Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 22, 2019 | |
Contract with Customer, Liability, Current, Change | ||
Entity Registrant Name | Microvision, Inc. | |
Entity Central Index Key | 0000065770 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Is Entity's Reporting Status Current? | Yes | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 103,522,820 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 6,979 | $ 13,766 |
Accounts receivable, net of allowances of $0 and $0, respectively | 274 | 476 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,199 | 987 |
Inventory | 1,062 | 1,109 |
Other current assets | 1,091 | 1,311 |
Total current assets | 10,605 | 17,649 |
Property and equipment, net | 2,675 | 2,993 |
Operating lease right-of-use asset | 1,559 | 0 |
Restricted cash | 435 | 435 |
Intangible assets | 457 | 486 |
Other assets | 1,470 | 1,470 |
Total assets | 17,201 | 23,033 |
Current liabilities | ||
Accounts payable | 2,003 | 2,411 |
Accrued liabilities | 5,092 | 5,602 |
Billings on uncompleted contracts in excess of related costs | 5 | 0 |
Other current liabilities | 10,095 | 10,154 |
Current portion of operating lease liability | 642 | 0 |
Current portion of finance lease obligations | 22 | 21 |
Total current liabilities | 17,859 | 18,188 |
Operating lease liability, net of current portion | 1,746 | 0 |
Finance lease obligations, net of current portion | 28 | 33 |
Deferred rent, net of current portion | 0 | 695 |
Total liabilities | 19,633 | 18,916 |
Commitments and contingencies (Note 9) | ||
Shareholders' equity (deficit) | ||
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; 150,000 shares authorized; 102,105 and 100,105 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 102 | 100 |
Additional paid-in capital | 551,650 | 550,133 |
Accumulated deficit | (554,184) | (546,116) |
Total shareholders' equity (deficit) | (2,432) | 4,117 |
Total liabilities and shareholders' equity (deficit) | 17,201 | 23,033 |
Reconciliation of cash, cash equivalents, and restricted cash balances | ||
Cash and cash equivalents | 6,979 | 13,766 |
Restricted cash | 435 | 435 |
Cash, cash equivalents, and restricted cash | $ 7,414 | $ 14,201 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Allowance for doubtful accounts receivable, current | $ 0 | $ 26 |
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 | 150,000 | 150,000 |
Common stock, shares issued | 102,105 | 100,105 |
Common stock, shares outstanding | 102,105 | 100,105 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | $ 1,851 | $ 2,188 |
Operating expenses: | ||
Total cost of revenue | 1,243 | 1,873 |
Gross profit | 608 | 315 |
Research and development expense | 5,973 | 4,828 |
Sales, marketing, general and administrative expense | 2,699 | 2,607 |
Total operating expenses | 8,672 | 7,435 |
Loss from operations | (8,064) | (7,120) |
Other expense, net | (4) | (12) |
Net loss | $ (8,068) | $ (7,132) |
Net loss per share - basic and diluted | $ (0.08) | $ (0.09) |
Weighted-average shares outstanding - basic and diluted | 101,971 | 78,610 |
Product revenue | ||
Revenue from Contract with Customer, Including Assessed Tax | $ 199 | $ 0 |
Operating expenses: | ||
Cost of Goods and Services Sold | 288 | 238 |
License and royalty | ||
Revenue from Contract with Customer, Including Assessed Tax | 0 | 11 |
Contract | ||
Revenue from Contract with Customer, Including Assessed Tax | 1,652 | 2,177 |
Operating expenses: | ||
Cost of Goods and Services Sold | $ 955 | $ 1,635 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Common stock | Additional paid-in capital | Accumulated deficit | Total |
Beginning balances at Dec. 31, 2017 | $ 79 | $ 528,873 | $ (524,086) | $ 4,866 |
Beginning balances, shares at Dec. 31, 2017 | 78,597 | |||
Adoption of New Accounting Pronouncement, Revenue from Contracts with Customers | $ 0 | 0 | 5,220 | 5,220 |
Share-based compensation expense | $ 0 | 332 | 0 | 332 |
Share-based compensation expense, shares | 16 | |||
Net loss | $ 0 | 0 | (7,132) | (7,132) |
Ending balances at Mar. 31, 2018 | $ 79 | 529,205 | (525,998) | 3,286 |
Ending balances, shares at Mar. 31, 2018 | 78,613 | |||
Beginning balances at Dec. 31, 2018 | $ 100 | 550,133 | (546,116) | 4,117 |
Beginning balances, shares at Dec. 31, 2018 | 100,105 | |||
Share-based compensation expense | $ 0 | 351 | 0 | 351 |
Share-based compensation expense, shares | 0 | |||
Sales of common stock | $ 2 | 1,166 | 0 | 1,168 |
Sales of common stock, shares | 2,000 | |||
Net loss | $ 0 | 0 | (8,068) | (8,068) |
Ending balances at Mar. 31, 2019 | $ 102 | $ 551,650 | $ (554,184) | $ (2,432) |
Ending balances, shares at Mar. 31, 2019 | 102,105 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net loss | $ (8,068) | $ (7,132) |
Adjustments to reconcile net loss to net cash used in operations: | ||
Depreciation | 552 | 448 |
Share-based compensation expense | 351 | 320 |
Inventory write-downs | 0 | 4 |
Other non-cash adjustments | 0 | (10) |
Change in: | ||
Accounts receivable, net | 202 | (2,487) |
Costs and estimated earnings in excess of billings on uncompleted contracts | (212) | 422 |
Inventory | 47 | 18 |
Other current and non-current assets | 220 | (702) |
Accounts payable | (193) | (1,010) |
Accrued liabilities | (332) | 755 |
Billings on uncompleted contracts in excess of related costs | 5 | (1) |
Other currrent liabilities | (59) | (39) |
Operating lease liabilities | (160) | 0 |
Other long-term liabilities | 0 | (142) |
Net cash used in operating activities | (7,647) | (9,556) |
Cash flows from investing activities | ||
Purchases of property and equipment | (313) | (182) |
Net cash used in investing activities | (313) | (182) |
Cash flows from financing activities | ||
Principal payments under finance leases | (4) | 0 |
Net proceeds from issuance of common stock | 1,177 | 0 |
Net cash provided by financing activities | 1,173 | 0 |
Change in cash and cash equivalents, and restricted cash | (6,787) | (9,738) |
Cash, cash equivalents and restricted cash at beginning of period | 14,201 | 17,401 |
Cash, cash equivalents and restricted cash at end of period | 7,414 | 7,663 |
Supplemental schedule of non-cash investing and financing activities | ||
Non-cash additions to property and equipment | $ 221 | $ 101 |
MANAGEMENT'S STATEMENT - Note 1
MANAGEMENT'S STATEMENT - Note 1 | 3 Months Ended |
Mar. 31, 2019 | |
Management Disclosure | |
MANAGEMENT'S STATEMENT - Note 1 | 1. MANAGEMENTS STATEMENT The Condensed Consolidated Balance Sheets as of March 31, 2019, the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the three months ended March 31, 2019 and 2018, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018, 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, 2019 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, 2018. The results of operations for the three months ended March 31, 2019 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, product sales and licensing activities. At March 31, 2019, we had $7.0 million in cash and cash equivalents. Based on our current operating plan that includes expected proceeds from a development contract signed in April 2017 with a major technology company, expected proceeds of $2.0 million from the April 2019 registered direct offering, and without additional proceeds from the sale of shares under our existing Purchase Agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park"), we anticipate that we have sufficient cash and cash equivalents to fund our operations through July 2019. Our receipt of proceeds under our April 2017 development contract is subject to our completion of certain milestones, and we can provide no assurance that such milestones will be completed. We will require additional capital to fund our operating plan past that time. We plan to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures. We are introducing new technology and products 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 commercial success of our laser beam scanning (LBS) engines, the rate at which original equipment manufacturers (OEMs) or original design manufacturers (ODMs) 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 we fail to meet milestones for future payments or have to repay amounts already received under our April 2017 development contract, 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. These factors raise substantial doubt regarding our ability to continue as a going concern. Our unaudited consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to continue as a going concern. |
NET LOSS PER SHARE - Note 2
NET LOSS PER SHARE - Note 2 | 3 Months Ended |
Mar. 31, 2019 | |
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 period. Net loss per share, assuming dilution, 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. Net loss per share, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the period, 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, 2019 2018 Numerator: Net loss available for common shareholders - basic and diluted $ (8,068) $ (7,132) Denominator: Weighted-average common shares outstanding - basic and diluted 101,971 78,610 Net loss per share - basic and diluted $ (0.08) $ (0.09) For the three months ended March 31, 2019 and 2018, we excluded the following securities from net loss per share as the effect of including them would have been anti-dilutive: options outstanding and warrants exercisable into a total of 4,494,000 and 6,946,000 shares of common stock, respectively, and 1,149,000 and 185,000 nonvested restricted stock units, respectively. |
LONG-TERM CONTRACTS - Note 3
LONG-TERM CONTRACTS - Note 3 | 3 Months Ended |
Mar. 31, 2019 | |
Notes To Financial Statements Abstract | |
Long-term contracts - Note 3 | 3. LONG-TERM CONTRACTS In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we received a first payment of $5.0 million in June 2018 and the second payment of $5.0 million in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. If this customer acquires a customer, we expect orders for component sales. We may also receive payments for non-recurring engineering expenses associated with process and product transfer and qualification milestones. During the year ended December 31, 2018 we completed the performance obligations required by the contract. As a result, we recognized $10.0 million in license and royalty revenue during the year ended December 31, 2018. In April 2017, we signed a contract with a major technology company to develop an LBS display system. Under this agreement, we are working to develop a new generation of MEMS, ASICs and related firmware for a high resolution, LBS-based product that the technology company is planning to produce. Under the agreement, we received an upfront payment of $10.0 million in 2017 and may receive up to $15.1 million in fees for development work that is expected to span into the second quarter of 2019. Our receipt of the development fees is contingent on completion of milestones in 2017, 2018, and into the second quarter of 2019. As of March 31, 2019, we have received $12.3 million in fees for development work and recognized $13.7 million in revenue. Upon successful completion of the development program, if the major technology company decides to manufacture the product with the MicroVision display components, the $10.0 million upfront payment would be applied as a discount to future component purchases from us. If the contract is terminated by the technology company for our failure to meet milestones, the $10.0 million upfront payment is subject to repayment. We are recognizing revenue on the $15.1 million in development fees over time based on the proportion of total cost expended (under Topic 606, the "input method") to the total cost expected to complete the contract performance obligation. During the quarter ended March 31, 2019, we have recognized $1.6 million of contract revenue from development fees on this agreement compared to $2.1 million during the quarter ended March 31, 2018. We have an amount equal to the $10.0 million upfront payment classified as an other current liability on the balance sheet. |
REVENUE RECOGNITION - Note 4
REVENUE RECOGNITION - Note 4 | 3 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION - Note 4 | 4. REVENUE RECOGNITION The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate all of our revenue from contracts with customers. We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied. A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard. The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method. The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part. Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time. Disaggregation of revenue The following table provides information about disaggregated revenue by timing of revenue recognition, (in thousands): Three Months Ended March 31, 2019 Product Royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ 199 $ - $ 16 $ 215 Product and services transferred over time - - 1,636 1,636 Total $ 199 $ - $ 1,652 $ 1,851 Three Months Ended March 31, 2018 Product Royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ - $ 11 $ 99 $ 110 Product and services transferred over time - - 2,078 2,078 Total $ - $ 11 $ 2,177 $ 2,188 Contract balances The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands): March 31, December 31, 2019 2018 Accounts receivable, net $ 274 $ 476 Costs and estimated earnings in excess of billings on uncompleted contracts 1,199 987 Billings on uncompleted contracts in excess of related costs 5 - Other current liabilities 10,000 10,000 Under Topic 606, our rights to consideration are presented separately depending on whether those rights are conditional or unconditional. We present our unconditional rights to consideration as "accounts receivable" in our Consolidated Balance Sheet. Contract assets represent rights to consideration that are subject to a condition other than the passage of time and will be comprised primarily of costs and estimated profits in excess of billings on uncompleted contracts and estimated accrued sales-based royalty revenue. Contract costs in excess of billing are included in the "Costs and estimated earnings in excess of billings on uncompleted contracts" line of our Consolidated Balance Sheet. Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages): March 31, December 31, 2019 2018 $ Change % Change Contract assets $ 1,199 $ 987 $ 212 21.5 Contract liabilities (5) - (5) - Net contract assets (liabilities) $ 1,194 $ 987 $ 207 21.0 During the three months ended March 31, 2019, we billed $1.4 million on our development contracts. Of this amount, $987,000 was included in contract assets at December 31, 2018. We also recognized revenue of $1.6 million during the three months ended March 31, 2019, resulting in a contract asset of $1.2 million. Contract acquisition costs We are required to capitalize certain contract acquisition costs consisting primarily of commissions paid when contracts are signed. We currently do not pay any commissions upon the signing of a contract; therefore, no commission cost has been incurred as of March 31, 2019. Transaction price allocated to the remaining performance obligations The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied at the end of the reporting period. The estimated revenue does not include the $10.0 million upfront payment received from a major technology company to develop an LBS display system due to uncertainty around the timing of recognition. Additionally, the estimated revenue does not include amounts of variable consideration attributable to royalties or unexercised contract renewals (in thousands): Remainder of 2019 2020 Product revenue $ - $ - License and royalty revenue - - Contract revenue 1,301 - |
CONCENTRATION OF CREDIT RISK AN
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS - Note 5 | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
CONCENTRATION OF CREDIT RISK AND MAJOR CUSTOMERS AND SUPPLIERS - Note 5 | 5. 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, 2019, 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, 2019, one customer accounted for $1.6 million in revenue, representing 88% of our total revenue. A second customer accounted for $199,000 in revenue, representing 11% of our total revenue. For the three months ended March 31, 2018, one customer accounted for $2.1 million in revenue, representing 95% of our total revenue. One customer accounted for $267,000, or 98% of our net accounts receivable balance at March 31, 2019. A significant concentration of our components and the products we sell are currently manufactured and obtained from single or limited-source suppliers. 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 6
INVENTORY - Note 6 | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure | |
Inventory - Note 6 | 6. INVENTORY Inventory consists of the following: March 31, December 31, ( in thousands 2019 2018 Raw materials $ 32 $ 32 Finished goods 1,030 1,077 $ 1,062 $ 1,109 Inventory consists of raw materials and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO) method and 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. As of March 31, 2019 and December 31, 2018, $1.4 million of materials that are not expected to be consumed during the next twelve months are classified as "other assets" on the balance sheet. |
SHARE-BASED COMPENSATION - Note
SHARE-BASED COMPENSATION - Note 7 | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs | |
Share-Based Compensation - Note 7 | 7. SHARE-BASED COMPENSATION We issue share-based compensation to employees in the form of stock options, restricted stock units (RSUs), and performance stock units (PSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. The PSUs are valued using a binomial option pricing model using the following inputs: stock price, volatility, and risk-free interest rates. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense. The following table summarizes the amount of share-based compensation expense by line item on the statements of operations: Three Months Ended March 31, ( in thousands 2019 2018 Cost of product revenue $ 1 $ - Research and development expense 123 179 Sales, marketing, general and administrative expense 227 141 $ 351 $ 320 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, 2019: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term (years) Value Outstanding as of March 31, 2019 4,494,000 $ 2.26 6.9 $ 20,000 Exercisable as of March 31, 2019 2,355,000 $ 2.94 5.3 $ 5,000 As of March 31, 2019, our unrecognized share-based employee compensation related to stock options was $1.4 million which we plan to amortize over the next 2.1 years, our unrecognized share-based compensation related to RSUs was $456,000 which we plan to amortize over the next 2.1 years, and our unrecognized share-based compensation related to the PSUs was $15,000, which we plan to amortize over the next 2.2 years. |
LEASES - Note 8
LEASES - Note 8 | 3 Months Ended |
Mar. 31, 2019 | |
Notes To Financial Statements Abstract | |
LEASES - Note 8 | 8. LEASES In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) 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 amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on January 1, 2019, meaning we did not restate prior periods. Current year financial information is presented under the guidance in Topic 842, while prior year information will continue to be presented under Topic 840. Adoption of the standard resulted in the recognition of an operating ROU asset of approximately $1.6 million, a lease liability of approximately $2.5 million, and a reduction in other short-term and long-term liabilities of $873,000. Adoption of the standard did not have a material impact on our Statement of Operations or Statement of Cash flows. Accounting for our capital leases remains substantially unchanged. We determine if an arrangement is a lease at inception. On our balance sheet, our office lease is included in Operating lease right-of-use asset, Current portion of operating lease liability and Operating lease liability, net of current portion. On our balance sheet, finance leases are included in Property and equipment, Current portion of finance lease obligations and Finance lease obligations, net of current portion. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our office lease. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments. Our leases have remaining lease terms of two to four years. Our office space lease contains an option to extend the lease for one period of five years. This extension period is not included in our ROU asset or lease liability amounts. Our office lease agreement includes both lease and non-lease components, which are accounted for separately. Our finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless we are reasonably certain to exercise the purchase option. The components of lease expense were as follows: Three Months Ended (in thousands) March 31, 2019 Operating lease expense $ 116 Finance lease expense: Amortization of leased assets 4 Interest on lease liabilities 1 Total finance lease expense 5 Total lease expense $ 121 Supplemental cash flow information related to leases was as follows: Three Months Ended (in thousands) March 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 160 Operating cash flows from finance leases 1 Financing cash flows from finance leases 4 Right-of-use assets obtained in exchange for new lease obligations: Operating leases 1,638 Finance leases $ - Supplemental balance sheet information related to leases was as follows: (in thousands) March 31, 2019 Operating leases Operating lease right-of-use assets $ 1,559 Current portion of operating lease liability 642 Operating lease liability, net of current portion 1,746 Total operating lease liabilities $ 2,388 Finance leases Property and equipment, at cost $ 66 Accumulated depreciation (13) Property and equipment, net $ 53 Current portion of finance lease obligations $ 22 Finance lease obligations, net of current portion 28 Total finance lease liabilities $ 50 Weighted Average Remaining Lease Term Operating leases 4 years Finance leases 2 years Weighted Average Discount Rate Operating leases 6.0% Finance leases 13.8% As of March 31, 2019, maturities of lease liabilities were as follows: Operating Finance Years Ended December 31, leases leases 2019 $ 481 $ 21 2020 656 27 2021 676 9 2022 696 - 2023 175 - Thereafter - - Total minimum lease payments 2,684 57 Less: amount representing interest (296) (7) Present value of capital lease liabilities $ 2,388 $ 50 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Note 9 | 3 Months Ended |
Mar. 31, 2019 | |
Commitments And Contingencies Disclosure Footnote | |
Commitments and Contingencies - Note 9 | 9. COMMITMENTS AND CONTINGENCIES Litigation In March 2019, we filed a Notice of Arbitration in Hong Kong against Ragentek as a result of its failure to perform its obligations under a purchase order with us. The relief sought is $4.0 million dollars plus interest and arbitration costs. At this time we cannot predict the likelihood of a favorable outcome. We are subject to various claims and pending or threatened lawsuits in the normal course of business. We are not currently party to any legal proceedings that management believes are reasonably possible to have a material adverse effect on our financial position, results of operations or cash flows. Purchase commitments At March 31, 2019, we had $5.2 million in open purchase obligations that represent commitments to purchase inventory, materials, capital equipment, and other goods used in the normal operation of our business. |
COMMON STOCK AND WARRANTS - Not
COMMON STOCK AND WARRANTS - Note 10 | 3 Months Ended |
Mar. 31, 2019 | |
Common Stock And Warrants - Note 10 | |
COMMON STOCK AND WARRANTS - Note 10 | 10. COMMON STOCK AND WARRANTS In January 2019, we raised $1.2 million before issuance costs of approximately $26,000 through a registered direct offering of 2.0 million shares of our common stock to a private investor. In December 2018, we raised $4.2 million before issuance costs of approximately $524,000 through an underwritten public offering of 7.0 million shares of our common stock. In June 2018, we raised $18.0 million before issuance costs of approximately $1.4 million through an underwritten public offering of 14.4 million shares of our common stock. |
SUBSEQUENT EVENTS - Note 11
SUBSEQUENT EVENTS - Note 11 | 3 Months Ended |
Mar. 31, 2019 | |
Included in accompanying consolidated balance sheets under the following captions: | |
SUBSEQUENT EVENTS - Note 11 | 11. SUBSEQUENT EVENTS In April 2019, we entered into an agreement with Lincoln Park. Proceeds from any sales of stock are expected to be used for general corporate purposes. Under the terms of the agreement, Lincoln Park initially purchased $1.0 million in shares of common stock at a purchase price of $0.9821. In addition, for a period of 24 months, we have the right, at our sole discretion, to sell up to $10.0 million of additional common stock to Lincoln Park, subject to certain limitations, based on the prevailing market prices of our shares at the time of each sale. Lincoln Park has no right to require any sales and is obligated to purchase the common stock as directed by us, subject to certain limitations set forth in the agreement. Lincoln Park has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares of common stock. In consideration for entering into the agreement, we have issued 250,000 shares of common stock to Lincoln Park as a commitment fee. No warrants, derivatives, or other share classes are associated with this agreement. In April 2019, we raised an additional $2.0 million before issuance costs through a registered direct offering of 2.3 million shares of our common stock to a private investor. This transaction is expected to close on April 26, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Notes To Financial Statements Abstract | |
Management's Statement | The Condensed Consolidated Balance Sheets as of March 31, 2019, the Condensed Consolidated Statements of Operations and Condensed Consolidated Statements of Shareholders’ Equity (Deficit) for the three months ended March 31, 2019 and 2018, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018, 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, 2019 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, 2018. The results of operations for the three months ended March 31, 2019 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, product sales and licensing activities. At March 31, 2019, we had $7.0 million in cash and cash equivalents. Based on our current operating plan that includes expected proceeds from a development contract signed in April 2017 with a major technology company, expected proceeds of $2.0 million from the April 2019 registered direct offering, and without additional proceeds from the sale of shares under our existing Purchase Agreement with Lincoln Park Capital Fund, LLC ("Lincoln Park"), we anticipate that we have sufficient cash and cash equivalents to fund our operations through July 2019. Our receipt of proceeds under our April 2017 development contract is subject to our completion of certain milestones, and we can provide no assurance that such milestones will be completed. We will require additional capital to fund our operating plan past that time. We plan to obtain additional capital through the issuance of equity or debt securities, product sales and/or licensing activities. There can be no assurance that additional capital will be available to us or, if available, will be available on terms acceptable to us or on a timely basis. If adequate capital resources are not available on a timely basis, we intend to consider limiting our operations substantially. This limitation of operations could include reducing investments in our production capacities, research and development projects, staff, operating costs, and capital expenditures. We are introducing new technology and products 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 commercial success of our laser beam scanning (LBS) engines, the rate at which original equipment manufacturers (OEMs) or original design manufacturers (ODMs) 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 we fail to meet milestones for future payments or have to repay amounts already received under our April 2017 development contract, 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. These factors raise substantial doubt regarding our ability to continue as a going concern. Our unaudited consolidated financial statements have been prepared assuming we will continue as a going concern and do not include any adjustments that might be necessary should we be unable to 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 period. Net loss per share, assuming dilution, 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. Net loss per share, assuming dilution, is equal to basic net loss per share because the effect of dilutive securities outstanding during the period, including options and warrants computed using the treasury stock method, is anti-dilutive. |
Revenue recognition | The following is a description of principal activities from which we generate revenue. Revenues are recognized when control of the promised goods or services are transferred to our customers, in an amount that reflects the consideration that we expect to receive in exchange for those goods or services. We generate all of our revenue from contracts with customers. We evaluate contracts based on the 5-step model as stated in Topic 606 as follows: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price, and (v) recognize revenue when (or as) performance obligations are satisfied. A contract contains a promise (or promises) to transfer goods or services to a customer. A performance obligation is a promise (or a group of promises) that is distinct, as defined in the revenue standard. The transaction price is the amount of consideration an entity expects to be entitled to from a customer in exchange for providing the goods or services. A number of factors should be considered to determine the transaction price, including whether there is variable consideration, a significant financing component, noncash consideration, or amounts payable to the customer. The determination of variable consideration will require a significant amount of judgment. In estimating the transaction price we will use either the expected value method or the most likely amount method. The transaction price is allocated to the separate performance obligations in the contract based on relative standalone selling prices. Determining the relative standalone selling price can be challenging when goods or services are not sold on a standalone basis. The revenue standard sets out several methods that can be used to estimate a standalone selling price when one is not directly observable. Allocating discounts and variable consideration must also be considered. Allocating the transaction price can require significant judgement on our part. Revenue is recognized when (or as) the customer obtains control of the good or service/performance obligations are satisfied. Topic 606 provides guidance to help determine if a performance obligation is satisfied at a point in time or over time. Where a performance obligation is satisfied over time, the related revenue is also recognized over time. |
Inventory | Inventory consists of raw materials and finished goods assemblies. Inventory is computed using the first-in, first-out (FIFO) method and 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. As of March 31, 2019 and December 31, 2018, $1.4 million of materials that are not expected to be consumed during the next twelve months are classified as "other assets" on the balance sheet. |
Share-based Compensation | We issue share-based compensation to employees in the form of stock options, restricted stock units (RSUs), and performance stock units (PSUs). We account for the share-based awards by recognizing the fair value of share-based compensation expense on a straight-line basis over the service period of the award, net of estimated forfeitures. The fair value of stock options is estimated on the grant date using the Black-Scholes option pricing model. The fair value of RSUs is determined by the closing price of our common stock on the grant date. The PSUs are valued using a binomial option pricing model using the following inputs: stock price, volatility, and risk-free interest rates. Changes in estimated inputs or using other option valuation methods may result in materially different option values and share-based compensation expense. |
Leases | In February 2016, the FASB issued Accounting Standards Update 2016-02 (ASU 2016-02), Leases (Topic 842). ASU 2016-02 requires lessees to recognize a right-of-use (ROU) 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 amendments also require qualitative disclosures along with specific quantitative disclosures. We adopted this guidance using the cumulative-effect adjustment method on January 1, 2019, meaning we did not restate prior periods. Current year financial information is presented under the guidance in Topic 842, while prior year information will continue to be presented under Topic 840. Adoption of the standard resulted in the recognition of an operating ROU asset of approximately $1.6 million, a lease liability of approximately $2.5 million, and a reduction in other short-term and long-term liabilities of $873,000. Adoption of the standard did not have a material impact on our Statement of Operations or Statement of Cash flows. Accounting for our capital leases remains substantially unchanged. We determine if an arrangement is a lease at inception. On our balance sheet, our office lease is included in Operating lease right-of-use asset, Current portion of operating lease liability and Operating lease liability, net of current portion. On our balance sheet, finance leases are included in Property and equipment, Current portion of finance lease obligations and Finance lease obligations, net of current portion. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. For leases that do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. We use the implicit rate when readily determinable. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Significant judgment may be required when determining whether a contract contains a lease, the length of the lease term, the allocation of the consideration in a contract between lease and non-lease components, and the determination of the discount rate included in our office lease. We review the underlying objective of each contract, the terms of the contract, and consider our current and future business conditions when making these judgments. Our leases have remaining lease terms of two to four years. Our office space lease contains an option to extend the lease for one period of five years. This extension period is not included in our ROU asset or lease liability amounts. Our office lease agreement includes both lease and non-lease components, which are accounted for separately. Our finance leases contain options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless we are reasonably certain to exercise the purchase option. |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Contract with Customer, Asset, Net, Current, Percent Change | |
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, 2019 2018 Numerator: Net loss available for common shareholders - basic and diluted $ (8,068) $ (7,132) Denominator: Weighted-average common shares outstanding - basic and diluted 101,971 78,610 Net loss per share - basic and diluted $ (0.08) $ (0.09) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenue Recognition | |
Schedule of disaggregation of revenues | The following table provides information about disaggregated revenue by timing of revenue recognition, (in thousands): Three Months Ended March 31, 2019 Product Royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ 199 $ - $ 16 $ 215 Product and services transferred over time - - 1,636 1,636 Total $ 199 $ - $ 1,652 $ 1,851 Three Months Ended March 31, 2018 Product Royalty Contract revenue revenue revenue Total Timing of revenue recognition: Products transferred at a point in time $ - $ 11 $ 99 $ 110 Product and services transferred over time - - 2,078 2,078 Total $ - $ 11 $ 2,177 $ 2,188 |
Costs in excess of billings and billings in excess of costs | The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands): March 31, December 31, 2019 2018 Accounts receivable, net $ 274 $ 476 Costs and estimated earnings in excess of billings on uncompleted contracts 1,199 987 Billings on uncompleted contracts in excess of related costs 5 - Other current liabilities 10,000 10,000 |
Schedule of contract assets and liabilities | Significant changes in the contract assets and the contract liabilities balances during the period are as follows (in thousands, except percentages): March 31, December 31, 2019 2018 $ Change % Change Contract assets $ 1,199 $ 987 $ 212 21.5 Contract liabilities (5) - (5) - Net contract assets (liabilities) $ 1,194 $ 987 $ 207 21.0 |
Transaction price allocated to the remaining performance obligations, expected timing | Additionally, the estimated revenue does not include amounts of variable consideration attributable to royalties or unexercised contract renewals (in thousands): Remainder of 2019 2020 Product revenue $ - $ - License and royalty revenue - - Contract revenue 1,301 - |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Tables Abstract | |
Inventory (Tables) | Inventory consists of the following: March 31, December 31, ( in thousands 2019 2018 Raw materials $ 32 $ 32 Finished goods 1,030 1,077 $ 1,062 $ 1,109 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Canceled/expired | |
Stock-based employee compensation expense | The following table summarizes the amount of share-based compensation expense by line item on the statements of operations: Three Months Ended March 31, ( in thousands 2019 2018 Cost of product revenue $ 1 $ - Research and development expense 123 179 Sales, marketing, general and administrative expense 227 141 $ 351 $ 320 |
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, 2019: Weighted- Weighted- Average Average Remaining Aggregate Exercise Contractual Intrinsic Options Shares Price Term (years) Value Outstanding as of March 31, 2019 4,494,000 $ 2.26 6.9 $ 20,000 Exercisable as of March 31, 2019 2,355,000 $ 2.94 5.3 $ 5,000 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of lease expense | The components of lease expense were as follows: Three Months Ended (in thousands) March 31, 2019 Operating lease expense $ 116 Finance lease expense: Amortization of leased assets 4 Interest on lease liabilities 1 Total finance lease expense 5 Total lease expense $ 121 |
Cash flow supplemental disclosures for leases | Supplemental cash flow information related to leases was as follows: Three Months Ended (in thousands) March 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 160 Operating cash flows from finance leases 1 Financing cash flows from finance leases 4 Right-of-use assets obtained in exchange for new lease obligations: Operating leases 1,638 Finance leases $ - |
Schedule of future minimum lease payments | As of March 31, 2019, maturities of lease liabilities were as follows: Operating Finance Years Ended December 31, leases leases 2019 $ 481 $ 21 2020 656 27 2021 676 9 2022 696 - 2023 175 - Thereafter - - Total minimum lease payments 2,684 57 Less: amount representing interest (296) (7) Present value of capital lease liabilities $ 2,388 $ 50 |
Lease guarantee future commitments | As of March 31, 2019, maturities of lease liabilities were as follows: Operating Finance Years Ended December 31, leases leases 2019 $ 481 $ 21 2020 656 27 2021 676 9 2022 696 - 2023 175 - Thereafter - - Total minimum lease payments 2,684 57 Less: amount representing interest (296) (7) Present value of capital lease liabilities $ 2,388 $ 50 |
Supplemental balance sheet information related to leases | Supplemental balance sheet information related to leases was as follows: (in thousands) March 31, 2019 Operating leases Operating lease right-of-use assets $ 1,559 Current portion of operating lease liability 642 Operating lease liability, net of current portion 1,746 Total operating lease liabilities $ 2,388 Finance leases Property and equipment, at cost $ 66 Accumulated depreciation (13) Property and equipment, net $ 53 Current portion of finance lease obligations $ 22 Finance lease obligations, net of current portion 28 Total finance lease liabilities $ 50 Weighted Average Remaining Lease Term Operating leases 4 years Finance leases 2 years Weighted Average Discount Rate Operating leases 6.0% Finance leases 13.8% |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss available for common shareholders | $ (8,068) | $ (7,132) |
Dilutive incremental share effect from: | ||
Weighted-average common shares outstanding | 101,971 | 78,610 |
Net loss per share - basic and diluted | $ (0.08) | $ (0.09) |
(Net Loss Per Share Convertible
(Net Loss Per Share Convertible Securities and Options Excluded (Narrative) (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Options and Warrants Exercisable | ||
Anti-dilutive shares | 4,494,000 | 6,946,000 |
Nonvested Restricted Stock Units | ||
Anti-dilutive shares | 1,490,000 | 185,000 |
Long-Term Contracts (Narrative)
Long-Term Contracts (Narrative) (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Oct. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Deferred revenue, classified within other currrent liabilities | $ 5 | $ 0 | |||
Display-Only | |||||
Upfront payment received | $ 5,000 | $ 5,000 | |||
Deferred Revenue, Description | In May 2018, we signed a five-year license agreement with a customer granting them exclusive license to our LBS technology for display-only applications. As part of the agreement, we received a first payment of $5.0 million in June 2018 and the second payment of $5.0 million in October 2018. The contract includes requirements that must be met in order to maintain exclusivity. If this customer acquires a customer, we expect orders for component sales. We may also receive payments for non-recurring engineering expenses associated with process and product transfer and qualification milestones. During the year ended December 31, 2018 we completed the performance obligations required by the contract. As a result, we recognized $10.0 million in license and royalty revenue during the year ended December 31, 2018. | ||||
LBS Display System | |||||
Contract revenue from development fees | $ 1,600 | $ 2,100 | |||
Deferred Revenue, Description | In April 2017, we signed a contract with a major technology company to develop an LBS display system. Under this agreement, we are working to develop a new generation of MEMS, ASICs and related firmware for a high resolution, LBS-based product that the technology company is planning to produce. Under the agreement, we received an upfront payment of $10.0 million in 2017 and may receive up to $15.1 million in fees for development work that is expected to span into the second quarter of 2019. Our receipt of the development fees is contingent on completion of milestones in 2017, 2018, and into the second quarter of 2019. As of March 31, 2019, we have received $12.3 million in fees for development work and recognized $13.7 million in revenue. Upon successful completion of the development program, if the major technology company decides to manufacture the product with the MicroVision display components, the $10.0 million upfront payment would be applied as a discount to future component purchases from us. If the contract is terminated by the technology company for our failure to meet milestones, the $10.0 million upfront payment is subject to repayment. We are recognizing revenue on the $15.1 million in development fees over time based on the proportion of total cost expended (under Topic 606, the "input method") to the total cost expected to complete the contract performance obligation. During the quarter ended March 31, 2019, we have recognized $1.6 million of contract revenue from development fees on this agreement compared to $2.1 million during the quarter ended March 31, 2018. We have an amount equal to the $10.0 million upfront payment classified as an other current liability on the balance sheet. | ||||
Deferred revenue, classified within other currrent liabilities | $ 10,000 | $ 10,000 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregated revenue | $ 1,851 | $ 2,188 |
Product revenue | ||
Disaggregated revenue | 199 | 0 |
License and royalty revenue | ||
Disaggregated revenue | 0 | 11 |
Contract Revenue | ||
Disaggregated revenue | 1,652 | 2,177 |
Transferred at Point in Time | ||
Disaggregated revenue | 215 | 110 |
Transferred at Point in Time | Product revenue | ||
Disaggregated revenue | 199 | 0 |
Transferred at Point in Time | Royalty revenue | ||
Disaggregated revenue | 0 | 11 |
Transferred at Point in Time | Contract Revenue | ||
Disaggregated revenue | 16 | 99 |
Transferred over Time | ||
Disaggregated revenue | 1,636 | 2,078 |
Transferred over Time | Product revenue | ||
Disaggregated revenue | 0 | 0 |
Transferred over Time | Royalty revenue | ||
Disaggregated revenue | 0 | 0 |
Transferred over Time | Contract Revenue | ||
Disaggregated revenue | $ 1,636 | $ 2,078 |
Revenue Recognition - Contract
Revenue Recognition - Contract Balances with Contract Customers (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts receivable, net | $ 274 | $ 476 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,199 | 987 |
Other current assets | 1,091 | 1,311 |
Billings on uncompleted contracts in excess of related costs | 5 | 0 |
Other current liabilities | 10,095 | 10,154 |
Contracts with Customers | ||
Accounts receivable, net | 274 | 476 |
Costs and estimated earnings in excess of billings on uncompleted contracts | 1,199 | 987 |
Billings on uncompleted contracts in excess of related costs | 5 | 0 |
Other current liabilities | $ 10,000 | $ 10,000 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Significant Changes in Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Contractors [Abstract] | ||
Contract assets | $ 1,199 | $ 987 |
Change in Contract Asset | $ 212 | |
Percent Change in Contract Asset | 21.50% | |
Contract liabilities | $ (5) | 0 |
Change in Contract Liability | $ (5) | |
Percent Change in Contract Liability | 0.00% | |
Net contract assets (liabilities) | $ 1,194 | $ 987 |
Change in Net Contract Assets (Liabilities) | $ 207 | |
Percent Change in Net Contract Assets (Liabilities) | 21.00% |
Revenue Recognition - Estimated
Revenue Recognition - Estimated Revenue Expected to be Recognized in Future Related to Performance Obligations (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Product revenue | Remainder 2019 | |
Revenue, Remaining Performance Obligation | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2019 |
Product revenue | 2020 | |
Revenue, Remaining Performance Obligation | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2020 |
License and royalty revenue | Remainder 2019 | |
Revenue, Remaining Performance Obligation | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2019 |
License and royalty revenue | 2020 | |
Revenue, Remaining Performance Obligation | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2020 |
Contract Revenue | Remainder 2019 | |
Revenue, Remaining Performance Obligation | $ 1,301 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2019 |
Contract Revenue | 2020 | |
Revenue, Remaining Performance Obligation | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Year | 2020 |
Concentration of Sales to Major
Concentration of Sales to Major Customers) (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total revenue | $ 1,851 | $ 2,188 |
Customer Revenue Concentration | ||
Total revenue | $ 1,600 | $ 2,100 |
Concentration Risk, Percentage | 88.00% | 95.00% |
Second Commercial Customer | ||
Total revenue | $ 199,000 | |
Concentration Risk, Percentage | 11.00% | |
Accounts Receivable Concentration | ||
Accounts receivable | $ 288,000 | |
Concentration Risk, Percentage | 98.00% |
Inventory Components (Details)
Inventory Components (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Components | ||
Raw materials | $ 32,000 | $ 32,000 |
Finished goods | 1,030,000 | 1,077,000 |
Inventory, net | $ 1,062,000 | $ 1,109,000 |
Inventory (Narrative) (Details)
Inventory (Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Narrative | ||
Material classified as other assets | $ 1.4 | $ 1.4 |
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, 2019 | Mar. 31, 2018 | |
Share-based employee compensation expense | $ 351 | $ 320 |
Cost of product revenue | ||
Share-based employee compensation expense | 1 | 0 |
Research and development expense | ||
Share-based employee compensation expense | 123 | 179 |
Sales, marketing, general and administrative expense | ||
Share-based employee compensation expense | $ 227 | $ 141 |
Shared-Based Compensation (Opti
Shared-Based Compensation (Options Activity and Position) (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Shared-based Compensation Options Activity And Position | |
Outstanding shares | shares | 4,494,000 |
Weighted-average exercise price of options outstanding | $ / shares | $ 2.26 |
Weighted-average remaining contractual term (in years) of options outstanding | 6 years 324 days |
Aggregate intrinsic value of options outstanding | $ | $ 20,000 |
Exercisable shares | shares | 2,355,000 |
Weighted-average exercise price of options exercisable | $ / shares | $ 2.94 |
Weighted-average remaining contractual term (in years) of options exercisable | 5 years 108 days |
Aggregate intrinsic value of options exercisable | $ | $ 5,000 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Employee Stock Options | |
Unrecognized compensation cost related to share-based compensation | $ 1,400,000 |
Weighted-average service period, years | 2 years 36 days |
Restricted Stock Rights | |
Unrecognized compensation cost related to share-based compensation | $ 456,000 |
Weighted-average service period, years | 2 years 36 days |
PSU | |
Unrecognized compensation cost related to share-based compensation | $ 15,000 |
Weighted-average service period, years | 2 years 72 days |
Components of Lease Expense (De
Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 116 |
Finance lease expense: | |
Amortization of leased assets | 4 |
Interest on lease liabilities | 1 |
Total finance lease cost | 5 |
Total lease expense | $ 121 |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities: | |
Operating cash flows from operating leases | $ 160 |
Operating cash flows from finance leases | 1 |
Financing cash flows from finance leases | 4 |
Right-of-use assets obtained in exchange for lease obligations: | |
Operating leases | 1,638 |
Finance leases | $ 0 |
Supplemental Balance Sheet Info
Supplemental Balance Sheet Information Related to Leases (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases | ||
Operating lease right-of-use assets | $ 1,559 | $ 0 |
Total operating lease liabilities | 2,388 | |
Finance Leases | ||
Property and equipment, net | 2,675 | $ 2,993 |
Total finance lease liabilities | $ 50 | |
Weighted Average Remaining Lease Term | ||
Operating leases | 4 years | |
Finance leases | 2 years | |
Weighted Average Discount Rate | ||
Operating leases | 6.00% | |
Finance leases | 16.20% | |
Finance Lease [Member] | ||
Finance Leases | ||
Property and equipment, at cost | $ 66 | |
Accumulated depreciation | (13) | |
Property and equipment, net | 53 | |
Other Noncurrent Liabilities [Member] | ||
Finance Leases | ||
Total finance lease liabilities | 22 | |
Other Current Liabilities [Member] | ||
Operating Leases | ||
Total operating lease liabilities | 642 | |
Finance Leases | ||
Total finance lease liabilities | 28 | |
Operating Lease Liabilities [Member] | ||
Operating Leases | ||
Total operating lease liabilities | $ 1,746 |
Maturities of Lease Liabilities
Maturities of Lease Liabilities (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Years Ended December 31, | |
Operating leases, 2019 | $ 481 |
Operating leases, 2020 | 656 |
Operating leases 2021 | 676 |
Operating leases, 2022 | 696 |
Operating leases, 2023 | 175 |
Operating leases, thereafter | 0 |
Operating leases, total mimimum lease payments | 2,684 |
Operating leases, less amount representing interest | (296) |
Operating leases present value | 2,388 |
Finance leases, 2019 | 21 |
Finance leases, 2020 | 27 |
Finance leases, 2021 | 9 |
Finance leases, 2022 | 0 |
Finance leases, 2023 | 0 |
Finance leases, thereafter | 0 |
Finance leases, total minimum lease payments | 57 |
Finance leases, less amount representing interest | (7) |
Finance leases present value | $ 50 |
Commitments and Contingencies (
Commitments and Contingencies (Adverse Purchase Commitments Narrative) (Details) $ in Millions | Mar. 31, 2019USD ($) |
Contract with Customer, Assets and Liabilities, Net, Change | |
Open purchase obligations | $ 5.2 |
Common Stock Issuance (Narrativ
Common Stock Issuance (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2019USD ($)shares | |
Cash received from stock sale, before issuance costs | $ 1,168,000 |
Registered January 2019 | |
Number of shares of common stock issued | shares | 2,000,000 |
Cash received from stock sale, before issuance costs | $ 1,200,000 |
Stock issuance costs | $ 26,000 |
Terms and provisions | In January 2019, we raised $1.2 million before issuance costs of approximately $26,000 through a registered direct offering of 2.0 million shares of our common stock to Shehnee Lawrence Farhi. |
Public December 2018 | |
Number of shares of common stock issued | shares | 7,000,000 |
Cash received from stock sale, before issuance costs | $ 4,200,000 |
Stock issuance costs | $ 524,000 |
Terms and provisions | In December 2018, we raised $4.2 million before issuance costs of approximately $524,000 through an underwritten public offering of 7.0 million shares of our common stock. |
Public June 2018 | |
Number of shares of common stock issued | shares | 14,400,000 |
Cash received from stock sale, before issuance costs | $ 18,000,000 |
Stock issuance costs | $ 1,400,000 |
Terms and provisions | In June 2018, we raised $18.0 million before issuance costs of approximately $1.4 million through an underwritten public offering of 14.4 million shares of our common stock. |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) | 1 Months Ended |
Apr. 30, 2019 | |
$6.24 - $10.24 | |
Subsequent Event, Date | Apr. 1, 2019 |
Subsequent Event, Description | In April 2019, we entered into an agreement with Lincoln Park. Proceeds from any sales of stock are expected to be used for general corporate purposes. Under the terms of the agreement, Lincoln Park initially purchased $1.0 million in shares of common stock at a purchase price of $0.9821. In addition, for a period of 24 months, we have the right, at our sole discretion, to sell up to $10.0 million of additional common stock to Lincoln Park, subject to certain limitations, based on the prevailing market prices of our shares at the time of each sale. Lincoln Park has no right to require any sales and is obligated to purchase the common stock as directed by us, subject to certain limitations set forth in the agreement. Lincoln Park has agreed not to cause or engage in any manner whatsoever, any direct or indirect short selling or hedging of our shares of common stock. In consideration for entering into the agreement, we have issued 250,000 shares of common stock to Lincoln Park as a commitment fee. No warrants, derivatives, or other share classes are associated with this agreement. In April 2019, we raised an additional $2.0 million before issuance costs through a registered direct offering of 2.3 million shares of our common stock to a private investor. This transaction is expected to close on April 26, 2019. |