Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | Apr. 22, 2016 | |
Document And Entity Information | ||
Entity Registrant Name | Microvision, Inc. | |
Entity Central Index Key | 65,770 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity a Well-known Seasoned Issuer? | No | |
Is Entity a Voluntary Filer? | No | |
Is Entity's Reporting Status Current? | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 51,494,000 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2,016 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Cash and cash equivalents | $ 11,209 | $ 7,888 |
Accounts receivable, net of allowances of $38 and $38, respectively | 996 | 1,687 |
Inventory | 906 | 862 |
Other current assets | 590 | 638 |
Total current assets | 13,701 | 11,075 |
Property and equipment, net | 1,537 | 1,669 |
Restricted cash | 435 | 435 |
Intangible assets | 813 | 845 |
Other assets | 18 | 18 |
Total assets | 16,504 | 14,042 |
Current liabilities | ||
Accounts payable | 2,354 | 2,183 |
Accrued liabilities | 3,882 | 3,399 |
Deferred revenue | 1,203 | 2,122 |
Total current liabilities | 7,439 | 7,704 |
Deferred revenue, net of current portion | 5,903 | 6,149 |
Deferred rent, net of current portion | 304 | 342 |
Total liabilities | $ 13,646 | 14,195 |
Commitments and contingencies (Note 6) | ||
Shareholders' equity | ||
Preferred stock, par value $0.001; 25,000 shares authorized; 0 and 0 shares issued and outstanding | $ 0 | 0 |
Common stock, par value $0.001; 100,000 shares authorized; 51,494 and 47,423 shares issued and outstanding | 51 | 47 |
Additional paid-in capital | 489,734 | 483,171 |
Accumulated deficit | (486,927) | (483,371) |
Total shareholders' equity (deficit) | 2,858 | (153) |
Total liabilities and shareholders' equity (Deficit) | $ 16,504 | $ 14,042 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets | ||
Allowance for doubtful accounts receivable, current | $ 38 | $ 38 |
Stockholders equity | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 25,000 | 25,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 100,000 | 100,000 |
Common stock, shares issued | 51,494 | 47,423 |
Common stock, shares outstanding | 51,494 | 47,423 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Product revenue | $ 3,155 | $ 741 |
Royalty revenue | 542 | 144 |
Contract revenue | 4 | 16 |
Total revenue | 3,701 | 901 |
Cost of product revenue | 2,588 | 1,037 |
Cost of contract revenue | 1 | 7 |
Total cost of revenue | 2,589 | 1,044 |
Gross profit | 1,112 | (143) |
Research and development expense | 2,597 | 1,898 |
Sales, marketing, general and administrative expense | 2,068 | 1,921 |
Total operating expenses | 4,665 | 3,819 |
Loss from operations | (3,553) | (3,962) |
Other income, net | (3) | 0 |
Net loss | $ (3,556) | $ (3,962) |
Net loss per share - basic and diluted | $ (0.07) | $ (0.09) |
Weighted-average shares outstanding - basic and diluted | 47,566 | 44,963 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities | ||
Net loss | $ (3,556) | $ (3,962) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation | 187 | 83 |
Amortization of intangible assets | 32 | 32 |
Non-cash share-based compensation expense | 300 | 190 |
Inventory write-downs | 122 | 139 |
Other non-cash adjustments | 1 | (15) |
Change in: | ||
Accounts receivable, net | 691 | 191 |
Inventory | (166) | (455) |
Other current and non-current assets | 48 | (46) |
Accounts payable | 141 | 381 |
Accrued liabilities | 383 | 207 |
Deferred revenue | (1,165) | 8,126 |
Billings on uncompleted contracts in excess of related costs | 0 | 179 |
Net cash provided by (used in) operating activities | (2,982) | 5,050 |
Cash flows from investing activities | ||
Purchases of property and equipment | (82) | (69) |
Net cash used in investing activities | (82) | (69) |
Cash flows from financing activities | ||
Net proceeds from issuance of common stock and warrants | 6,385 | 3,355 |
Net cash provided by financing activities | 6,385 | 3,355 |
Change in cash and cash equivalents | 3,321 | 8,336 |
Cash and cash equivalents, at beginning of period | 7,888 | 8,349 |
Cash and cash equivalents, at end of period | 11,209 | 16,685 |
Supplemental schedule of non-cash investing and financing activities | ||
Non-cash additions to property and equipment | $ 154 | $ 246 |
MANAGEMENT'S STATEMENT - Note 1
MANAGEMENT'S STATEMENT - Note 1 | 3 Months Ended |
Mar. 31, 2016 | |
Management Disclosure | |
MANAGEMENT'S STATEMENT - Note 1 | 1. MANAGEMENTS STATEMENT The Condensed Consolidated Balance Sheets as of March 31, 2016, the Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015, have been prepared by MicroVision, Inc. ("we" or "our") and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at March 31, 2016 and the results of operations and cash flows for all periods presented have been made and consist of normal recurring adjustments. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules of the Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results that may be attained for the entire fiscal year. We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, licensing activities and product and component sales. At March 31, 2016, we had $11.2 million in cash and cash equivalents. Based on our current operating plan, and assuming no additional funds from our existing At-the-Market (ATM) facility discussed in Note 7, we anticipate that we have sufficient cash and cash equivalents to fund our operations through December 2016. We will require additional cash to fund our operating plan past that time. We plan to obtain additional cash through the issuance of equity or debt securities and/or product sales and licensing activities. There can be no assurance that additional cash will be available or that, if available, it will be available on terms acceptable to us on a timely basis. If adequate funds are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing our planned investment in our production capacities or research and development projects, staff, operating costs, or capital expenditures. We are introducing new technology into an emerging market which creates significant uncertainty about our ability to accurately project revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the rate at which original design manufacturers (ODMs) or original equipment manufacturers (OEMs) introduce products incorporating our PicoP® scanning technology and the market acceptance and competitive position of such products. If revenues are less than we anticipate, if the mix of revenues and the associated margins vary from anticipated amounts or if expenses exceed the amounts budgeted, we may require additional capital earlier than expected to fund our operations. In addition, our operating plan provides for the development of strategic relationships with suppliers of components and systems and equipment manufacturers that may require additional investments by us. We have received a report from our independent registered public accounting firm regarding the consolidated financial statements for the year ended December 31, 2015 that includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements are prepared assuming we will continue as a going concern. |
NET LOSS PER SHARE - Note 2
NET LOSS PER SHARE - Note 2 | 3 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share - Note 2 | 2. NET LOSS PER SHARE Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the periods. Diluted net loss per share is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. Diluted net loss per share is equal to basic net loss per share because the effect of dilutive securities outstanding during the periods, including options and warrants computed using the treasury stock method, is anti-dilutive. The components of basic and diluted net loss per share were as follows (in thousands, except loss per share data): Three Months Ended March 31, 2016 2015 Numerator: Net loss available for common shareholders - basic and diluted $ (3,556) $ (3,962) Denominator: Weighted-average common shares outstanding - basic and diluted 47,566 44,963 Net loss per share - basic and diluted $ (0.07) $ (0.09) On March 31, 2016 and 2015, we excluded the following convertible securities from diluted net loss per share, as the effect of including them would have been anti-dilutive: options and warrants exercisable into a total of 8,172,000 and 7,885,000 shares of common stock, respectively, and 60,000 and 60,000 nonvested equity shares, respectively. |
CONCENTRATION OF SALES TO MAJOR
CONCENTRATION OF SALES TO MAJOR CUSTOMERS - Note 4 | 3 Months Ended |
Mar. 31, 2016 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS - Note 3 | 3. CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS Concentration of credit risk Financial instruments that potentially subject us to a concentration of credit risk are primarily cash equivalents and accounts receivable. We typically do not require collateral from our customers. As of March 31, 2016, our cash and cash equivalents are comprised of short-term highly rated money market savings accounts. Concentration of major customers and suppliers For the three months ended March 31, 2016, one commercial customer accounted for 90% of our total revenue and 100% of our net accounts receivable balance at March 31, 2016. For the three months ended March 31, 2015, the same commercial customer accounted for approximately 97% of our total revenue and approximately 99% of our net accounts receivable balance at March 31, 2015. A significant concentration of our components and the products we sell are currently manufactured and obtained from single or limited-source suppliers, which are primarily located in foreign countries. The loss of any single or limited-source supplier, the failure of any of these suppliers to perform as expected, or the disruption in the supply chain of components from these suppliers could subject us to risks and uncertainties including, but not limited to, increased cost of sales, possible loss of revenues, or significant delays in product deliveries, any of which could adversely affect our financial condition and operating results. |
INVENTORY - Note 4
INVENTORY - Note 4 | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Disclosure | |
Inventory - Note 4 | 4. INVENTORY Inventory consists of the following: March 31, December 31, ( in thousands 2016 2015 Raw materials $ 639 $ 232 Finished goods 267 630 $ 906 $ 862 Our inventory consists of raw materials and finished goods assemblies. Inventory is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. In addition, we reduce the value of our inventory to its estimated scrap value when management determines that it is not probable that the inventory will be consumed through the normal course of business during the next twelve months. At March 31, 2016 and December 31, 2015, we recorded aggregate write-downs of $7.1 million and $6.9 million, respectively, offsetting inventory deemed to be obsolete or scrap inventory. From time to time, we may enter into arrangements to sell the obsolete or scrap inventory, or enter into consignment agreements with third parties to sell the units, resulting in a gain in the period such transactions are realized. |
SHARE-BASED COMPENSATION - Note
SHARE-BASED COMPENSATION - Note 5 | 3 Months Ended |
Mar. 31, 2016 | |
Disclosure Of Compensation Related Costs | |
Share-Based Compensation - Note 5 | 5. SHARE-BASED COMPENSATION We issue share-based compensation to employees in the form of options exercisable into our common stock and restricted shares of our common stock. We account for equity instruments issued to employees using the straight-line attribution method of allocating the fair value of share-based compensation expense over the requisite service period of the related award. We determine the fair value of options using the Black-Scholes option pricing model with estimates of option lives, stock price volatility and interest rates, expensed over the periods of service, allowing for pre-vest forfeitures. The fair value of restricted shares is determined by the closing price of our common stock on the NASDAQ Global Market on the date of grant. Changes in the estimated inputs, or using other option valuation methods, could result in materially different option values and share-based compensation expense. The following table shows the amount of share-based compensation expense included in each line item of the statements of operations: Three Months Ended (in thousands) March 31, Share-based compensation expense 2016 2015 Cost of product revenue $ 10 $ 4 Research and development expense 83 47 Sales, marketing, general and administrative expense 207 139 $ 300 $ 190 Options activity and positions The following table summarizes shares, weighted-average exercise price, weighted-average remaining contractual term and aggregate intrinsic value of options outstanding and options exercisable as of March 31, 2016: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term (years) Value Outstanding as of March 31, 2016 3,133,000 $ 5.51 7.1 $ 120,000 Exercisable as of March 31, 2016 1,580,000 $ 8.37 5.6 $ 65,000 As of March 31, 2016, our unamortized share-based employee compensation related to stock options was $2.1 million which we plan to amortize over the next 2.8 years and our unamortized share-based compensation related to the restricted stock units was $36,000 which we plan to amortize over the next 0.2 years. |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Note 6 | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure Footnote | |
Commitments and Contingencies - Note 6 | 6. COMMITMENTS AND CONTINGENCIES Litigation On March 31, 2014, Asia Optical Co., Inc., a supplier pursuant to an agreement entered into in 2008, filed a complaint for arbitration with the American Arbitration Association claiming that we ordered products from them and failed to take delivery of and pay for such products. The relief sought in the complaint is $3.6 million plus attorneys' fees, interest and arbitration costs. We contest the claim and are defending against it. An adverse outcome of these proceedings could materially and adversely affect our financial condition. At this stage, we cannot predict the likelihood of an unfavorable outcome or the range of potential loss. We are also subject to various claims and pending or threatened lawsuits in the normal course of business. We are not currently party to any other legal proceedings that we believe are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. Adverse purchase commitments As of March 31, 2016, we had $500,000 accrued for commitments to purchase materials for the SHOWWX TM |
COMMON STOCK AND WARRANTS - Not
COMMON STOCK AND WARRANTS - Note 7 | 3 Months Ended |
Mar. 31, 2016 | |
Common Stock And Warrants - Note 7 | |
COMMON STOCK AND WARRANTS - Note 7 | 7. COMMON STOCK AND WARRANTS In March 2016, we raised $6.9 million before issuance costs of approximately $650,000 from the sale of 4.1 million shares of common stock in an underwritten public offering. The financing includes a provision that restricts us from selling additional equity until June 20, 2016 without the permission of the underwriter. During the year ended December 31, 2015, we received $3.3 million from the exercise of warrants to purchase 1.5 million shares of our common stock, which warrants were issued in connection with earlier financing transactions. In May 2015, we entered into an ATM agreement with Meyers Associates, L.P. Under the terms of the agreement, we may, from time to time, at our discretion, offer and sell shares of our common stock having an aggregate value of up to $6.0 million. During the three months ended March 31, 2016, there were no proceeds from our ATM facility. As of March 31, 2016, we have received gross proceeds of approximately $2.3 million before issuance costs of approximately $85,000 from the sale of 742,000 shares of our common stock. During the three months ended March 31, 2015, we received gross proceeds of $1.0 million as part of an ATM agreement we entered into with Meyers Associates, L.P. in June 2014. We completed sales under this agreement, having received total proceeds of $4.5 million before issuance costs of approximately $206,000 from the sale of 2.0 million shares of our common stock. |
RECENT ACCOUNTING PRONOUNCEMENT
RECENT ACCOUNTING PRONOUNCEMENTS - Note 8 | 3 Months Ended |
Mar. 31, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
RECENT ACCOUNTING PRONOUNCEMENTS - Note 8 | 8. RECENT ACCOUNTING PRONOUNCEMENTS In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2016-09 (ASU 2016-09), Improvements to Employee Share-Based Payment Accounting. ASU 2016-09 simplifies several aspects of the accounting for share-based payment award transactions including a) income tax consequences; b) classification of awards as either equity or liabilities; and c) classification on the statement of cash flows. ASU 2016-09 is effective for public entities in the fiscal years beginning after December 15, 2016, and for interim periods within those fiscal years. Various elements of the amendments will be applied using either a modified retrospective transition method, retrospectively, or prospectively. Early adoption is permitted. We are currently evaluating the impact the adoption of this standard will have on our financial statements. In February 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use asset and lease liability in the balance sheet for all leases, including operating leases, with terms of more than twelve months. Recognition, measurement and presentation of expenses and cash flows from a lease by a lessee have not significantly changed from previous guidance. The principal difference from previous guidance is that the lease assets and lease liabilities arising from operating leases should be recognized in the balance sheet. The amendments also require qualitative disclosures along with specific quantitative disclosures. The new guidance will be effective for fiscal years beginning after December 15, 2018, and interim periods within those years, with early adoption permitted. The amendments must be applied on a modified retrospective basis. We are currently evaluating the impact that the adoption of this standard will have on our financial statements. In November 2015, the FASB issued Accounting Standards Update No. 2015-17 (ASU 2015-17), Income Taxes: Balance Sheet Classification of Deferred Taxes. ASU 2015-17 eliminates the current requirement to present deferred tax liabilities and assets as current and non-current on the balance sheet and requires that all deferred tax liabilities and asset, and any related valuation allowance, be classified as non-current on the balance sheet. ASU 2015-17 is effective for public entities in fiscal years beginning after December 15, 2016, and for the interim periods within those fiscal years. The new guidance can be applied retrospectively or prospectively and early adoption is permitted. We do not expect the implementation of this standard to have a material effect on our financial statements. In July 2015, the FASB issued Accounting Standards Update No. 2015-11 (ASU 2015-11), Inventory (Topic 330): Simplifying the Measurement of Inventory, which changes the measurement principle for inventory from the lower of cost or market to the lower of cost and net realizable value. ASU 2015-11 defines net realizable value as estimated selling prices in the ordinary course of business, less predictable costs of completion, disposal, and transportation. The new guidance must be applied on a prospective basis and is effective for fiscal years beginning after December 15, 2015, and interim periods within those years, with early adoption permitted. The implementation of this standard did not have a material effect on our financial statements. In August 2014, the FASB issued Accounting Standards Update No. 2014-15 (ASU 2014-15), Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern, which provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity's ability to continue as a going concern within one year of the date the financial statements are issued. An entity must provide certain disclosures if conditions or events raise substantial doubt about the entity's ability to continue as a going concern. ASU 2014-15 will be effective for annual periods ending after December 15, 2016, and interim periods thereafter, with early adoption permitted. We do not expect the implementation of this standard to have a material effect on our financial statements. In May 2014, FASB issued Accounting Standards Update No. 2014-09 (ASU 2014-09), Revenue from Contracts with Customers, an updated standard on revenue recognition. ASU 2014-09 provides enhancements to the quality and consistency of how revenue is reported while also improving comparability in the financial statements of companies reporting using International Financial Reporting Standards and generally accepted accounting principles of the United States. The core principle of the new standard is for companies to recognize revenue to depict the transfer of goods or services to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. The new standard also will result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively, and improve guidance for multiple-element arrangements. In July 2015, the FASB voted to defer the effective date of this update for one year. ASU 2014-09 will be effective in the first quarter of fiscal 2018 and may be applied on a full retrospective or modified retrospective approach. We have not yet selected a transition method and we are currently evaluating the effect that the updated standard will have on our financial statements. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Notes to Financial Statements | |
Management's Statement | The Condensed Consolidated Balance Sheets as of March 31, 2016, the Condensed Consolidated Statements of Operations for the three months ended March 31, 2016 and 2015, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2016 and 2015, have been prepared by MicroVision, Inc. ("we" or "our") and have not been audited. In the opinion of management, all adjustments necessary to state fairly the financial position at March 31, 2016 and the results of operations and cash flows for all periods presented have been made and consist of normal recurring adjustments. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to the rules of the Securities and Exchange Commission (SEC). The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America. You should read these condensed consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015. The results of operations for the three months ended March 31, 2016 are not necessarily indicative of the operating results that may be attained for the entire fiscal year. We have incurred significant losses since inception. We have funded our operations to date primarily through the sale of common stock, convertible preferred stock, warrants, the issuance of convertible debt and, to a lesser extent, from development contract revenues, licensing activities and product and component sales. At March 31, 2016, we had $11.2 million in cash and cash equivalents. Based on our current operating plan, and assuming no additional funds from our existing At-the-Market (ATM) facility discussed in Note 7, we anticipate that we have sufficient cash and cash equivalents to fund our operations through December 2016. We will require additional cash to fund our operating plan past that time. We plan to obtain additional cash through the issuance of equity or debt securities and/or product sales and licensing activities. There can be no assurance that additional cash will be available or that, if available, it will be available on terms acceptable to us on a timely basis. If adequate funds are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing our planned investment in our production capacities or research and development projects, staff, operating costs, or capital expenditures. We are introducing new technology into an emerging market which creates significant uncertainty about our ability to accurately project revenue, costs and cash flows. Our capital requirements will depend on many factors, including, but not limited to, the rate at which original design manufacturers (ODMs) or original equipment manufacturers (OEMs) introduce products incorporating our PicoP® scanning technology and the market acceptance and competitive position of such products. If revenues are less than we anticipate, if the mix of revenues and the associated margins vary from anticipated amounts or if expenses exceed the amounts budgeted, we may require additional capital earlier than expected to fund our operations. In addition, our operating plan provides for the development of strategic relationships with suppliers of components and systems and equipment manufacturers that may require additional investments by us. We have received a report from our independent registered public accounting firm regarding the consolidated financial statements for the year ended December 31, 2015 that includes an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern. The consolidated financial statements are prepared assuming we will continue as a going concern. |
Net Loss Per Share | Basic net loss per share is calculated using the weighted-average number of common shares outstanding during the periods. Diluted net loss per share is calculated using the weighted-average number of common shares outstanding and the dilutive effect of all potentially dilutive securities, including common stock equivalents and convertible securities. Diluted net loss per share is equal to basic net loss per share because the effect of dilutive securities outstanding during the periods, including options and warrants computed using the treasury stock method, is anti-dilutive. |
Inventory | Our inventory consists of raw materials and finished goods assemblies. Inventory is stated at the lower of cost and net realizable value. Management periodically assesses the need to account for obsolescence of inventory and adjusts the carrying value of inventory to its net realizable value when required. In addition, we reduce the value of our inventory to its estimated scrap value when management determines that it is not probable that the inventory will be consumed through the normal course of business during the next twelve months. At March 31, 2016 and December 31, 2015, we recorded aggregate write-downs of $7.1 million and $6.9 million, respectively, offsetting inventory deemed to be obsolete or scrap inventory. From time to time, we may enter into arrangements to sell the obsolete or scrap inventory, or enter into consignment agreements with third parties to sell the units, resulting in a gain in the period such transactions are realized. |
Share-based Compensation | We issue share-based compensation to employees in the form of options exercisable into our common stock and restricted shares of our common stock. We account for equity instruments issued to employees using the straight-line attribution method of allocating the fair value of share-based compensation expense over the requisite service period of the related award. We determine the fair value of options using the Black-Scholes option pricing model with estimates of option lives, stock price volatility and interest rates, expensed over the periods of service, allowing for pre-vest forfeitures. The fair value of restricted shares is determined by the closing price of our common stock on the NASDAQ Global Market on the date of grant. Changes in the estimated inputs, or using other option valuation methods, could result in materially different option values and share-based compensation expense. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Net Loss Per Share Tables | |
Net Loss Per Share (Tables) | The components of basic and diluted net loss per share were as follows (in thousands, except loss per share data): Three Months Ended March 31, 2016 2015 Numerator: Net loss available for common shareholders - basic and diluted $ (3,556) $ (3,962) Denominator: Weighted-average common shares outstanding - basic and diluted 47,566 44,963 Net loss per share - basic and diluted $ (0.07) $ (0.09) |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Inventory Tables | |
Inventory (Tables) | Inventory consists of the following: March 31, December 31, ( in thousands 2016 2015 Raw materials $ 639 $ 232 Finished goods 267 630 $ 906 $ 862 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Share-based Compensation Tables | |
Stock-based employee compensation expense | The following table shows the amount of share-based compensation expense included in each line item of the statements of operations: Three Months Ended (in thousands) March 31, Share-based compensation expense 2016 2015 Cost of product revenue $ 10 $ 4 Research and development expense 83 47 Sales, marketing, general and administrative expense 207 139 $ 300 $ 190 |
Options activity and positions | The following table summarizes shares, weighted-average exercise price, weighted-average remaining contractual term and aggregate intrinsic value of options outstanding and options exercisable as of March 31, 2016: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term (years) Value Outstanding as of March 31, 2016 3,133,000 $ 5.51 7.1 $ 120,000 Exercisable as of March 31, 2016 1,580,000 $ 8.37 5.6 $ 65,000 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Numerator: | ||
Net loss available for common shareholders - basic and diluted | $ (3,556) | $ (3,962) |
Denominator: | ||
Weighted-average shares outstanding - basic and diluted | 47,566 | 44,963 |
Net loss per share - basic and diluted | $ (0.07) | $ (0.09) |
Net Loss Per Share (Convertible
Net Loss Per Share (Convertible Securities and Options Excluded Narrative) (Details) - shares | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Options and Private Warrants Exercisable | ||
Anti-dilutive shares | 8,172,000 | 7,885,000 |
Nonvested Equity Shares | ||
Anti-dilutive shares | 60,000 | 60,000 |
Concentration of Sales to Maj20
Concentration of Sales to Major Customers (Narrative) (Details) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Customer Revenue Concentration | ||
Concentration Risk, Percentage | 90.00% | 97.00% |
Accounts Receivable Concentration | ||
Concentration Risk, Percentage | 100.00% | 99.00% |
Inventory Components (Details)
Inventory Components (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Components Details | ||
Raw materials | $ 639 | $ 232 |
Finished goods | 267 | 630 |
Inventory, net | $ 906 | $ 862 |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Inventory Narrative Details | ||
Inventory allowance | $ 7.1 | $ 6.9 |
Share-Based Compensation (Sched
Share-Based Compensation (Schedule Of Stock-Based Compensation Expense By Statement Of Operations) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Share-based employee compensation expense | $ 300 | $ 190 |
Cost of product revenue | ||
Share-based employee compensation expense | 10 | 4 |
Research and development expense | ||
Share-based employee compensation expense | 83 | 47 |
Sales, marketing, general and administrative expense | ||
Share-based employee compensation expense | $ 207 | $ 139 |
Shared-Based Compensation (Opti
Shared-Based Compensation (Options Activity and Position) (Details) | 3 Months Ended |
Mar. 31, 2016USD ($)$ / sharesshares | |
Shared-based Compensation Options Activity And Position Details | |
Outstanding shares | shares | 3,133,000 |
Weighted-average exercise price of options outstanding | $ / shares | $ 5.51 |
Weighted-average remaining contractual term (in years) of options outstanding | 7 years 36 days |
Aggregate intrinsic value of options outstanding | $ | $ 120,000 |
Exercisable shares | shares | 1,580,000 |
Weighted-average exercise price of options exercisable | $ / shares | $ 8.37 |
Weighted-average remaining contractual term (in years) of options exercisable | 5 years 216 days |
Aggregate intrinsic value of options exercisable | $ | $ 65,000 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Employee Stock Options | |
Unamortized share-based employee compensation expense | $ 2,100,000 |
Weighted-average service period, years | 2 years 288 days |
Restricted Stock Rights | |
Unamortized share-based employee compensation expense | $ 36,000 |
Weighted-average service period, years | 72 days |
Commitments and Contingencies (
Commitments and Contingencies (Adverse Purchase Commitments Narrative) (Details) | Mar. 31, 2016USD ($) |
Commitments And Contingencies Adverse Purchase Commitments Narrative Details | |
Accrued liability for loss on commitments to purchase materials to support production of PicoP based products | $ 500,000 |
Common Stock and Warrants (Narr
Common Stock and Warrants (Narrative) (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |
May. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Common Stock And Warrants Narrative Details | ||||
Number of shares of common stock issued | 4,100,000 | 1,500,000 | ||
Cash received from stock sale, before issuance costs | $ 6,900,000 | $ 1,000,000 | $ 3,300,000 | |
Stock issuance costs | $ 650,000 | |||
Warrant terms and provisions | In May 2015, we entered into an ATM agreement with Meyers Associates, L.P. Under the terms of the agreement, we may, from time to time, at our discretion, offer and sell shares of our common stock having an aggregate value of up to $6.0 million. During the three months ended March 31, 2016, there were no proceeds from our ATM facility. As of March 31, 2016, we have received gross proceeds of approximately $2.3 million before issuance costs of approximately $85,000 from the sale of 742,000 shares of our common stock. | In March 2016, we raised $6.9 million before issuance costs of approximately $650,000 from the sale of 4.1 million shares of common stock in an underwritten public offering. The financing includes a provision that restricts us from selling additional equity until June 20, 2016 without the permission of the underwriter. | During the three months ended March 31, 2015, we received gross proceeds of $1.0 million as part of an ATM agreement we entered into with Meyers Associates, L.P. in June 2014. We completed sales under this agreement, having received total proceeds of $4.5 million before issuance costs of approximately $206,000 from the sale of 2.0 million shares of our common stock. | During the year ended December 31, 2015, we received $3.3 million from the exercise of warrants to purchase 1.5 million shares of our common stock, which warrants were issued in connection with earlier financing transactions. |