically, the Company had not made any significant payment under such indemnification provisions. Accordingly, the Company has not recorded any liabilities relating to these agreements. In certain cases, the Company has recourse against third parties with respect to the aforesaid indemnities, and the Company believes it maintains adequate levels of insurance coverage to protect the Company with respect to potential claims arising from such agreements. |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Stockholders? Equity (Deficit) | 8. Stockholders’ Equity (Deficit) Authorized Capital The Company has 50,000,000 authorized shares of capital stock, all of which are designated as common stock with par value of $0.001 per share. A. Common Stock Issuance of Common Stock On January 23, 2017, the Company issued and sold 40,000 shares of its common stock to Glenhill Concentrated Long Master Fund, LLC, a significant stockholder at such time, pursuant to a stock purchase agreement for $100,000, which was paid in cash. On February 13, 2017, the Company issued and sold an aggregate of 150,000 shares of its common stock to two accredited investors, including GPG RM Investment, LLC, an affiliate of one of its significant stockholders at such time, pursuant to separate stock purchase agreements for an aggregate purchase price of $375,000, which was paid in cash. Voting Rights of Common Stock Each holder of shares of Common Stock is entitled to one vote for each share held. Common Stock Warrants In December 2015, the Company issued an accredited investor two-year warrants to purchase an aggregate of 28,000 shares of common stock at an exercise price of $1.75 per share. The warrants were not able to be exercised, however, absent receipt of stockholder approval, if after such exercise the holder would be the beneficial owner of more than 9.99% of the Company’s common stock. This warrant was exercised in full in December 2017. In January 2016, the Company issued the Chang Family Trust a two-year warrant to purchase 114,286 shares of common stock at an exercise price of $1.75 per share. The warrants as issued were not exercisable absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 19.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. Also in January 2016, the Company issued the Chang Family Trust a two-year warrant to purchase 114,286 shares of common stock at an exercise price of $1.75 per share. The warrants as issued were not exercisable absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 19.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The 19.99% limitation was removed by the amendments discussed in Note 8. These warrants were exercised in full in December 2017. In March 2016, the Company issued an accredited investor a two-year warrant to purchase 79,459 shares of common stock at an exercise price of $1.85 per share. The warrants were not able to be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 4.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. This warrant was exercised in full in November 2017. In April 2016, the Company issued an accredited investor a two-year warrant to purchase 18,162 shares of common stock at an exercise price of $1.85 per share. The warrants were not able to be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 4.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. This warrant was exercised in full in December 2017. In May 2016, the Company issued an accredited investor a two-year warrant to purchase 9,081 shares of common stock at an exercise price of $1.85 per share. The warrants may not be exercised absent receipt of stockholder approval if after such exercise the holder would be the beneficial owner of more than 4.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. The warrants were partially exercised in December 2017 for an aggregate of 7,323 shares of the Company’s common stock with the remainder being exercised in March 2018. In November 2016, the Company issued an accredited investor a two-year warrant to purchase an aggregate of 28,378 shares of common stock at an exercise price of $1.85 per share. The warrants were not able to be exercised, however, absent receipt of stockholder approval, if after such exercise the holder would be the beneficial owner of more than 9.99% of the Company’s common stock. The relative fair value of this warrant was recorded as a debt discount on the Company’s balance sheet and partially offsets the total balance due for loans payable. This warrant was exercised in full in January 2018. On May 2, 2017, the Company issued the Chang Family Trust a warrant to purchase 134,616 shares of its common stock at an exercise price of $2.60 per share. In accordance with FASB ASC 815, these warrants were classified within permanent equity. The warrant expires January 21, 2022. As part of the loan amendment discussed in Note 8, the fair value of the warrants are considered in the calculation when determining whether an amendment resulted in a modification or extinguishment of the original loans and in accordance with FASB ASC 470, the Company recorded the amendment as an extinguishment of the original loans, which resulted in a loss on extinguishment of $179 as recorded in the statements of operations. This warrant was exercised in full in October 2018. Common Stock For the years ended December 31, 2018 and 2017, a total of 2,037,661 and 2,382,443 shares of common stock, respectively, were reserved for issuance upon (i) exercise of common stock warrants, and (ii) the exercise of outstanding stock options, as follows: Year ended December 31, 2018 2017 Common stock warrants 276,214 527,306 Stock options 1,761,447 1,855,138 Total 2,037,661 2,382,444 |
Stock Option Plan
Stock Option Plan | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock Option Plan | 9. Stock Option Plan The Company’s stock-based compensation program is designed to attract and retain employees while also aligning employees’ interests with the interests of its stockholders. Stock options have been granted to employees under the stockholder-approved 2007 Key Person Stock Option Plan (“2007 Plan”) or the stockholder-approved 2014 Stock Incentive Plan (“2014 Plan”). Stockholder approval of the 2014 Plan became effective in September 2014. The 2014 Plan originally provided that the aggregate number of shares of common stock that may be issued pursuant to awards granted under the 2014 Plan may not exceed 450,000 shares (the “Share Reserve”), however in October 2015, the stockholders approved a 1,500,000 increase to the Share Reserve. In addition, the Share Reserve automatically increases on January 1st of each year, for a period of not more than 10 years, beginning on January 1st of the year following the year in which the 2014 Plan became effective and ending on (and including) January 1, 2024, in an amount equal to 4% of the total number of shares of common stock outstanding on December 31st of the preceding calendar year. The Company’s board of directors may act prior to January 1st of a given year to provide that there will be no January 1st increase in the Share Reserve for such year or that the increase in the Share Reserve for such year will be a lesser number of shares of common stock than would otherwise occur. The Share Reserve is currently 2,783,616 shares for the year ending December 31, 2018. In light of stockholder approval of the 2014 Plan, the Company no longer grants equity awards under the 2007 Plan. As of December 31, 2018, there were no shares available for future stock-based compensation grants under the 2007 Plan and 987,337 shares of an aggregate total of 2,783,616 shares available for future stock-based compensation grants under the 2014 Plan. Aggregate intrinsic value represents the difference between the closing market value as of December 31, 2018 of the underlying common stock and the exercise price of outstanding, in-the-money options. A summary of the Company’s stock option activity and related information for 2018 and 2017 is as follows: Options Outstanding Number of Weighted Weighted Aggregate Balance, December 31, 2016 2,049,517 $ 2.58 7.66 $ 306 Options granted 180,000 2.10 Options exercised (205,000 ) 0.52 Options forfeited/cancelled (169,379 ) 3.41 Balance, December 31, 2017 1,855,138 $ 2.69 7.48 $ 9,850 Options granted 135,000 8.00 Options exercised (222,281 ) 2.05 Options forfeited/cancelled (6,410 ) 3.44 Balance, December 31, 2018 1,761,447 $ 3.18 6.84 $ 55,000 Exercisable as of December 31, 2017 1,465,611 $ 2.78 7.27 $ 7,646 Exercisable as of December 31, 2018 1,481,591 $ 2.83 6.57 $ 46,780 The total compensation cost related to unvested stock option awards not yet recognized was $1,038 as of December 31, 2018. The weighted average period over which the total unrecognized compensation cost related to these unvested stock awards will be recognized is 1.83 years. The total number of unvested shares was 279,856 and 389,527 as of December 31, 2018 and 2017, respectively. The total estimated grant date fair value of unvested options was $1,038 and $1, 290 as of December 31, 2018 and 2017, respectively. The total estimated grant date fair value of options vested during the years ended December 31, 2018 and 2017 was $601 and $343, respectively. The weighted average grant date fair value of options granted during the year ended December 31, 2018 is $5.97 per share or an aggregate grant date fair value of $806. The weighted average grant date fair value of options granted during the year ended December 31, 2017 is $1.61 per share or an aggregate grant date fair value of $290. The weighted average grant date fair value of options forfeited during the year ended December 31, 2018 was $1.42. The weighted average grant date fair value of options forfeited during the year ended December 31, 2017 was $2.25. In January 2017, the Company’s Compensation Committee granted options to the board of directors, including the CEO, to acquire an aggregate of 140,000 shares under the 2014 plan. Of these, 15,000 options vest annually on the 1-year anniversary of the grant date. The remaining 125,000 shares vest monthly over 48 months such that they are vested in full on the four-year anniversary of the grant date. In March 2017, the Company’s Compensation Committee granted options to an employee to acquire 30,000 shares under the 2014 plan. The shares vest monthly over 48 months such that they are vested in full on the four-year anniversary of the grant date. In May 2017, the Company’s Compensation Committee granted options to a consultant to acquire 5,000 shares under the 2014 plan. The shares vest monthly over 12 months such that they are vested in full on the one-year anniversary of the grant date. In October 2017, the Company’s Compensation Committee granted options to a consultant to acquire 5,000 shares under the 2014 plan. The shares vest monthly over 48 months such that they are vested in full on the four-year anniversary of the grant date. On January 2, 2018 the Compensation Committee of the Company’s Board of Directors granted, and the full Board ratified, an option to acquire an aggregate of 125,000 shares under the 2014 Plan to the Company’s CEO. This option vests 25% on the one-year anniversary of the grant date and monthly thereafter for 36 months, such that the option is vested in full on the four-year anniversary of the grant date. On January 2, 2018 the Company’s Compensation Committee granted, and the full Board ratified, options to each of the then-seated non-employee Directors to acquire 5,000 shares, for an aggregate of 10,000 shares, under the 2014 Plan. These options vest on the one-year anniversary of their grant date. On February 28, 2018 the Compensation Committee of the Company’s Board of Directors accelerated the vesting on stock options issued to consultants such that all unvested shares were vested on that date. This resulted in a one-time expense of $49 during year ended December 31, 2018. Determining the Fair Value of Stock Options The fair value of the options granted is estimated on the date of grant using the Black-Scholes pricing model and the following assumptions for the periods presented: Year ended December 31, 2018 2017 Expected term (in years) 5 5 Risk-free interest rate 2.2 % 1.94 – 2.07% Expected volatility 99.0 % 98.6 – 106.2% Expected dividend rate 0 % 0% The assumptions are based on the following for each of the years presented: Valuation Method Expected Term Volatility Risk-free Interest Rate Expected Dividend The Company has recorded an expense of $601 and $343 as it relates to stock-based compensation for the years ended December 31, 2018 and 2017, respectively, which was allocated as follows based on the role and responsibility of the recipient in the Company: Year ended December 31, 2018 2017 Cost of Revenues $ 2 $ 2 Engineering and Product Development 36 48 Sales and Marketing 92 93 General and Administrative 471 200 Total $ 601 $ 343 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes The components of the provision for income taxes are as follows: 2018 2017 Current tax provision: Federal $ — $ — State 26 9 Deferred tax provision: Federal — — State — — Total $ 26 $ 9 A summary of the differences between the Company’s effective income tax rate and the federal statutory income tax rate for the years ended December 31, 2018 and 2017 are as follows: 2018 2017 Federal statutory rate 21.00 % 21.00 % State income tax rate, net of federal benefit 1.00 % 14.71 % Change in valuation allowance (2.31 )% 134.91 % Change in U.S. Corporate Tax Rate (2017 U.S. Tax Act) (4.62 )% (171.36 )% Permanent Items (Non-Deductible for Tax) 1.06 % (0.41 )% Other 0.00 % 0.00 % Effective income tax rate 16.07 % (1.15 )% Deferred tax assets are comprised of the following at December 31: 2018 2017 Net operating loss carryforwards 3,864 4,277 Deferred revenue 106 137 Depreciation and amortization 45 23 Stock based compensation 671 635 Accrual and reserves 119 291 Research and development credits, net of tax reserve 533 92 Total gross deferred tax assets 5,338 5,455 Less valuation allowance (5,338 ) (5,455 ) Net deferred tax assets $ — $ — The net change in the valuation allowance for December 31, 2018 was ($117). In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Because of the Company’s limited history of profitability, it recorded a 100% deferred tax allowance. Federal and California tax laws impost significant restrictions on the utilization of net operating loss (“NOL”) carryforwards in the event of a change in ownership of the Company, as defined by Internal Revenue Code Section 382 (“Section 382”). The Company does not believe a change in ownership, as defined by Section 382, has occurred but a formal study has not been completed. The Company has NOL carryforwards for federal and California income tax purposes of approximately $15,356 and $7,247, respectively, as of December 31, 2018. The federal NOL carryforwards, if not utilized, will expire beginning in 2032. The state NOL carryforwards, if not utilized, will expire beginning in 2031. Under The U.S. Tax Cuts & Jobs Act, effective January 1, 2018, NOLs generated after December 31, 2017 will be carried forward indefinitely with the yearly NOL utilization limited to 80% of taxable income. The Company has research and development tax credit carryforwards for federal income tax purposes of approximately $549 as of December 31, 2018. The federal research and development tax credit carryforward, if not utilized will expire beginning in 2032. ASC Topic No. 740. requires companies to determine whether it is “more likely than not” that a tax position will be sustained upon examination by the appropriate taxing authorities before any tax benefit can be recorded in the financial statements. The following table summarizes the activity related to the Company’s gross unrecognized tax benefits: Gross Gross Unrecognized tax benefits – January 1 $ 29 $ 29 Gross increases related to prior tax positions 126 — Gross increases related to current tax positions 62 — Unrecognized tax benefits – December 31 $ 218 $ 29 As of December 31, 2018, and 2017, the Company had $218 and $29, respectively, unrecognized tax benefits and no adjustments to liabilities or operations that were required for uncertain tax positions under ASC 740-10. The Company’s practice is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was zero for the years ended December 31, 2018 and 2017. The Company files income tax returns in the U.S. federal and several state tax jurisdictions. The Company’s tax years beginning in 2013 remain open for examination by the state tax authorities for four years. The Company’s tax years beginning in 2014 remain open for examination by the federal tax authorities for three years. Tax years beginning in 2012 will remain open for examination from the date of utilization of any NOL or credits. The Company does not have any tax positions for which it is reasonably possible the total amount of gross unrecognized tax benefits will increase or decrease within 12 months of the year-ended December 31, 2018. |
Net Income (Loss) Per Share, Ba
Net Income (Loss) Per Share, Basic and Diluted | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Net Income (Loss) Per Share, Basic and Diluted | 12. Net Income (Loss) Per Share, Basic and Diluted Basic earnings (loss) per share (“EPS”) represent net income (loss) attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period. Diluted EPS represents net income attributable to common shareholders divided by the weighted average number of common shares outstanding during the measurement period while also giving effect to all potentially dilutive common shares that were outstanding during the period using the treasury stock method. Basic and diluted net EPS is calculated as follows: For the year ended December 31, 2018 2017 Shares Net Income EPS Shares Net Income EPS Basic EPS 6,079,326 $ 5,014 $ 0.82 5,405,388 $ (1,510 ) $ (0.28 ) Common stock warrants 191,445 — — — Common stock options 1,358,752 — — — Diluted EPS 7,629,523 $ 5,014 $ 0.66 5,405,388 $ (1,510 ) $ (0.28 ) The following weighted average shares outstanding of common stock equivalents were excluded from the computation of diluted net loss per share for the years ended December 31, 2018 and 2017 because including them would have been anti-dilutive: For the year ended December 31, 2018 2017 Weighted average shares outstanding: Common stock warrants — 747,121 Options — 2,094,903 Total — 2,842,024 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Estimates (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis for Presentation | Basis for Presentation The Company’s financial statements and accompanying notes are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). |
Use of Estimates | Use of Estimates The preparation of the accompanying financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities at the date of the financial statements, and reported amounts of revenues and expenses, and related disclosures during the reporting period. Significant items subject to such estimates include revenue recognition, allowance for doubtful accounts, valuation of equipment on lease, deferred tax asset valuation allowance, stock-based compensation and valuation of warrants. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using historical experience and other factors; however, actual results could differ significantly from these estimates. |
Revenue Recognition | Revenue Recognition The Company generates revenues primarily from the rental or license of its vascular testing product, or providing diagnostic testing service to its customers. The Company recognizes revenues from the licensing of its vascular testing product pursuant to agreements that automatically renew each month with revenue recognized on a daily convention basis. The Company’s arrangements with customers for its vascular testing product are normally on a month-to-month basis with fees billed at the rates established in the customer agreement. The Company recognizes revenues for providing diagnostic testing services on a per test basis to customers, as earned. The Company also recognizes revenue for hardware and supplies sales as of the date of shipment. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts is based on management’s assessment of the collectability of accounts. The Company regularly reviews the adequacy of this allowance for doubtful accounts by considering historical experience, the age of the accounts receivable balances, the credit quality of the customers, current economic conditions, and other factors that may affect customers’ ability to pay to determine whether a specific allowance is appropriate. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. |
Assets for Lease | Assets for Lease Assets for lease are recorded at cost. At December 31, 2018 and 2017, assets for lease consisted of vascular testing devices, which are leased to customers. The cost of such assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected undiscounted net cash flows associated with the related assets over their estimated remaining lives against their respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its assets for lease in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2018 and 2017, there were no impairment indicators. |
Property and Equipment | Property and Equipment Capital assets are recorded at cost. The cost of such capital assets is depreciated on a straight-line basis over a term depending on the assigned category (described below) and recorded as cost of revenues for WellChec™ capital assets and depreciation for all other capital assets recorded in engineering and product development, sales and marketing and general and administrative expenses. At December 31, 2018 and 2017, capital assets are classified into one of the following categories: Category Name Description Machinery & Equipment Manufacturing, R&D, or other non-office equipment Computer Equipment & Software Software, computers, monitors, printers and other related equipment. Furniture & Fixtures Office equipment and furniture owned by the company At December 31, 2018 and 2017, capital assets are depreciated based on the following estimated useful life for each category: Account Name Useful Life Machinery & Equipment Five years Computer Equipment & Software Three years Furniture & Fixtures Five years The Company regularly reviews whether facts and circumstances exist which indicate that the carrying amounts of capital assets, may not be recoverable or that the useful life of assets are shorter or longer than originally estimated. The Company assesses the recoverability of its assets by comparing the projected fair value of the related asset over the estimated remaining life against the respective carrying amounts. The Company considers factors such as estimated usage and expected lives of its capital assets in this analysis. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. At December 31, 2017, there was an impairment of the fixed assets used in the WellChec™ business. As a result, the Company recorded an impairment of $251 of WellChec™ equipment during that period. No impairment was recorded during the year ended December 31, 2018. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or an exit price paid to transfer a liability in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of the fair value hierarchy under Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 820, Fair Value Measurement, are described as follows: Level 1 Level 2 Level 3 The financial instruments of the Company consist primarily of cash, accounts receivable, accounts payable, and loans payable. The carrying amounts of these items are considered a reasonable estimate of fair value at December 31, 2018 and 2017 due to their short-term nature and their market interest rates. |
Deferred revenue | Deferred Revenue Deferred revenue represents amounts billed to or collected from customers for which the related revenues have not been recognized because one or more of the revenue recognition criteria have not been met. The full amount is expected to be recognized as revenues within one year from the balance sheet date and, therefore, such deferred amounts have been classified as current liabilities in the balance sheets presented. The Company generally invoices its clients in advance of a rental period with payment due upon receipt of the invoice. |
Debt Discounts | Debt Discounts In 2016, the Company secured promissory notes from various accredited investors. These accredited investors were given the opportunity to purchase fully vested warrants exercisable for common stock, which were determined to have a fair value of $407 at issuance which was recorded as debt discount. These debt discounts are being amortized to interest expense over the two-year life of the loan. The Company recognized $22 and $156 of interest expense associated with these discounts in 2018 and 2017, respectively. See Note 7. |
Research and Development | Research and Development The Company expenses costs related to the research and development associated with the design, development, testing and enhancement of its products and services. Such expenses include salaries and related employee benefits, and fees paid to external service providers. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation expense is measured based on the grant-date fair value of the stock-based awards. The Company recognizes stock-based compensation expense for the portion of each option grant or stock award that is expected to vest over the estimated period of service and vesting. The Company uses the Black-Scholes option pricing model as the method for determining the estimated grant-date fair value of stock options. The Black-Scholes option pricing model requires the use of subjective assumptions which determine the fair value of stock-based awards, including the option’s expected volatility. Stock-based compensation expense is recognized on a straight-line basis over the requisite service period of the grant. |
Employee Benefit Plan | Employee Benefit Plan The Company has a savings plan that qualifies under Section 401(k) of the Internal Revenue Code of 1986, as amended (the “Code”). There were no matching or discretionary employer contributions made to this plan during the years ended December 31, 2018 and 2017. |
Income Taxes | Income Taxes The Company uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized for the expected tax consequences attributable to the differences between financial reporting and the tax bases of existing assets and liabilities and net operating loss (“NOL”) carry forwards, and they are measured using enacted tax rates expected to be in effect when differences are expected to reverse. The U.S. Tax Cuts & Jobs Act of 2017 reduced the U.S. corporate income tax rate to 21%, effective January 1, 2018. In addition, NOLs generated after December 31, 2017 are carried forward indefinitely with yearly NOL utilization limited to 80% of taxable income. A valuation allowance is recorded for loss carry-forwards and other deferred tax assets where it is more likely than not that such loss carry-forward and deferred tax assets will not be realized. The estimate for the valuation allowance for deferred tax assets requires management to make significant estimates and judgments about projected future operating results. If actual results differ from these projections or if management’s expectations of future results change, it may be necessary to adjust the valuation allowance |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements Accounting Pronouncements Recently Adopted In November 2015, the FASB issued Accounting Standard Update (“ASU”) No. 2015-17, Balance Sheet Classification of Deferred Taxes, to reduce complexity and simplify the reporting of deferred income tax liabilities and assets. The amendments in this update require that all deferred tax liabilities and assets be classified as noncurrent in a classified balance sheet. The current requirement that deferred tax liabilities and assets of a tax-paying component of an entity be offset and presented as a single amount is not affected by the amendment of this update. This standard is effective for the Company’s annual periods beginning after December 15, 2017 and interim periods within annual periods beginning after December 15, 2018, with earlier application permitted. The Company adopted the new standard in the first quarter of 2018. The Company maintained a full valuation allowance on all deferred tax balances in 2017 and 2018, and therefore, the adoption of this standard does not have a material impact on its financial statements. In May 2017, the FASB issued ASU No. 2017-09, Compensation — Stock Compensation (Topic 718) — Scope of Modification Accounting. This ASU requires modification accounting for a change in terms or conditions of a share-based payment award only if the fair value, the vesting condition, or the classification of the award (as liability or equity) changes as a result of the changes in terms or conditions. The amendments, which are to be applied prospectively to modifications after adoption, are effective for the Company’s annual periods beginning after December 15, 2017, with early adoption permitted. The Company adopted the new standard in the first quarter of 2018 and it did not have a material effect on the Company’s financial position or results of operations. Accounting Pronouncements Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (“ASU No. 2014-09”). The amendment in this ASU provides guidance on the revenue recognition to depict the transfer of 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. The core principle of this update provides guidance to identify the performance obligations under the contract(s) with a customer and how to allocate the transaction price to the performance obligations in the contract. It further provides guidance to recognize revenue when (or as) the entity satisfies a performance obligation. This standard will replace most existing revenue recognition guidance. On August 8, 2015, the FASB issued ASU 2015-14, which defers the effective date of ASU No. 2014-09 by one year, and permits early adoption as long as the adoption date is not before the original public entity effective date. This standard is effective for the Company’s year ending December 31, 2019 with early adoption permitted for the year ended December 31, 2017. Since the issuance of ASU 2014-09, the FASB has issued several amendments that clarify certain points, including ASU 2016-08, Principal versus Agent Considerations (Reporting Revenue Gross versus Net), ASU 2016-10, Identifying Performance Obligations and Licensing, ASU 2016-11, Rescission of SEC Guidance Because of Accounting Standards Updates 2014-09 and 2014-16 Pursuant to Staff Announcements at the March 3, 2016 Emerging Issues Task Force Meeting, and ASU 2016-12, Narrow-Scope Improvements and Practical Expedients, and ASU No. 2016-20, Technical Corrections and Improvements to Topic 606. The updated revenue standard allows two methods of adoption: (1) retrospectively to each prior period presented (“full retrospective method”), or (2) retrospectively with the cumulative effect recognized in retained earnings as of the date of adoption (“modified retrospective method”). The new standard further requires new disclosures about contracts with customers, including the significant judgments the company has made when applying the guidance. The Company adopted the new standard effective January 1, 2019, using the modified retrospective transition method. The Company determined the adoption of this standard will not have an impact on its financial statements. In January 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU No. 2016-02”). Under the new guidance in ASU No. 2016-02, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: 1) A lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and 2) A right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. Under the new guidance, lessor accounting is largely unchanged, however, certain targeted improvements were made. ASU No. 2016-02 also simplifies the accounting for sale and leaseback transactions. Lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Lessees and lessors may not apply a full retrospective transition approach. The new standard also requires expanded disclosures regarding leasing arrangements. In July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. This ASU provides another transition method in addition to the existing transition method by allowing entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. This ASU also provides further guidance on lessors accounting policy election to not separate non-lease components from the associated lease components and limits this to circumstances in which the non-lease component or components otherwise would be accounted for under the new revenue guidance and both (1) the timing and pattern of transfer are the same for the non-lease component(s) and associated lease component, and (2) the lease component, if accounted for separately, would be classified as a an operating lease. In December 2018, the FASB issued ASU No. 2018-20, Leases (Topic 842): Narrow-Scope Improvements for Lessors. This ASU provide narrow scope improvements for lessor accounting by permitting lessors, as an accounting policy election, to treat certain sales taxes and other similar taxes as lessee costs, to exclude lessor costs paid by lessees directly to third parties from variable payments, and clarify the accounting by lessors for variable payments that related to both a lease component and a nonlease component. This update is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company is currently evaluating the impact that this new standard will have on its financial statements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). This ASU requires timelier recording of credit losses on loans and other financial instruments held. Instead of reserves based on a current probability analysis, ASU 2016-13 requires the measurement of all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. All organizations will now use forward-looking information to better inform their credit loss estimates. ASU 2016-13 requires enhanced disclosures regarding significant estimates and judgments used in estimating credit losses, as well as the credit quality and underwriting standards of an organization’s portfolio. These disclosures include qualitative and quantitative requirements that provide information about the amounts recorded in the financial statements. In addition, ASU 2016-13 amends the accounting for credit losses on available-for-sale debt securities and purchased financial assets with credit deterioration. This standard is effective for the Company’s fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. . The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company is currently evaluating the effect the new standard will have on its financial statements. In June 2018, the FASB issued ASU No. 2018-07, Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting (“ASU 2018-07”). This ASU expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. An entity should apply the requirements of Topic 718 to nonemployee awards except for specific guidance on inputs to an option pricing model and the attribution of costs. The ASU specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. This standard is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company is currently evaluating the impact that this new standard will have on its financial statements. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this ASU modify the disclosure requirements on fair value measurements removing the requirements to disclosure amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, the policy for timing of transfers between levels, and the valuation processes for Level 3 fair value measurements. In addition, it modified certain disclosures related to Level 3 fair value measurements and added additional disclosures regarding the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period. This update is effective for the Company’s annual periods beginning after December 15, 2019, including interim periods within those fiscal years. The Company will adopt the new standard in the first quarter of fiscal year 2020. The Company does not anticipate this update to have a material impact on its financial statements. |
Assets for Lease, net (Tables)
Assets for Lease, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Leases, Capital [Abstract] | |
Schedule of assets for lease | As of December 31, 2018 2017 Assets for lease $ 2,218 $ 1,847 Less: accumulated depreciation (975 ) (700 ) Assets for lease, net $ 1,243 $ 1,147 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of capital assets | As of December 31, 2018 2017 Capital assets $ 457 $ 322 Less: accumulated depreciation (234 ) (129 ) Capital assets, net $ 223 $ 193 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Schedule of accrued expenses | As of December 31, 2018 2017 Compensation $ 2,442 $ 2,275 Board of Director Fees 15 148 Miscellaneous Accruals 340 247 Total Accrued Expenses $ 2,797 $ 2,670 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Loans Payable | December 31, 2018 December 31, 2017 Lender Long-term Short-term Long-term Short-term Loans from Related Parties Chang Family Trust 1,126 Chang Family Trust 516 Glenhill Concentrated Long Master Fund, LLC 250 Other Loans Accredited Investor 700 Accredited Investor 160 Accredited Investor 80 Ascentium Capital, LLC 24 Ascentium Capital, LLC 16 26 Royal Bank America Leasing, L.P. 26 Ascentium Capital, LLC 10 11 Total — — 1,668 1,277 Debt Discounts — — — (22 ) Total, net of debt discounts — — 1,668 1,255 |
Schedule of relative fair value of the warrants granted using the Black-Scholes pricing model | For the year ended December 31, 2018 2017 Expected term (in years) — 4.75 Risk-free interest rate — % 1.27 % Expected volatility — % 104.6 % Expected dividend rate — % 0 % |
Stockholders' Equity (Deficit)
Stockholders' Equity (Deficit) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Stockholders' Equity Note [Abstract] | |
Schedule of common stock reserved for issuance | Year ended December 31, 2018 2017 Common stock warrants 276,214 527,306 Stock options 1,761,447 1,855,138 Total 2,037,661 2,382,444 |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of summary of stock-based compensation activity | Options Outstanding Number of Weighted Weighted Aggregate Balance, December 31, 2016 2,049,517 $ 2.58 7.66 $ 306 Options granted 180,000 2.10 Options exercised (205,000 ) 0.52 Options forfeited/cancelled (169,379 ) 3.41 Balance, December 31, 2017 1,855,138 $ 2.69 7.48 $ 9,850 Options granted 135,000 8.00 Options exercised (222,281 ) 2.05 Options forfeited/cancelled (6,410 ) 3.44 Balance, December 31, 2018 1,761,447 $ 3.18 6.84 $ 55,000 Exercisable as of December 31, 2017 1,465,611 $ 2.78 7.27 $ 7,646 Exercisable as of December 31, 2018 1,481,591 $ 2.83 6.57 $ 46,780 |
Schedule of weighted-average Black-Scholes fair value assumptions | Year ended December 31, 2018 2017 Expected term (in years) 5 5 Risk-free interest rate 2.2 % 1.94 – 2.07% Expected volatility 99.0 % 98.6 – 106.2% Expected dividend rate 0 % 0% |
Schedule of stock-based compensation based on the role and responsibility of the recipient in the Company | Year ended December 31, 2018 2017 Cost of Revenues $ 2 $ 2 Engineering and Product Development 36 48 Sales and Marketing 92 93 General and Administrative 471 200 Total $ 601 $ 343 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of components of the provision for income taxes | 2018 2017 Current tax provision: Federal $ — $ — State 26 9 Deferred tax provision: Federal — — State — — Total $ 26 $ 9 |
Schedule of differences between the Company's effective income tax rate and the Federal statutory income tax rate | 2018 2017 Federal statutory rate 21.00 % 21.00 % State income tax rate, net of federal benefit 1.00 % 14.71 % Change in valuation allowance (2.31 )% 134.91 % Change in U.S. Corporate Tax Rate (2017 U.S. Tax Act) (4.62 )% (171.36 )% Permanent Items (Non-Deductible for Tax) 1.06 % (0.41 )% Other 0.00 % 0.00 % Effective income tax rate 16.07 % (1.15 )% |
Schedule of deferred tax assets | 2018 2017 Net operating loss carryforwards 3,864 4,277 Deferred revenue 106 137 Depreciation and amortization 45 23 Stock based compensation 671 635 Accrual and reserves 119 291 Research and development credits, net of tax reserve 533 92 Total gross deferred tax assets 5,338 5,455 Less valuation allowance (5,338 ) (5,455 ) Net deferred tax assets $ — $ — |
Schedule of activity related to unrecognized tax benefits | Gross Unrecognized Tax Benefits 2018 Gross Unrecognized Tax Benefits 2017 Unrecognized tax benefits – January 1 $ 29 $ 29 Gross increases related to prior tax positions 126 — Gross increases related to current tax positions 62 — Unrecognized tax benefits – December 31 $ 218 $ 29 |
Net Income (Loss) Per Share, _2
Net Income (Loss) Per Share, Basic and Diluted (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted net loss per share | For the year ended December 31, 2018 2017 Shares Net Income EPS Shares Net Income EPS Basic EPS 6,079,326 $ 5,014 $ 0.82 5,405,388 $ (1,510 ) $ (0.28 ) Common stock warrants 191,445 — — — Common stock options 1,358,752 — — — Diluted EPS 7,629,523 $ 5,014 $ 0.66 5,405,388 $ (1,510 ) $ (0.28 ) |
Schedule of common stock equivalents excluded from the computation of diluted net loss per share | For the year ended December 31, 2018 2017 Weighted average shares outstanding: Common stock warrants — 747,121 Options — 2,094,903 Total — 2,842,024 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Estimates (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation method | straight-line basis | |
Description of assets for lease | assets for lease is depreciated on a straight-line basis over 36 months for the units outstanding and recorded as cost of revenues. | |
Impairment of WellChec equipment | $ 251 | |
Fair value of warrants exercisable for common stock at issuance | $ 407 | |
Amortized interest expense | $ 22 | $ 156 |
Capital assets depreciated assumed useful life | 36 months | |
Discount amortization period of debt instrument | 2 years | |
Corporate income tax rate effective in 2018 | 21.00% | |
Carried forward NOL utilization limit | 80% | |
Machinery & Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Capital assets depreciated assumed useful life | Five years | |
Computer Equipment & Software | ||
Property, Plant and Equipment [Line Items] | ||
Capital assets depreciated assumed useful life | Three years | |
Furniture & Fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Capital assets depreciated assumed useful life | Five years |
Assets for lease, net - Summary
Assets for lease, net - Summary of assets for lease (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Leases, Capital [Abstract] | ||
Assets for lease | $ 2,218 | $ 1,847 |
Less: accumulated depreciation | (975) | (700) |
Assets for lease, net | $ 1,243 | $ 1,147 |
Assets for lease, net (Detail T
Assets for lease, net (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Leases, Capital [Abstract] | ||
Depreciation expense | $ 395 | $ 367 |
Accumulated depreciation reduction for returned items | 120 | 152 |
Loss on disposal of assets for lease | $ (200) | $ (247) |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Capital assets | $ 457 | $ 322 |
Less: accumulated depreciation | (234) | (129) |
Capital assets, net | $ 223 | $ 193 |
Property and Equipment, net (_2
Property and Equipment, net (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 108 | $ 192 |
Impairment on fixed assets purchased | 251 | |
Accumulated depreciation reduction | 233 | |
Capital assets reduction | $ 484 |
Accrued Expenses - Summary of a
Accrued Expenses - Summary of accrued expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Liabilities, Current [Abstract] | ||
Compensation | $ 2,442 | $ 2,275 |
Board of Director Fees | 15 | 148 |
Miscellaneous Accruals | 340 | 247 |
Total Accrued Expenses | $ 2,797 | $ 2,670 |
Accrued Expenses (Detail Textua
Accrued Expenses (Detail Textuals) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Liabilities, Current [Abstract] | |
Percentage increase in balance owed | 1.00% |
Concentration of Credit Risk (D
Concentration of Credit Risk (Detail Textuals) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Customer | Dec. 31, 2017USD ($)Customer | |
Concentration Risk [Line Items] | ||
Allowance for doubtful accounts | $ | $ 52 | $ 35 |
Sales revenue | Customer concentration risk | ||
Concentration Risk [Line Items] | ||
Number of customers | 2 | 2 |
Sales revenue | Customer concentration risk | Customer one | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 52.50% | 55.00% |
Sales revenue | Customer concentration risk | Customer two | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 19.50% | 11.10% |
Accounts receivable | Customer concentration risk | ||
Concentration Risk [Line Items] | ||
Number of customers | 2 | 2 |
Accounts receivable | Customer concentration risk | Customer one | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 43.50% | 56.60% |
Accounts receivable | Customer concentration risk | Customer two | ||
Concentration Risk [Line Items] | ||
Concentration risk percentage | 40.40% | 23.90% |
Commitments and Contingencies_2
Commitments and Contingencies (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Instrument [Line Items] | ||
Long-term, Total | $ 0 | $ 1,668 |
Long-term, Debt Discounts | 0 | 0 |
Long-term, Total, net of debt discounts | 0 | 1,668 |
Short-term, Total | 0 | 1,277 |
Short-term, Debt Discounts | 0 | (22) |
Short-term, Total, net of debt discounts | $ 0 | 1,255 |
Chang Family Trust | ||
Debt Instrument [Line Items] | ||
Long-term, Total | 1,126 | |
Chang Family Trust | ||
Debt Instrument [Line Items] | ||
Long-term, Total | 516 | |
Glenhill Concentrated Long Master Fund, LLC | ||
Debt Instrument [Line Items] | ||
Short-term, Total | 250 | |
Accredited Investor | ||
Debt Instrument [Line Items] | ||
Short-term, Total | 700 | |
Accredited Investor | ||
Debt Instrument [Line Items] | ||
Short-term, Total | 160 | |
Accredited Investor | ||
Debt Instrument [Line Items] | ||
Short-term, Total | 80 | |
Ascentium Capital, LLC | ||
Debt Instrument [Line Items] | ||
Short-term, Total | 24 | |
Ascentium Capital, LLC | ||
Debt Instrument [Line Items] | ||
Long-term, Total | 16 | |
Short-term, Total | 26 | |
Royal Bank America Leasing, L.P. | ||
Debt Instrument [Line Items] | ||
Short-term, Total | 26 | |
Ascentium Capital, LLC | ||
Debt Instrument [Line Items] | ||
Long-term, Total | 10 | |
Short-term, Total | $ 11 |
Commitments and Contingencies_3
Commitments and Contingencies (Details 1) - Percent | Dec. 31, 2018 | Dec. 31, 2017 |
Expected term (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected term | 4 years 9 months | |
Risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 0 | 1.27 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 0 | 104.6 |
Expected dividend rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Warrants measurement input | 0 | 0 |
Commitments and Contingencies_4
Commitments and Contingencies (Detail Textuals) - USD ($) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017 | Jul. 15, 2015 | Sep. 23, 2014 | |
Property Subject to or Available for Operating Lease [Line Items] | ||||
Facilities lease expense | $ 69,000 | $ 67,000 | ||
Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Term specified for lease agreement | 36 months | |||
Anticipates total future lease payments | 0 | |||
Sub Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Term specified for lease agreement | 30 months | |||
Anticipates receipt of total future sublease payments | 0 | |||
Lease term from February 2015 to January 2016 | Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Payments required per month under terms of lease agreement | 17,000 | |||
Lease term from February 2016 to January 2017 | Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Payments required per month under terms of lease agreement | 17,500 | |||
Lease term from February 2017 to January 2018 | Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Payments required per month under terms of lease agreement | 18,000 | |||
Lease term from August 2015 to July 2016 | Sub Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Sublease payments | 15,500 | |||
Lease term from August 2016 to July 2017 | Sub Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Sublease payments | 16,000 | |||
Lease term from August 2017 to January 2018 | Sub Lease Agreement | ||||
Property Subject to or Available for Operating Lease [Line Items] | ||||
Sublease payments | $ 16,500 |
Commitments and Contingencies_5
Commitments and Contingencies (Detail Textuals 1) - USD ($) | May 02, 2017 | Apr. 01, 2017 | Oct. 02, 2016 | Jul. 11, 2016 | Jul. 08, 2016 | Apr. 05, 2016 | Jan. 21, 2016 | Jan. 15, 2016 | Aug. 31, 2018 | Nov. 21, 2016 | May 20, 2016 | Mar. 31, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Oct. 31, 2018 | Jan. 26, 2016 |
Commitments And Contingencies [Line Items] | ||||||||||||||||
Interest expense | $ 298,000 | $ 464,000 | ||||||||||||||
Amortization of debt discount | $ 22,000 | $ 156,000 | ||||||||||||||
Number of warrant issued to purchase common stock | 7,323 | |||||||||||||||
Fair value of warrants with promissory notes | $ 289,000 | |||||||||||||||
Principal and accrued interest payable | $ 294,000,000 | |||||||||||||||
Loss on extinguishment of loans | $ (179,000) | |||||||||||||||
Number of shares issued for payment of loan and accrued interest | 12,943 | |||||||||||||||
Amended loan agreement | Chang Family Trust | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 1,500,000 | |||||||||||||||
Software License Financing Agreement | Ascentium Capital, LLC | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 63,000 | $ 74,000 | ||||||||||||||
Term of loan | 12 months | 36 months | ||||||||||||||
Annual fixed interest rate | 10.30% | 8.90% | ||||||||||||||
Monthly principal plus accrued interest payment | $ 5,600 | $ 2,400 | ||||||||||||||
Secured Equipment Financing Agreement | Royal Bank America Leasing, L.P. | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 140,000 | |||||||||||||||
Term of loan | 36 months | |||||||||||||||
Annual fixed interest rate | 7.30% | |||||||||||||||
First installment | $ 37,000 | |||||||||||||||
Second installment disbursed in July 2017 | 47,000 | |||||||||||||||
Third installment disbursed in July 2018 | 56,000 | |||||||||||||||
Secured Equipment Financing Agreement | Royal Bank America Leasing, L.P. | July 2016 through July 2017 | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Principal and accrued interest payable | 3,500 | |||||||||||||||
Secured Equipment Financing Agreement | Royal Bank America Leasing, L.P. | July 2017 through July 2018 | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Principal and accrued interest payable | 4,400 | |||||||||||||||
Secured Equipment Financing Agreement | Royal Bank America Leasing, L.P. | July 2018 through July 2019 | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Principal and accrued interest payable | $ 5,300 | |||||||||||||||
Secured Equipment Financing Agreement | Ascentium Capital, LLC | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 33,000 | |||||||||||||||
Term of loan | 36 months | |||||||||||||||
Annual fixed interest rate | 9.10% | |||||||||||||||
Monthly principal plus accrued interest payment | $ 1,000 | |||||||||||||||
Unsecured Debt | Loan Agreement | Accredited Investor | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 160,000 | $ 80,000 | $ 700,000 | |||||||||||||
Term of loan | 24 months | 24 months | 24 months | |||||||||||||
Annual fixed interest rate | 10.00% | 10.00% | 10.00% | |||||||||||||
Monthly principal plus accrued interest payment | $ 160,000 | $ 80,000 | $ 700,000 | |||||||||||||
Warrant term | 2 years | 2 years | 2 years | |||||||||||||
Number of warrant issued to purchase common stock | 18,162 | 9,081 | 79,459 | |||||||||||||
Exercise price per warrants | $ 1.85 | $ 1.85 | $ 1.85 | |||||||||||||
Minimum percentage holding required by holder to retain exercising rights | more than 4.99% | more than 4.99% | more than 4.99% | |||||||||||||
Unsecured Debt | Loan Agreement | Glen J. Krevlin | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 250,000 | |||||||||||||||
Term of loan | 24 months | |||||||||||||||
Annual fixed interest rate | 10.00% | |||||||||||||||
Monthly principal plus accrued interest payment | $ 250,000 | |||||||||||||||
Warrant term | 2 years | |||||||||||||||
Number of warrant issued to purchase common stock | 28,378 | |||||||||||||||
Exercise price per warrants | $ 1.85 | |||||||||||||||
Minimum percentage holding required by holder to retain exercising rights | more than 9.99% | |||||||||||||||
Unsecured Debt | Loan Agreement | Chang Family Trust | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Amount of loan obtained | $ 500,000 | $ 1,000,000 | ||||||||||||||
Term of loan | 24 months | 24 months | ||||||||||||||
Annual fixed interest rate | 5.00% | 10.00% | ||||||||||||||
Monthly principal plus accrued interest payment | $ 500,000 | $ 1,000,000 | ||||||||||||||
Additional indebtness | $ 50,000 | $ 50,000 | ||||||||||||||
Warrant term | 2 years | 2 years | ||||||||||||||
Number of warrant issued to purchase common stock | 114,286 | 114,286 | 114,286 | |||||||||||||
Exercise price per warrants | $ 1.75 | $ 1.75 | $ 1.75 | |||||||||||||
Unsecured Debt | Amended loan agreement | Chang Family Trust | ||||||||||||||||
Commitments And Contingencies [Line Items] | ||||||||||||||||
Term of loan | 2 years | |||||||||||||||
Warrant term | 3 years | |||||||||||||||
Number of warrant issued to purchase common stock | 134,616 | |||||||||||||||
Exercise price per warrants | $ 2.60 | |||||||||||||||
Specific portion of notes on which rate of interest increased | $ 500,000 | |||||||||||||||
Rate of interest charged on specific portion of note | 10.00% | |||||||||||||||
Extended maturity of promissory notes | 12 months | |||||||||||||||
Minimum percentage holding required by holder to retain exercising rights | more than 19.99% | |||||||||||||||
Loss on extinguishment of loans | $ (179,000) |
Stockholders' Deficit (Details)
Stockholders' Deficit (Details) - shares | Dec. 31, 2018 | Dec. 31, 2017 |
Stockholders Equity Deficit [Line Items] | ||
Total | 2,037,661 | 2,382,444 |
Common stock warrants | ||
Stockholders Equity Deficit [Line Items] | ||
Total | 276,214 | 527,306 |
Stock options | ||
Stockholders Equity Deficit [Line Items] | ||
Total | 1,761,447 | 1,855,138 |
Stockholders' Deficit (Detail T
Stockholders' Deficit (Detail Textuals) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Stockholders' Equity Note [Abstract] | ||
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Stockholders' Deficit (Detail_2
Stockholders' Deficit (Detail Textuals 1) - USD ($) $ / shares in Units, $ in Thousands | May 02, 2017 | Apr. 05, 2016 | Jan. 21, 2016 | Jan. 15, 2016 | Feb. 13, 2017 | Jan. 23, 2017 | Nov. 21, 2016 | May 20, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | Jan. 26, 2016 |
Stockholders Equity Deficit [Line Items] | |||||||||||||
Value of common of common stock issued and sold | $ 475 | ||||||||||||
Number of warrant issued to purchase common stock | 7,323 | ||||||||||||
Stock-based compensation expense | $ 601 | $ 343 | |||||||||||
Number of shares in reserve | 2,037,661 | 2,382,444 | |||||||||||
Loss on extinguishment of loans | $ (179) | ||||||||||||
Glenhill Concentrated Long Master Fund, LLC | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Number of common stock issued and sold | 40,000 | ||||||||||||
Value of common of common stock issued and sold | $ 100,000 | ||||||||||||
GPG RM Investment, LLC | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Number of common stock issued and sold | 150,000 | ||||||||||||
Value of common of common stock issued and sold | $ 375,000 | ||||||||||||
Common Stock | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Number of common stock issued and sold | 190,000 | ||||||||||||
Unsecured Debt | Chang Family Trust | Loan Agreement | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Exercise price per warrants | $ 1.75 | $ 1.75 | $ 1.75 | ||||||||||
Number of warrant issued to purchase common stock | 114,286 | 114,286 | 114,286 | ||||||||||
Warrant term | 2 years | 2 years | |||||||||||
Unsecured Debt | Chang Family Trust | Amended loan agreement | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Exercise price per warrants | $ 2.60 | ||||||||||||
Number of warrant issued to purchase common stock | 134,616 | ||||||||||||
Warrant term | 3 years | ||||||||||||
Loss on extinguishment of loans | $ (179) | ||||||||||||
Minimum percentage holding required by holder to retain exercising rights | more than 19.99% | ||||||||||||
Unsecured Debt | Accredited investors | Loan Agreement | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Exercise price per warrants | $ 1.85 | $ 1.85 | $ 1.85 | ||||||||||
Number of warrant issued to purchase common stock | 18,162 | 9,081 | 79,459 | ||||||||||
Warrant term | 2 years | 2 years | 2 years | ||||||||||
Number of shares in reserve | 7,323 | ||||||||||||
Minimum percentage holding required by holder to retain exercising rights | more than 4.99% | more than 4.99% | more than 4.99% | ||||||||||
Unsecured Debt | Glenhill Concentrated Long Master Fund, LLC | Loan Agreement | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Exercise price per warrants | $ 1.85 | ||||||||||||
Number of warrant issued to purchase common stock | 28,378 | ||||||||||||
Warrant term | 2 years | ||||||||||||
Minimum percentage holding required by holder to retain exercising rights | more than 9.99 | ||||||||||||
Private placement | |||||||||||||
Stockholders Equity Deficit [Line Items] | |||||||||||||
Threshold limit of common stock on exceeding which need shareholders approval for exercising | 9.99% | ||||||||||||
Exercise price per warrants | $ 1.75 | ||||||||||||
Number of warrant issued to purchase common stock | 28,000 | ||||||||||||
Warrant term | 2 years |
Stock Option Plan - Summary of
Stock Option Plan - Summary of stock-based compensation activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Number of Stock Options Outstanding | |||
Balance | 1,855,138 | 2,049,517 | |
Granted | 135,000 | 180,000 | |
Exercised | (222,281) | (205,000) | |
Forfeited/Cancelled | (6,410) | (169,379) | |
Balance | 1,761,447 | 1,855,138 | 2,049,517 |
Exercisable | 1,481,591 | 1,465,611 | |
Weighted Average Exercise Price | |||
Balance | $ 2.69 | $ 2.58 | |
Granted | 8 | 2.10 | |
Exercised | 2.05 | 0.52 | |
Forfeited/Cancelled | 3.44 | 3.41 | |
Balance | 3.18 | 2.69 | $ 2.58 |
Exercisable | $ 2.83 | $ 2.78 | |
Weighted Average Remaining Contractual Term, Options Outstanding (in years) | 6 years 10 months 2 days | 7 years 5 months 23 days | 7 years 7 months 28 days |
Weighted Average Remaining Contractual Term, Options Exercisable (in years) | 6 years 6 months 24 days | 7 years 3 months 7 days | |
Aggregate Intrinsic Value, Options Outstanding | $ 55,000 | $ 9,850 | $ 306 |
Aggregate Intrinsic Value, Options Exercisable | $ 46,780 | $ 7,646 |
Stock Option Plan - Weighted-av
Stock Option Plan - Weighted-average Black-Scholes fair value assumptions (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years | 5 years |
Risk free interest rate | 2.20% | |
Expected volatility | 99.00% | |
Expected dividend yield | 0.00% | 0.00% |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 2.07% | |
Expected volatility | 106.20% | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk free interest rate | 1.94% | |
Expected volatility | 98.60% |
Stock Option Plan - Stock-based
Stock Option Plan - Stock-based compensation (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 601 | $ 343 |
Cost of Revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 2 | 2 |
Engineering and Product Development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 36 | 48 |
Sales and Marketing | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 92 | 93 |
General and Administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 471 | $ 200 |
Stock Option Plan (Detail Textu
Stock Option Plan (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |
Oct. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares in reserve | 2,037,661 | 2,382,444 | |
Stock-based compensation expense | $ 601 | $ 343 | |
Total unrecognized compensation cost related to non-vested awards | $ 1,038 | ||
Weighted average period of unvested stock awards | 1 year 9 months 29 days | ||
Total estimated grant date fair value of options non-vested | $ 1,038 | 1,290 | |
Total estimated grant date fair value of options vested | $ 601 | $ 343 | |
Weighted average grant date fair value of options granted | $ 5.97 | $ 1.61 | |
Weighted average grant date fair value of options forfeited | $ 1.42 | $ 2.25 | |
Aggregate grant date fair value | $ 806 | $ 290 | |
Total number of unvested shares | 279,856 | 389,527 | |
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of shares reserve increase | 4.00% | ||
Number of shares in reserve | 2,783,616 | ||
Number of stock options vested | 987,337 | ||
Aggregate number of shares | 450,000 | ||
Additional authorized shares | 1,500,000 | ||
Maximum term of stock option grants | 10 years |
Stock Option Plan (Detail Tex_2
Stock Option Plan (Detail Textuals 1) - USD ($) $ in Thousands | Jan. 02, 2018 | Oct. 31, 2017 | May 31, 2017 | Mar. 31, 2017 | Jan. 31, 2017 | Oct. 31, 2015 | Dec. 31, 2018 | Dec. 31, 2017 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Stock-based compensation expense | $ 601 | $ 343 | ||||||
Number of stock options granted | 135,000 | 180,000 | ||||||
Number of stock option forfeited | 6,410 | 169,379 | ||||||
Number of stock options exercised | 222,281 | 205,000 | ||||||
One-time expense | $ 49 | |||||||
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Aggregate number of shares | 450,000 | |||||||
Additional authorized shares | 1,500,000 | |||||||
Number of shares available for future stock-based compensation grants | 987,337 | |||||||
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | Board of Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of stock options vested and exercisable | 15,000 | |||||||
Number of stock options granted | 140,000 | |||||||
Vesting period of option | 48 months | |||||||
Number of shares remaining to vest | 125,000 | |||||||
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | Employee | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of stock options granted | 30,000 | |||||||
Vesting period of option | 48 months | |||||||
Number of years in options fully vested | 4 years | |||||||
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | CEO | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of years in options fully vested | 4 years | |||||||
Number of shares available for future stock-based compensation grants | 125,000 | |||||||
Percentage of shares vested on one year anniversary | 25.00% | |||||||
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | Consultant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of stock options granted | 5,000 | 5,000 | ||||||
Vesting period of option | 48 months | 12 months | ||||||
Number of years in options fully vested | 4 years | 1 year | ||||||
2014 Stock Incentive Plan ("2014 Plan") | Employee stock option | Non-employee Directors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Aggregate number of shares | 10,000 | |||||||
Number of years in options fully vested | 1 year | |||||||
Number of shares available for future stock-based compensation grants | 5,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current tax provision: | ||
Federal | $ 0 | $ 0 |
State | 26 | 9 |
Deferred tax provision: | ||
Federal | 0 | 0 |
State | 0 | 0 |
Total | $ 26 | $ 9 |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 21.00% |
State income tax rate, net of federal benefit | 1.00% | 14.71% |
Change in valuation allowance | (2.31%) | 134.91% |
Change in U.S. Corporate Tax Rate (2017 U.S. Tax Act) | (4.62%) | (171.36%) |
Permanent Items (Non-Deductible for Tax) | 1.06% | (0.41%) |
Other | 0.00% | 0.00% |
Effective income tax rate | 16.07% | (1.15%) |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 3,864 | $ 4,277 |
Deferred revenue | 106 | 137 |
Depreciation and amortization | 45 | 23 |
Stock based compensation | 671 | 635 |
Accrual and reserves | 119 | 291 |
Research and development credits, net of tax reserve | 533 | 92 |
Total gross deferred tax assets | 5,338 | 5,455 |
Less valuation allowance | (5,338) | (5,455) |
Net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Details 3)
Income Taxes (Details 3) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unrecognized tax benefits: | ||
Unrecognized tax benefits - January 1 | $ 29 | $ 29 |
Gross increases related to prior tax positions | 126 | 0 |
Gross increases related to current tax positions | 62 | 0 |
Unrecognized tax benefits - December 31 | $ 218 | $ 29 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Tax Credit Carryforward [Line Items] | |||
Net operating loss carryforwards for federal | $ 15,356 | ||
Net operating loss carryforwards for California | 7,247 | ||
Net change in the valuation allowance | $ (117) | ||
Effective taxable rate | 80% | ||
Percentage of deferred tax allowance | 100.00% | ||
Research and development tax credit carryforwards for federal income tax | $ 549 | ||
Unrecognized Tax Benefits | 218 | $ 29 | $ 29 |
Federal | |||
Tax Credit Carryforward [Line Items] | |||
Income penalties expense | $ 0 | ||
Operating Loss Carryforwards Expiration Period | 2,032 | ||
Company's tax years beginning for examination | 3 years | ||
State | |||
Tax Credit Carryforward [Line Items] | |||
Income penalties expense | $ 0 | ||
Operating Loss Carryforwards Expiration Period | 2,031 | ||
Company's tax years beginning for examination | 4 years |
Net loss per share, basic and d
Net loss per share, basic and diluted (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Basic EPS (in shares) | 6,079,326 | 5,405,388 |
Common stock warrants (in shares) | 191,445 | 0 |
Common stock options (in shares) | 1,358,752 | 0 |
Diluted EPS (in shares) | 7,629,523 | 5,405,388 |
Net Income - Basic EPS | $ 5,014 | $ (1,510) |
Net Income - Common stock warrants | 0 | 0 |
Net Income - Common stock options | 0 | 0 |
Net Income - Diluted EPS | $ 5,014 | $ (1,510) |
Basic EPS (in dollars per share) | $ 0.82 | $ (0.28) |
Diluted EPS (in dollars per share) | $ 0.66 | $ (0.28) |
Net loss per share, basic and_2
Net loss per share, basic and diluted - Summary of outstanding shares of common stock equivalents excluded from computation of diluted net loss per share (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Weighted average shares outstanding: | ||
Total | 0 | 2,842,024 |
Common stock warrants | ||
Weighted average shares outstanding: | ||
Total | 0 | 747,121 |
Options | ||
Weighted average shares outstanding: | ||
Total | 0 | 2,094,903 |