Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Feb. 27, 2015 | Jun. 30, 2014 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | FALSE | ||
Document Period End Date | 31-Dec-14 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | BIOL | ||
Entity Registrant Name | BIOLASE, INC | ||
Entity Central Index Key | 811240 | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Smaller Reporting Company | ||
Entity Common Stock, Shares Outstanding | 58,152,792 | ||
Entity Public Float | $65,540,168 |
Consolidated_Balance_Sheets
Consolidated Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $31,560 | $1,440 |
Accounts receivable, less allowance of $1,711 and $573 in 2014 and 2013, respectively | 9,004 | 11,127 |
Inventory, net | 12,508 | 11,378 |
Prepaid expenses and other current assets | 1,726 | 1,909 |
Total current assets | 54,798 | 25,854 |
Property, plant, and equipment, net | 1,295 | 1,826 |
Intangible assets, net | 114 | 183 |
Goodwill | 2,926 | 2,926 |
Other assets | 270 | 249 |
Total assets | 59,403 | 31,038 |
Current liabilities: | ||
Lines of credit | 4,633 | |
Accounts payable | 8,357 | 8,560 |
Accrued liabilities | 5,188 | 4,997 |
Customer deposits | 112 | 285 |
Deferred revenue, current portion | 2,494 | 3,464 |
Total current liabilities | 16,151 | 21,939 |
Deferred income taxes | 677 | 617 |
Deferred revenue, long-term | 1 | |
Warranty accrual, long-term | 519 | 0 |
Total liabilities | 17,347 | 22,557 |
Commitments and contingencies (Note 7) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001; 1,000 shares authorized, no shares issued and outstanding | ||
Common stock, par value $0.001; 100,000 and 50,000 shares authorized in 2014 and 2013, respectively, 58,115 and 37,336 shares issued in 2014 and 2013, respectively; 58,115 and 35,372 shares outstanding in 2014 and 2013, respectively | 58 | 38 |
Additional paid-in capital | 185,231 | 148,866 |
Accumulated other comprehensive loss | -557 | -274 |
Accumulated deficit | -142,676 | -123,750 |
Stockholders' equity before treasury stock | 42,056 | 24,880 |
Treasury stock (Note 8) | -16,399 | |
Total stockholders' equity | 42,056 | 8,481 |
Total liabilities and stockholders' equity | $59,403 | $31,038 |
Consolidated_Balance_Sheets_Pa
Consolidated Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Statement Of Financial Position [Abstract] | ||
Allowance for accounts receivable | $1,711 | $573 |
Preferred stock, par value | $0.00 | $0.00 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 100,000,000 | 50,000,000 |
Common stock, shares issued | 58,115,000 | 37,336,000 |
Common stock, shares outstanding | 58,115,000 | 35,372,000 |
Consolidated_Statements_Of_Ope
Consolidated Statements Of Operations And Comprehensive Loss (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statement Consolidated Statements Of Operations And Comprehensive Loss [Abstract] | |||
Products and services revenue | $47,511 | $56,186 | $57,191 |
License fees and royalty revenue | 145 | 244 | 165 |
Net revenue | 47,656 | 56,430 | 57,356 |
Cost of revenue | 29,484 | 34,900 | 30,878 |
Gross profit | 18,172 | 21,530 | 26,478 |
Operating expenses: | |||
Sales and marketing | 16,375 | 18,682 | 16,250 |
General and administrative | 14,854 | 9,377 | 8,075 |
Engineering and development | 4,577 | 4,029 | 4,684 |
Excise tax | 307 | 438 | |
Total operating expenses | 36,113 | 32,526 | 29,009 |
Loss from operations | -17,941 | -10,996 | -2,531 |
Loss on foreign currency transactions | -415 | -50 | -175 |
Interest expense, net | -458 | -600 | -239 |
Non-operating loss, net | -873 | -650 | -414 |
Loss before income tax provision (benefit) | -18,814 | -11,646 | -2,945 |
Income tax provision (benefit) | 112 | -164 | 111 |
Net loss | -18,926 | -11,482 | -3,056 |
Other comprehensive income (loss) items: | |||
Foreign currency translation adjustments | -283 | 46 | 40 |
Comprehensive loss | ($19,209) | ($11,436) | ($3,016) |
Net loss per share: | |||
Basic | ($0.45) | ($0.35) | ($0.10) |
Diluted | ($0.45) | ($0.35) | ($0.10) |
Shares used in the calculation of net loss per share: | |||
Basic | 42,232 | 32,768 | 32,162 |
Diluted | 42,232 | 32,768 | 32,162 |
Consolidated_Statements_Of_Sha
Consolidated Statements Of Shareholders' Equity (USD $) | Total | Common Stock and Additional Paid-in Capital | Treasury Stock | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Balance at Dec. 31, 2011 | $12,569,000 | $138,540,000 | ($16,399,000) | ($360,000) | ($109,212,000) |
Treasury Stock Shares at Dec. 31, 2011 | -1,964,000 | ||||
Balance, shares at Dec. 31, 2011 | 32,502,000 | ||||
Exercise of stock options, net, shares | 214,000 | 214,000 | |||
Exercise of stock options, net | 455,000 | 455,000 | |||
Stock-based compensation | 1,600,000 | 1,600,000 | |||
Non-employee equity instruments | 23,000 | 23,000 | |||
Other compensation | 250,000 | 250,000 | |||
Stock repurchase, shares | -133,000 | ||||
Stock repurchase | -235,000 | -235,000 | |||
Warrant issued in connection with lines of credit | 142,000 | 142,000 | |||
Exercise of warrants, shares | 31,000 | ||||
Exercise of warrants | 6,000 | 6,000 | |||
Stock dividends | 634,000 | ||||
Net loss | -3,056,000 | -3,056,000 | |||
Foreign currency translation adjustments | 40,000 | 40,000 | |||
Balance at Dec. 31, 2012 | 11,794,000 | 140,781,000 | -16,399,000 | -320,000 | -112,268,000 |
Treasury Stock Shares at Dec. 31, 2012 | -1,964,000 | ||||
Balance, shares at Dec. 31, 2012 | 33,248,000 | ||||
Exercise of stock options, net, shares | 343,000 | 343,000 | |||
Exercise of stock options, net | 709,000 | 709,000 | |||
Stock-based compensation | 1,609,000 | 1,609,000 | |||
Non-employee equity instruments | 106,000 | 106,000 | |||
Other compensation | 250,000 | 250,000 | |||
Issuance of stock, net, shares | 3,028,000 | ||||
Issuance of stock, net | 5,169,000 | 5,169,000 | |||
Warrant issued in connection with lines of credit | 280,000 | 280,000 | |||
Exercise of warrants, shares | 50,000 | ||||
Stock dividends | 667,000 | ||||
Net loss | -11,482,000 | -11,482,000 | |||
Foreign currency translation adjustments | 46,000 | 46,000 | |||
Balance at Dec. 31, 2013 | 8,481,000 | 148,904,000 | -16,399,000 | -274,000 | -123,750,000 |
Treasury Stock Shares at Dec. 31, 2013 | -1,964,000 | ||||
Balance, shares at Dec. 31, 2013 | 37,336,000 | 37,336,000 | |||
Exercise of stock options, net, shares | 153,000 | 153,000 | |||
Exercise of stock options, net | 310,000 | 310,000 | |||
Stock-based compensation | 1,233,000 | 1,233,000 | |||
Other compensation | 123,000 | 123,000 | |||
Issuance of stock, net, shares | 22,359,000 | ||||
Issuance of stock, net | 51,118,000 | 51,118,000 | |||
Exercise of warrants, shares | 39,000 | ||||
Stock dividends | 192,000 | ||||
Net loss | -18,926,000 | -18,926,000 | |||
Foreign currency translation adjustments | -283,000 | -283,000 | |||
Retirement of treasury stock, shares | 1,964,000 | -1,964,000 | |||
Retirement of treasury stock | -16,399,000 | 16,399,000 | |||
Balance at Dec. 31, 2014 | $42,056,000 | $185,289,000 | ($557,000) | ($142,676,000) | |
Balance, shares at Dec. 31, 2014 | 58,115,000 | 58,115,000 |
Consolidated_Statements_Of_Cas
Consolidated Statements Of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash Flows From Operating Activities: | |||
Net loss | ($18,926) | ($11,482) | ($3,056) |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | |||
Depreciation and amortization | 696 | 601 | 513 |
Loss on disposal of assets, net | 9 | 15 | |
Provision for bad debts | 1,295 | 291 | 241 |
Provision for inventory excess and obsolescence | 585 | 1,132 | 330 |
Amortization of discount on lines of credit | 200 | 179 | 43 |
Amortization of debt issuance costs | 128 | 197 | 91 |
Stock-based compensation | 1,233 | 1,609 | 1,600 |
Other equity instruments compensation | 106 | 23 | |
Other non-cash compensation | 123 | 250 | 250 |
Deferred income taxes | 60 | -30 | 61 |
Incurred and unpaid interest expense | 27 | 19 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | 826 | 264 | -3,222 |
Inventory | -1,715 | -1,436 | -160 |
Prepaid expenses and other current assets | -21 | 56 | 450 |
Customer deposits | -174 | -297 | 417 |
Accounts payable and accrued liabilities | 451 | -999 | -347 |
Deferred revenue | -971 | 236 | 1,068 |
Net cash and cash equivalents used in operating activities | -16,201 | -9,296 | -1,664 |
Cash Flows From Investing Activities: | |||
Purchases of property, plant, and equipment | -198 | -675 | -808 |
Proceeds from disposal of long-lived assets | 1 | 124 | |
Purchased other intangible assets | -10 | -14 | |
Net cash and cash equivalents used in investing activities | -197 | -685 | -698 |
Cash Flows From Financing Activities: | |||
Borrowings under lines of credit | 16,875 | 35,100 | 16,600 |
Payments under lines of credit | -21,508 | -32,104 | -14,963 |
Payment of debt issuance costs | -45 | -57 | -304 |
Proceeds from exercise of warrants | 6 | ||
Proceeds from equity offering, net of expenses | 51,118 | 5,201 | |
Stock repurchase | -235 | ||
Proceeds from exercise of stock options | 312 | 707 | 455 |
Net cash and cash equivalents provided by financing activities | 46,752 | 8,847 | 1,559 |
Effect of exchange rate changes | -234 | 31 | 39 |
Increase (decrease) in cash and cash equivalents | 30,120 | -1,103 | -764 |
Cash and cash equivalents, beginning of year | 1,440 | 2,543 | 3,307 |
Cash and cash equivalents, end of year | 31,560 | 1,440 | 2,543 |
Supplemental cash flow disclosure: | |||
Interest paid | 148 | 220 | 88 |
Income taxes paid | 52 | 47 | 62 |
Supplemental disclosure of non-cash transactions: | |||
Intangible assets acquired for accounts receivable reduction | $200 |
Basis_of_Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2014 | |
Accounting Policies [Abstract] | |
Basis of Presentation | NOTE 1 — BASIS OF PRESENTATION |
The Company | |
BIOLASE, Inc. (“BIOLASE” or the “Company”) incorporated in Delaware in 1987, is a medical device company that develops, manufactures, markets, and sells laser systems in dentistry and medicine and also markets, sells, and distributes dental imaging equipment, including cone beam digital x-rays and CAD/CAM intra-oral scanners, in-office, chair-side milling machines and three dimensional (“3-D”) printers. | |
Basis of Presentation | |
The consolidated financial statements include the accounts of BIOLASE, Inc. and its wholly-owned subsidiaries. The Company has eliminated all material intercompany transactions and balances in the accompanying consolidated financial statements. Certain amounts for prior years have been reclassified to conform to the current year presentation. | |
Use of Estimates | |
The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U. S. GAAP”) requires the Company to make estimates and assumptions that affect amounts reported in the consolidated financial statements and the accompanying notes. Significant estimates in these consolidated financial statements include allowances on accounts receivable, inventory and deferred taxes, as well as estimates for accrued warranty expenses, goodwill and the ability of goodwill to be realized, revenue deferrals for multiple element arrangements, effects of stock-based compensation and warrants, contingent liabilities and the provision or benefit for income taxes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ materially from those estimates. | |
Fair Value of Financial Instruments | |
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market (or, if none exists, the most advantageous market) for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value is based on assumptions that market participants would use, including a consideration of nonperformance risk. Under the accounting guidance for fair value hierarchy there are three levels of measurement inputs. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable, either directly or indirectly, other than Level 1. Level 3 inputs are unobservable due to little or no corroborating market data. | |
The Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value because of the short maturity of these items. Financial instruments consisting of lines of credit approximate fair value, as the interest rates associated with the lines of credit approximates the market rates for debt securities with similar terms and risk characteristics. | |
Concentration of credit risk, interest rate risk and foreign currency exchange rate risk | |
Financial instruments which potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalents and restricted cash with established commercial banks. At times, balances may exceed federally insured limits. To minimize the risk associated with trade accounts receivable, management performs ongoing credit evaluations of customers’ financial condition and maintains relationships with the Company’s customers that allow management to monitor current changes in business operations so the Company can respond as needed. The Company does not, generally, require customers to provide collateral before it sells them its products. However it has required certain distributors to make prepayments for significant purchases of products. For the years ended December 31, 2014, 2013, and 2012, worldwide sales to the Company’s largest distributor, Henry Schein, Inc. (“HSIC”), accounted for approximately 6%, 5%, and 3%, respectively, of our net sales. | |
Substantially all of the Company’s revenue is denominated in U.S. dollars, including sales to international distributors. Only a small portion of its revenue and expenses is denominated in foreign currencies, principally the Euro and Indian Rupee. The Company’s foreign currency expenditures primarily consist of the cost of maintaining offices, including the facilities, consulting services and employee-related costs. Through the year ended December 31, 2014, the Company has not entered into any hedging contracts. Future fluctuations in the value of the U.S. dollar may affect the price competitiveness of the Company’s products outside the United States. | |
Outstanding balances on the Company’s lines of credit expose it to variable interest rate risks associated with fluctuations in the daily prime rate and LIBOR rate. Under the Company’s current policies, it does not use interest rate derivative instruments to manage exposure to interest rate changes. Increases in the daily prime rate or LIBOR rate would increase the costs of borrowing and accordingly, the interest expense the Company must pay. However, as of December 31, 2014, the Company did not have a line of credit facility. | |
Liquidity and Management’s Plans | |
The Company has suffered recurring losses from operations and has not generated cash from operations for the three years ended December 31, 2014. During the year ended December 31, 2014, the principle sources of liquidity for the Company were its available borrowing capacity on the lines of credit with Comerica Bank and the net proceeds from the February 10, 2014, July 22, 2014, and November 7, 2014 sale by the Company of $4.8 million, $11.5 million, and $34.8 million respectively, of unregistered shares of Company common stock discussed below. | |
At December 31, 2014, the Company had approximately $38.6 million in working capital. The Company’s principal sources of liquidity at December 31, 2014 consisted of approximately $31.6 million in cash and cash equivalents and $9.0 million of net accounts receivable. | |
The available borrowing capacity on the Company’s lines of credit with Comerica Bank, discussed further in Note 5 — Lines of Credit and Other Borrowings, and the net proceeds from equity transactions, discussed further in Note 8 – Stockholders’ Equity, have been the Company’s principal sources of liquidity during the year ended December 31, 2014. On July 28, 2014, the Company repaid all amounts outstanding under its revolving credit facilities with Comerica Bank, including principal, accrued interest, and fees which totaled approximately $2.9 million and the credit facilities were terminated. | |
On November 7, 2014, the Company completed a private placement with several institutional and individual investors, and certain of its directors and officers, under which the Company agreed to sell an aggregate of 14,162,873 unregistered shares of its common stock at the price of $2.39 per share, the closing price of Company common stock on November 3, 2014, and warrants to purchase up to an aggregate of 9,205,862 unregistered shares of its common stock at an exercise price of $4.00 per share. Gross proceeds from the sale were $35.0 million, and net proceeds, after offering expenses of approximately $235,000, were approximately $34.8 million. The warrants become exercisable on May 7, 2015, six months after the closing of the private placement, and have a term of three years from the date of issuance. The Company is using the proceeds for working capital and general corporate purposes. In connection with the registration rights granted to these investors, the Company filed a registration statement on Form S-3 with the SEC, which was declared effective on December 12, 2014. | |
The Company completed a private placement on July 22, 2014 with several institutional and individual investors, and several of the Company’s directors and officers, wherein the Company sold 6,250,000 unregistered shares of its common stock at a price of $1.92 per share (the closing price of Company common stock on July 18, 2014). Gross proceeds from the sale totaled $12 million, and net proceeds, after offering expenses of approximately $462,000, were approximately $11.5 million. In connection with the registration rights granted to these investors, the Company filed a registration statement on Form S-3 with the SEC, which was declared effective on September 18, 2014. | |
On February 10, 2014, the Company entered into a subscription agreement with Oracle Partners L.P., Oracle Institutional Partners, L.P., and Oracle Ten Fund Master, L.P., under which the Company offered an aggregate of 1,945,525 unregistered shares of Company common stock in a private placement at a price of $2.57 per share. Gross proceeds from the sale were $5.0 million, and net proceeds, after offering expenses of approximately $188,000, were approximately $4.8 million. The Company used the proceeds to repay the Company’s lines of credit and for working capital and general corporate purposes. | |
Additional capital requirements may depend on many factors, including, among other things, the rate at which the Company’s business grows, demands for working capital, manufacturing capacity, and any acquisitions that the Company may pursue. From time to time, the Company could be required, or may otherwise attempt, to raise capital through either equity or debt offerings. The Company cannot provide assurance that it will be able to successfully enter into any such equity or debt financings in the future or that the required capital would be available on acceptable terms, if at all, or that any such financing activity would not be dilutive to its stockholders. |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Summary of Significant Accounting Policies | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ||||||||||||
Cash and Cash Equivalents | |||||||||||||
The Company considers all highly liquid investments with maturities of three months or less when purchased, as cash equivalents. Cash equivalents are carried at cost, which approximates fair market value. | |||||||||||||
Accounts Receivable | |||||||||||||
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company evaluates its allowance for doubtful accounts based upon its knowledge of customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis which incorporates input from sales, service, and finance personnel. The review process evaluates all account balances with amounts outstanding more than 90 days from the due date and other specific amounts for which information obtained indicates that the balance may be uncollectible. The allowance for doubtful accounts is adjusted based on such evaluation, with a corresponding provision included in general and administrative expenses. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers. | |||||||||||||
Inventory | |||||||||||||
The Company values inventory at the lower of cost, determined using the first-in, first-out method, or market. The carrying value of inventory is evaluated periodically for excess quantities and obsolescence. Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions. The allowance is adjusted based on such evaluation, with a corresponding provision included in cost of revenue. Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the Company’s allocation of fixed production overhead is based on the normal capacity of our production facilities. | |||||||||||||
Property, Plant, and Equipment | |||||||||||||
Property, plant, and equipment is stated at acquisition cost less accumulated depreciation. Maintenance and repairs are expensed as incurred. Upon sale or disposition of assets, any gain or loss is included in the consolidated statements of operations. | |||||||||||||
The cost of property, plant, and equipment is depreciated using the straight-line method over the following estimated useful lives of the respective assets, except for leasehold improvements, which are depreciated over the lesser of the estimated useful lives of the respective assets or the related lease terms. | |||||||||||||
Building | 30 years | ||||||||||||
Leasehold improvements | 3 to 5 years | ||||||||||||
Equipment and computers | 3 to 5 years | ||||||||||||
Furniture and fixtures | 5 years | ||||||||||||
Depreciation expense for the years ended December 31, 2014, 2013, and 2012 totaled approximately $627,000, $484,000, and $377,000, respectively. | |||||||||||||
Goodwill and Other Intangible Assets | |||||||||||||
Goodwill and other intangible assets with indefinite lives are not subject to amortization but are evaluated for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company operates in one operating segment and has one operating unit; therefore goodwill is tested for impairment at the consolidated level against the fair value of the Company. The fair value of a reporting unit refers to the amount at which the unit as a whole could be bought or sold in a current transaction between willing parties. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for measurement, if available. Management assesses potential impairment on an annual basis on June 30th and compares the Company’s market capitalization to its carrying amount, including goodwill. A significant decrease in the Company’s stock price could indicate a material impairment of goodwill which, after further analysis, could result in a material charge to operations. If goodwill is considered impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the goodwill exceeds the implied fair value of that goodwill. Inherent in the Company’s fair value determinations are certain judgments and estimates, including projections of future cash flows, the discount rate reflecting the inherent risk in future cash flows, the interpretation of current economic indicators and market valuations, and strategic plans with regard to operations. A change in these underlying assumptions could cause a change in the results of the tests, which could cause the fair value of the reporting unit to be less than its respective carrying amount. | |||||||||||||
Costs incurred to acquire and successfully defend patents, and costs incurred to acquire trademarks and trade names are capitalized. Costs related to the internal development of technologies that are ultimately patented are expensed as incurred. Intangible assets, except those determined to have an indefinite life, are amortized using the straight-line method or over management’s best estimate of the pattern of economic benefit over the estimated useful life of the assets. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. | |||||||||||||
Long-Lived Assets | |||||||||||||
The carrying values of long-lived assets, including intangible assets subject to amortization, are reviewed when indicators of impairment, such as reductions in demand or significant economic slowdowns, are present. Reviews are performed to determine whether carrying value of an asset is impaired based on comparisons to undiscounted expected future cash flows. If this comparison indicates that there is impairment, the impaired asset is written down to fair value, which is typically calculated using discounted expected future cash flows. Impairment is based on the excess of the carrying amount over the fair value of those assets. | |||||||||||||
Other Comprehensive (Loss) Income | |||||||||||||
Other comprehensive (loss) income encompasses the change in equity from transactions and other events and circumstances from non-owner sources and is included as a component of stockholders’ equity but is excluded from net (loss) income. Accumulated other comprehensive gain (loss) is comprised of foreign currency translation adjustments. | |||||||||||||
Foreign Currency Translation and Transactions | |||||||||||||
Transactions of the Company’s German, Spanish, Australian, and Indian subsidiaries are denominated in their local currencies. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at end-of-period exchange rates. Translation gains or losses are shown as a component of accumulated other comprehensive gain (loss) in stockholders’ equity. Gains and losses resulting from foreign currency transactions, which are denominated in a currency other than the entity’s functional currency, are included in the consolidated statements of operations. | |||||||||||||
Revenue Recognition | |||||||||||||
The Company’s products are sold in North America directly to customers through its direct sales force and through non-exclusive distributors. The Company sells its products internationally through exclusive and non-exclusive distributors as well as directly to customers in certain countries. Sales are recorded upon shipment from the Company’s facility and payment of its invoices is generally due within 90 days or less. Internationally, the Company primarily sells products through independent distributors. Revenue is recorded based on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the customer or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. Revenue is recorded for all sales upon shipment assuming all other revenue recognition criteria are met. | |||||||||||||
Sales of the Company’s laser systems include separate deliverables consisting of the product, disposables used with the laser systems, installation, and training. The Company applies the relative selling price method, which requires that arrangement consideration be allocated at the inception of an arrangement to all deliverables using the relative selling price method. This requires the Company to use (estimated) selling prices of each of the deliverables in the total arrangement. The sum of those prices is then compared to the arrangement, and any difference is applied to the separate deliverable ratably. This method also establishes a selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objective evidence (“VSOE”) if available, (2) third-party evidence if VSOE is not available, and (3) estimated selling price if neither VSOE nor third-party evidence is available. VSOE is determined based on the value the Company sells the undelivered element to a customer as a stand-alone product. Revenue attributable to the undelivered elements is included in deferred revenue when the product is shipped and is recognized when the related service is performed. Disposables not shipped at time of sale and installation services are typically shipped or installed within 30 days. Training is included in deferred revenue when the product is shipped and is recognized when the related service is performed or upon the appropriate expiration of time offered under the agreement. The adoption of the relative selling price method does not significantly change the value of revenue recognized. Deferred revenue attributable to undelivered elements, which primarily consists of training, totaled approximately $952,000 and $1.8 million as of December 31, 2014 and 2013, respectively. | |||||||||||||
Key judgments of the Company’s revenue recognition include the collectability of payment from the customer, the satisfaction of all elements of the arrangement having been delivered, and that no additional customer credits and discounts are needed. The Company evaluates the customer’s credit worthiness prior to the shipment of the product. Based on the assessment of the credit information available, the Company may determine the credit risk is higher than normally acceptable, and will either decline the purchase or defer the revenue until payment is reasonably assured. Future obligations required at the time of sale may also cause the Company to defer the revenue until the obligation is satisfied. | |||||||||||||
Although all sales are final, the Company accepts returns of products in certain, limited circumstances and records a provision for sales returns based on historical experience concurrent with the recognition of revenue. The sales returns allowance is recorded as a reduction of accounts receivable and revenue. As of December 31, 2014 and 2013, $110,000 and $110,000, respectively, was recorded as a reduction of accounts receivable for sales returns. | |||||||||||||
Extended warranty contracts, which are sold to laser and certain imaging customers, are recorded as revenue on a straight-line basis over the period of the contracts, which is typically one year. Included in deferred revenue for each of the years ended December 31, 2014 and 2013, was approximately $1.5 million and $1.6 million, respectively, for extended warranty contracts. | |||||||||||||
For sales transactions involving used laser trade-ins, the Company records the purchased trade-ins as inventory at the fair value of the asset surrendered with the offset to accounts receivable. In determining the estimated fair value of used laser trade-ins, Management makes an assessment of usable parts, key components, and consider the ultimate resale value of the certified pre-owned (or “CPO”) laser with applicable margins. The Company sells these CPO laser trade-ins as refurbished lasers following its laser system revenue recognition policy. Trade-in rights are not established nor negotiated with customers during the initial sales transaction of the original lasers. Trade-in rights are promotional events used at Management’s discretion to encourage existing laser customers to purchase new lasers by offering perceived discounts in exchange for customers trading in original lasers. A customer is not required to trade-in a laser nor is the Company required to accept a trade-in, however, the promotional value offered in exchange for the trade-in laser is not offered without a laser trade-in. The transaction is treated as a monetary transaction as each sale transaction involving a customer trade-in includes significant boot of greater than 25% of the fair value of the exchange. As a monetary transaction, the sale is recognized following the Company’s laser system revenue recognition policy. There have been no sales transactions in which the cash consideration was less than 25% of the total transaction value. | |||||||||||||
From time to time, the Company may offer sales incentives and promotions on its products. The cost of sales incentives are recorded at the date at which the related revenue is recognized as a reduction in revenue, an increase in cost of goods sold or a selling expense, as applicable, or later, in the case of incentives offered after the initial sale has occurred. | |||||||||||||
Provision for Warranty Expense | |||||||||||||
The Company provides warranties against defects in materials and workmanship of its laser systems for specified periods of time. For the year ended December 31, 2014, WaterLase and Diode systems sold domestically are covered by the Company’s warranty for a period of two years. For the years ended December 31, 2013 and 2012, WaterLase systems sold domestically were covered by the Company’s warranty for a period of one year while the Company’s Diode systems warranty period was for two years from date of sale by the Company or the distributor to the end-user. For the year ended December 31, 2014, WaterLase and Diode systems sold internationally are covered by the Company’s warranty for a period of twenty eight months. For the years ended December 31, 2013 and 2012, WaterLase systems sold internationally were covered by the Company’s warranty for a period of sixteen months while its Diode systems warranty period was up to twenty eight months from date of sale to the international distributor. Estimated warranty expenses are recorded as an accrued liability with a corresponding provision to cost of revenue. This estimate is recognized concurrent with the recognition of revenue on the sale to the distributor or end-user. Warranty expenses expected to be incurred after one year from the time of sale to the distributor are classified as a long-term warranty accrual. The Company’s overall accrual is based on its historical experience and Management’s expectation of future conditions, taking into consideration the location and type of customer and the type of laser, which directly correlate to the materials and components under warranty, the duration of the warranty period, and the logistical costs to service the warranty. Additional factors that may impact the Company’s warranty accrual include changes in the quality of materials, leadership and training of the production and services departments, knowledge of the lasers and workmanship, training of customers, and adherence to the warranty policies. Additionally, an increase in warranty claims or in the costs associated with servicing those claims would likely result in an increase in the accrual and a decrease in gross profit. The Company offers extended warranties on certain imaging products. However, all imaging products are initially covered by the manufacturer’s warranties. | |||||||||||||
Changes in the initial product warranty accrual and the expenses incurred under our initial and extended warranties for the years ended December 31 are included within accrued liabilities on the consolidated balance sheets and were as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Initial warranty accrual, beginning balance | $ | 1,096 | $ | 1,699 | $ | 2,218 | |||||||
Provision for estimated warranty cost | 1,214 | 475 | 1,705 | ||||||||||
Warranty expenditures | (861 | ) | (1,078 | ) | (2,224 | ) | |||||||
Initial warranty accrual, ending balance | 1,449 | 1,096 | 1,699 | ||||||||||
Less warranty accrual, long term | 519 | — | — | ||||||||||
Total warranty accrual, current portion | $ | 930 | $ | 1,096 | $ | 1,699 | |||||||
Shipping and Handling Costs and Revenues | |||||||||||||
Shipping and handling costs are expensed as incurred and are recorded as a component of cost of revenue. Charges to customers for shipping and handling are included as a component of revenue. | |||||||||||||
Advertising Costs | |||||||||||||
Advertising costs are expensed as incurred and totaled approximately $543,000, $1.5 million, and $907,000 for the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||
Engineering and Development | |||||||||||||
Engineering and development expenses are generally expensed as incurred and consist of engineering personnel salaries and benefits, prototype supplies, contract services and consulting fees related to product development. | |||||||||||||
Stock-Based Compensation | |||||||||||||
During the years ended December 31, 2014, 2013, and 2012, the Company recognized compensation cost related to stock options of $1.2 million, $1.6 million, and $1.6 million, respectively, based on the grant date fair value. The net impact to earnings for the years ended December 31, 2014, 2013, and 2012, was $(0.03), $(0.05), and $(0.05) per diluted share, respectively. The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Cost of revenue | $ | 134 | $ | 288 | $ | 245 | |||||||
Sales and marketing | 401 | 585 | 514 | ||||||||||
General and administrative | 616 | 594 | 668 | ||||||||||
Engineering and development | 82 | 142 | 173 | ||||||||||
$ | 1,233 | $ | 1,609 | $ | 1,600 | ||||||||
As of December 31, 2014 and 2013, the Company had $1.4 million and $2.7 million, respectively, of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements granted under its existing plans. The cost is expected to be recognized over a weighted average period of 0.9 years as of December 31, 2014. | |||||||||||||
The Company uses the Black-Scholes option valuation model for estimating the fair value of traded options. This option pricing model requires the Company to make several assumptions regarding the key variables used to calculate the fair value of its stock options. The risk-free interest rate used is based on the U.S. Treasury yield curve in effect for the expected lives of the options at their dates of grant. Since July 1, 2005, the Company has used a dividend yield of zero as it does not intend to pay cash dividends on its common stock in the foreseeable future. The most critical assumptions used in calculating the fair value of stock options is the expected volatility of Company common stock and the expected life of the option. Management believes that the historic volatility of Company common stock is a reliable indicator of future volatility, and accordingly, a stock volatility factor based on the historical volatility of Company common stock over a period of time is used in approximating the estimated volatility of new stock options. The expected term is estimated by analyzing the Company’s historical share option exercise experience over a five-year period. Compensation expense is recognized using the straight-line method for all stock-based awards. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations. Forfeitures are estimated at the time of the grant and revised in subsequent periods as actual forfeitures differ from those estimates. | |||||||||||||
The stock option fair values were estimated using the Black-Scholes option-pricing model with the following assumptions: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Expected term (years) | 3.83 | 3.65 | 3.7 | ||||||||||
Volatility | 94 | % | 84 | % | 97 | % | |||||||
Annual dividend per share | $ | — | $ | — | $ | — | |||||||
Risk-free interest rate | 1.66 | % | 1.04 | % | 0.77 | % | |||||||
Excise Tax | |||||||||||||
Commencing January 1, 2013, certain of the Company’s product sales have been subject to the medical device excise tax. The Company has included such taxes separately as a component of operating expense. | |||||||||||||
Income Taxes | |||||||||||||
Differences between accounting for income taxes for financial statement purposes and accounting for tax return purposes are stated as deferred tax assets or deferred tax liabilities in the accompanying consolidated financial statements. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. The Company establishes a valuation allowance when it is more likely than not that the deferred tax assets will not be realized. | |||||||||||||
On January 1, 2007, the Company adopted the interpretations issued by the Financial Accounting Standards Board (“FASB”) which establish a single model to address accounting for uncertain tax positions. The interpretations clarify the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements and also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. | |||||||||||||
The income tax provisions for the years ended December 31, 2014 and 2013 were calculated using the discrete year-to-date method, which management determined to be more appropriate than the annual effective rate method which was used to calculate the income tax provision for the quarter ended March 31, 2013. See Note 6 – Income Taxes for additional disclosures related to the Company’s income tax. | |||||||||||||
Net Loss Per Share — Basic and Diluted | |||||||||||||
Basic net income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. In computing diluted net income (loss) per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Common shares outstanding, as included in the calculation of basic and diluted loss per share, includes retroactive adjustments to reflect increases resulting from stock dividends that have been paid through the date that these financial statements are issued. | |||||||||||||
Outstanding stock options and warrants to purchase approximately 10,094,000, 6,039,000, and 4,713,000 shares were not included in the calculation of diluted loss per share amounts for the years ended December 31, 2014, 2013, and 2012, respectively, as their effect would have been anti-dilutive. | |||||||||||||
Recent Accounting Pronouncements | |||||||||||||
Changes to U.S. GAAP are established by the FASB in the form of accounting standards updates (“ASU’s”) to the FASB’s Accounting Standards Codification (“ASC”). | |||||||||||||
The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to not be applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations. | |||||||||||||
Newly Adopted Accounting Standards | |||||||||||||
In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. The revised guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance is effective prospectively for reporting periods beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. | |||||||||||||
Accounting Standards Not Yet Adopted | |||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. | |||||||||||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard during the year ending December 31, 2017. | |||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern. The 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 and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. | |||||||||||||
Supplementary_Balance_Sheet_In
Supplementary Balance Sheet Information | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Text Block [Abstract] | |||||||||
Supplemental Balance Sheet Disclosures | NOTE 3 — SUPPLEMENTARY BALANCE SHEET INFORMATION | ||||||||
December 31, | |||||||||
ACCOUNTS RECEIVABLE (in thousands): | 2014 | 2013 | |||||||
Components of accounts receivable, net of allowances, | |||||||||
are as follows: | |||||||||
Trade | $ | 8,887 | $ | 10,960 | |||||
Royalties | 88 | 82 | |||||||
Other | 29 | 85 | |||||||
Total receivables, net | $ | 9,004 | $ | 11,127 | |||||
Accounts receivable is net of allowances for doubtful accounts of approximately $1.7 million and $573,000 and sales returns of approximately $110,000 and $110,000 at December 31, 2014 and 2013, respectively. | |||||||||
December 31, | |||||||||
INVENTORY, NET (in thousands): | 2014 | 2013 | |||||||
Components of inventory, net of allowances, are as follows: | |||||||||
Raw materials | $ | 2,857 | $ | 3,094 | |||||
Work-in-process | 1,348 | 1,727 | |||||||
Finished goods | 8,303 | 6,557 | |||||||
Inventory, net | $ | 12,508 | $ | 11,378 | |||||
Inventory is net of a provision for excess and obsolete inventory totaling approximately $2.4 million and $2.8 million at December 31, 2014 and 2013, respectively. | |||||||||
December 31, | |||||||||
PROPERTY, PLANT, AND EQUIPMENT, NET (in thousands): | 2014 | 2013 | |||||||
Components of property, plant, and equipment, net of | |||||||||
depreciation, are as follows: | |||||||||
Building | $ | 226 | $ | 256 | |||||
Leasehold improvements | 1,197 | 1,207 | |||||||
Equipment and computers | 4,948 | 6,078 | |||||||
Furniture and fixtures | 413 | 1,049 | |||||||
Construction in progress | 4 | 8 | |||||||
6,788 | 8,598 | ||||||||
Accumulated depreciation and amortization | (5,669 | ) | (6,971 | ) | |||||
1,119 | 1,627 | ||||||||
Land | 176 | 199 | |||||||
Property, plant, and equipment, net | $ | 1,295 | $ | 1,826 | |||||
Accrued liabilities are comprised of the following: | |||||||||
December 31, | |||||||||
ACCRUED LIABILITIES (in thousands): | 2014 | 2013 | |||||||
Components of accrued liabilities are as follows: | |||||||||
Payroll and benefits | $ | 1,905 | $ | 1,898 | |||||
Warranty accrual, current portion | 930 | 1,096 | |||||||
Taxes | 139 | 338 | |||||||
Accrued professional services | 1,581 | 911 | |||||||
Accrued insurance premium | 450 | 428 | |||||||
Other | 183 | 326 | |||||||
Accrued liabilities | $ | 5,188 | $ | 4,997 | |||||
Deferred revenue is comprised of the following: | |||||||||
December 31, | |||||||||
DEFERRED REVENUE (in thousands): | 2014 | 2013 | |||||||
Components of deferred revenue are as follows: | |||||||||
Undelivered elements (training, installation, product and | $ | 952 | $ | 1,823 | |||||
support services) | |||||||||
Extended warranty contracts | 1,542 | 1,642 | |||||||
Total Deferred Revenue | 2,494 | 3,465 | |||||||
Less Long-Term amounts: | |||||||||
Extended warranty contracts | — | 1 | |||||||
Total Deferred Revenue - Long Term | — | 1 | |||||||
Total Deferred Revenue - Current | $ | 2,494 | $ | 3,464 | |||||
In connection with its initiative to measure and improve customer satisfaction, which was initiated during the Third Quarter 2014, the Company performed a review of its training service policies and procedures and determined that substantially all of the training service for new customers was used within nine months of the related sale transaction. Accordingly, the Company changed the period over which deferred training service revenue was being recognized from an estimated period of 24 months to nine months. | |||||||||
The Company accounted for this change as a change in accounting estimate which, pursuant to U.S. GAAP, was accounted for on a prospective basis effective July 1, 2014. The change resulted in a reduction of deferred revenue and a corresponding recognition of revenue totaling approximately $708,000 for quarter ended September 30, 2014. Revenue recognized for training is included in product and services revenue in the accompanying consolidated statements of operations. |
Intangible_Assets_and_Goodwill
Intangible Assets and Goodwill | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Intangible Assets And Goodwill | NOTE 4 — INTANGIBLE ASSETS AND GOODWILL | ||||||||||||||||||||||||||||||||
The Company conducted its annual two-step impairment test of goodwill as of June 30, 2014 and determined that there was no impairment. The Company also tests its intangible assets and goodwill between the annual impairment test if events occur or circumstances change that would more likely than not reduce the fair value of the Company or its assets below their carrying amounts. For intangible assets subject to amortization, the Company performs its impairment test when indicators, such as reductions in demand or significant economic slowdowns, are present. No events have occurred that triggered further impairment testing of the Company’s intangible assets and goodwill during the years ended December 31, 2014 and 2013. | |||||||||||||||||||||||||||||||||
Amortization expense for the years ended December 31, 2014, 2013, and 2012, totaled $69,000, $117,000, and $136,000, respectively. Estimated intangible asset amortization expense, based on existing intangible assets, for the years ending December 31, 2015 and 2016, is $62,000 and $52,000, respectively. | |||||||||||||||||||||||||||||||||
The following table presents the details of the Company’s intangible assets, related accumulated amortization and goodwill (in thousands): | |||||||||||||||||||||||||||||||||
As of December 31, 2014 | As of December 31, 2013 | ||||||||||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||||||||||
Gross | Amortization | Impairment | Net | Gross | Amortization | Impairment | Net | ||||||||||||||||||||||||||
Patents (4-10 years) | $ | 1,914 | $ | (1,907 | ) | $ | — | $ | 7 | $ | 1,914 | $ | (1,895 | ) | $ | — | $ | 19 | |||||||||||||||
Trademarks (6 years) | 69 | (69 | ) | — | — | 69 | (69 | ) | — | — | |||||||||||||||||||||||
Other (4 to 6 years) | 817 | (710 | ) | — | 107 | 817 | (653 | ) | — | 164 | |||||||||||||||||||||||
Total | $ | 2,800 | $ | (2,686 | ) | $ | — | $ | 114 | $ | 2,800 | $ | (2,617 | ) | $ | — | $ | 183 | |||||||||||||||
Goodwill (Indefinite life) | $ | 2,926 | $ | 2,926 | $ | 2,926 | $ | 2,926 | |||||||||||||||||||||||||
In December 2012, the Company capitalized approximately $224,000 related to intangible assets acquired from its former distributor in India. These assets primarily include a non-compete agreement and customer and luminary lists. Of the total capitalized balance, $200,000 was a noncash investment whereby the Company reduced the accounts receivable from its former distributor in exchange for these assets. The Company is amortizing these assets on a straight-line basis over the expected useful life of four years and has recognized amortization expense of approximately $57,000 and $55,000 related to these intangible assets during the years ended December 31, 2014 and 2013, respectively. |
Lines_of_Credit_and_Other_Borr
Lines of Credit and Other Borrowings | 12 Months Ended |
Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |
Lines of Credit and Other Borrowings | NOTE 5 — LINES OF CREDIT AND OTHER BORROWINGS |
Lines of Credit | |
The Company entered into two revolving credit facility agreements with Comerica Bank (the “Credit Agreements”) on May 24, 2012. The revolving lines of credit provided for borrowings against certain domestic accounts receivable and inventory (the “Domestic Revolver”) and certain export related accounts receivable and inventory (the “Ex-Im Revolver”). | |
On July 28, 2014, the Company repaid all amounts outstanding under the Credit Agreements, including principal, accrued interest, and fees which totaled, in the aggregate, approximately $2.9 million, and the Credit Agreements were terminated. | |
The Credit Agreements required the Company to maintain compliance with certain monthly financial and non-financial covenants, as defined therein. Any noncompliance with these covenants could have resulted in default interest rates and penalties, and Comerica Bank could have declared the amounts outstanding immediately due and payable. On March 4, 2014, the Company received a waiver of noncompliance with certain financial and nonfinancial covenants as of January 31, 2014 and December 31, 2013. In connection with this waiver, the Company incurred a fee of $10,000 and Comerica Bank reduced the total aggregate available borrowings on the lines of credit to $5.0 million. The Company was not in compliance with a financial covenant as of February 28, 2014 and, as such, entered into a forbearance agreement (the “Forbearance Agreement”) with Comerica Bank on April 10, 2014. The Company paid a fee of $10,000 in connection with the Forbearance Agreement and Comerica Bank reduced the total aggregate available borrowings to $4.0 million. | |
The Company was not in compliance with a financial covenant at March 31, 2014 and did not repay the lines of credit in full on the original maturity date of May 1, 2014. As a result, on May 5, 2014, the Company and Comerica Bank agreed to Amendment No. 1 to the Forbearance Agreement (“Amendment No. 1”) which extended the end of the forbearance period from May 1, 2014 to June 1, 2014. In connection with Amendment No. 1, the maturity date of the revolving lines of credit was extended to June 1, 2014 and the Company paid an administrative fee of $10,000. On June 3, 2014 the Company and Comerica Bank agreed to Amendment No. 2 to the Forbearance Agreement (“Amendment No. 2”) which extended the maturity date of the revolving lines of credit to August 1, 2014. In connection with Amendment No. 2, Comerica Bank increased the interest rates on the lines of credit by 0.50% and the Company paid an administrative fee of $15,000. The Company was not in compliance with certain financial covenants as of May 31, 2014 and, as a result, agreed to Amendment No. 3 to the Forbearance Agreement with Comerica Bank whereby the forbearance period was continued to August 1, 2014 and the Company paid an administrative fee of $10,000. | |
As of December 31, 2013, the Credit Agreements provided for borrowings against certain domestic accounts receivable and inventory, as set forth in the $4.0 million revolving credit facility agreement (the “Domestic Revolver”), and borrowings against certain export related accounts receivable and inventory, as set forth in the $4.0 million revolving credit facility agreement (the “Ex-Im Revolver”), for a combined aggregate commitment of borrowings up to $8.0 million. As of December 31, 2013, the Company had outstanding borrowings totaling approximately $4.6 million, which included $1.8 million under the Domestic Revolver and $2.8 million under the Ex-Im Revolver. | |
The outstanding principal balances of the Credit Agreements, as amended June 3, 2014, bore interest at annual percentage rates equal to the daily prime rate, plus 2.50% for the Domestic Revolver and 2.00% for the Ex-Im Revolver. The daily prime rate was subject to a floor of the daily adjusting LIBOR rate plus 2.50% per annum, or if LIBOR was undeterminable, 2.50% per annum. The Company was also required to pay an unused commitment fee of 0.25% based on a portion of the undrawn lines of credit, payable quarterly in arrears. As of December 31, 2013, the outstanding principal balances of the Credit Agreements bore interest at annual percentage rates equal to the daily prime rate, plus 2.00% for the Domestic Revolver and 1.50% for the Ex-Im Revolver. The daily prime rate was subject to a floor of the daily adjusting LIBOR rate plus 2.50% per annum, or if LIBOR is undeterminable, 2.50% per annum. The Company was also required to pay an unused commitment fee of 0.25% based on a portion of the undrawn lines of credit, payable quarterly in arrears. During the years ended December 31, 2014 and 2013, the Company incurred $457,000 and $599,000, respectively, of interest expense associated with the credit facilities, including $128,000 and $197,000, respectively, of amortization of deferred debt issuance costs and $200,000 and $179,000, respectively, of amortization of the discount on lines of credit. Interest expense payable was approximately $0 and $20,000 at December 31, 2014 and 2013, respectively, and was included in accrued liabilities in the accompanying consolidated financial statements. | |
Lockbox arrangements under the revolving bank facilities provided that substantially all of the income generated was deposited directly into lockbox accounts and then swept into cash management accounts for the benefit of Comerica Bank. Cash was disbursed from Comerica Bank to the Company only after payment of the applicable debt service and principal. At December 31, 2014 and 2013, there were no restricted cash amounts. The Company’s obligations were generally secured by substantially all of the Company’s assets now owned or thereinafter acquired. | |
Pursuant to the Credit Agreements, the Company incurred $55,000 and $67,000 of commitment fees and legal costs associated with the various waivers and amendments during the years ended December 31, 2014 and 2013, respectively. Commitment fees and legal costs associated with acquiring and maintaining the credit facilities were capitalized and amortized on a straight-line basis as interest expense over the term of the Credit Agreements. | |
On November 8, 2013, in connection with Amendment No. 4 to the Credit Agreements, the Company issued a warrant to Comerica Bank (the “November 2013 Comerica Warrant”) to purchase up to 100,000 shares of Company common stock at an exercise price per share of $2.00. The November 2013 Comerica Warrant includes an accelerated vesting clause that may be triggered by certain events described therein, but otherwise vests in four equal quarterly tranches over a one year period commencing on December 31, 2013. The November 2013 Comerica Warrant may be exercised, in whole or in part, with a cash payment from Comerica Bank, or Comerica Bank may exercise the November 2013 Comerica Warrant on a cashless basis. The fair value of the November 2013 Comerica Warrant was estimated using the Black-Scholes option-pricing model with the following assumptions: expected term of 5.00 years; volatility of 102.65%; annual dividend per share of $0.00; and risk-free interest rate of 1.42%; and resulted in an estimated fair value of $137,000 which was recorded as equity and resulted in a discount to the Credit Agreements that was amortized on a straight-line basis to interest expense. During the third quarter of 2014, Comerica Bank exercised all 100,000 of the November 2013 Comerica Warrant on a cashless basis resulting in a net issuance of 19,354 shares of Company common stock. | |
On September 6, 2013, in connection with Amendment No. 3 to the Credit Agreements, the Company issued an additional warrant to Comerica Bank (the “September 2013 Comerica Warrant”) to purchase up to 100,000 shares of Company common stock at an exercise price per share of $2.00. The September 2013 Comerica Warrant vests in four equal quarterly tranches over a one year period commencing on December 31, 2013. The 2013 Comerica Warrant may be exercised, in whole or in part, with a cash payment from Comerica Bank, or Comerica Bank may exercise the September 2013 Comerica Warrant on a cashless basis. The fair value of the September 2013 Comerica Warrant was estimated using the Black-Scholes option-pricing model with the following assumptions: expected term of 5.00 years; volatility of 105.32%; annual dividend per share of $0.00; and risk-free interest rate of 1.77%; and resulted in an estimated fair value of $143,000 which was recorded as equity and resulted in a discount to the Credit Agreements that was amortized on a straight-line basis to interest expense. During the third quarter of 2014, Comerica Bank exercised all 100,000 of the September 2013 Comerica Warrant on a cashless basis resulting in a net issuance of 19,354 shares of Company common stock. | |
During the year ended December 31, 2012, the Company issued a warrant to Comerica Bank (the “2012 Comerica Warrant”) to purchase up to 80,000 shares of Company common stock at an exercise price of $2.83 per share, which was reduced to $2.00 per share in connection with Amendment No. 1 to the Credit Agreements, with an expiration date of May 24, 2017. During the first quarter of 2013, Comerica Bank exercised all 80,000 of the 2012 Comerica Warrants on a cashless basis resulting in a net issuance of 40,465 shares of Company common stock. The amended warrant issuance has an estimated fair value of $142,000 which was recorded as equity and resulted in a discount to the Credit Agreements that is being amortized on a straight-line basis to interest expense. | |
Other Borrowings | |
The Company financed a portion of its annual insurance premiums which it paid in installments over nine months. As of December 31, 2014, $0 was outstanding under this arrangement. As of December 31, 2013, $197,000 at an annual interest rate of 2.9% was outstanding under this arrangement. The Company incurred interest expense associated with the financed insurance premiums of approximately $3,000 for the year ended December 31, 2014 and $5,000 during the years ended December 31, 2013 and 2012. |
Income_Taxes
Income Taxes | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||
Income Taxes | NOTE 6 — INCOME TAXES | |||||||||||||
The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Management evaluates the need to establish a valuation allowance for deferred tax assets based upon the amount of existing temporary differences, the period in which they are expected to be recovered, and expected levels of taxable income. A valuation allowance to reduce deferred tax assets is established when it is “more likely than not” that some or all of the deferred tax assets will not be realized. Management has determined that a full valuation allowance against the Company’s net deferred tax assets is appropriate. | ||||||||||||||
The following table presents the current and deferred provision (benefit) for income taxes for the years ended December 31 (in thousands): | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Current: | ||||||||||||||
Federal | $ | — | $ | (138 | ) | $ | — | |||||||
State | 27 | 31 | 18 | |||||||||||
Foreign | 25 | (27 | ) | 32 | ||||||||||
52 | (134 | ) | 50 | |||||||||||
Deferred: | ||||||||||||||
Federal | 60 | 72 | 57 | |||||||||||
State | — | (118 | ) | 12 | ||||||||||
Foreign | — | 16 | (8 | ) | ||||||||||
60 | (30 | ) | 61 | |||||||||||
$ | 112 | $ | (164 | ) | $ | 111 | ||||||||
During the year ended December 31, 2013, the Company reversed certain tax liabilities associated with unrecognized tax benefits related to international operations due to expiring statutes and recognized tax benefits of $138,000 and recognized deferred tax assets related to certain indefinite lived assets (federal alternative minimum tax credits and California R&D credits) that were used to offset deferred tax liabilities related to indefinite-lived intangible assets of $107,000 resulting in an overall tax benefit of $245,000. Management does not expect to record additional significant tax benefits in the foreseeable future. | ||||||||||||||
The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows for the years ended December 31: | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Statutory regular federal income tax rate | (34.0 | ) | % | (34.0 | ) | % | (34.0 | ) | % | |||||
Change in valuation allowance | 37.4 | % | 27 | % | (13.0 | ) | % | |||||||
Tax return to prior year provision adjustments | — | % | (0.9 | ) | % | 16.2 | % | |||||||
Expiration of federal net operating losses | — | % | — | % | 28.2 | % | ||||||||
Reduction of net operating loss attributes | — | % | (3.1 | ) | % | (3.7 | ) | % | ||||||
State tax benefit (net of federal benefit) | (3.3 | ) | % | (4.2 | ) | % | 4.1 | % | ||||||
Research credits | (1.9 | ) | % | (2.1 | ) | % | — | |||||||
Foreign amounts with no tax benefit | (0.1 | ) | % | (0.2 | ) | % | (0.6 | ) | % | |||||
Non-deductible expenses | 1 | % | 1.6 | % | 6.1 | % | ||||||||
Effect of change in rate | 2.3 | % | 14.2 | % | — | % | ||||||||
Other | (0.8 | ) | % | 0.3 | % | 0.5 | % | |||||||
Total | 0.6 | % | (1.4 | ) | % | 3.8 | % | |||||||
The components of the deferred income tax assets and liabilities as of December 31 (in thousands): | ||||||||||||||
2014 | 2013 | |||||||||||||
Capitalized intangible assets for tax purposes | $ | 202 | $ | 283 | ||||||||||
Reserves not currently deductible | 1,871 | 1,702 | ||||||||||||
Deferred revenue | 8 | 8 | ||||||||||||
Stock options | 2,911 | 2,565 | ||||||||||||
State taxes | 8 | 7 | ||||||||||||
Income tax credits | 2,200 | 1,583 | ||||||||||||
Inventory | 1,225 | 871 | ||||||||||||
Property and equipment | 280 | 376 | ||||||||||||
Other comprehensive income | 222 | 109 | ||||||||||||
Unrealized gain on foreign currency | 136 | 142 | ||||||||||||
Net operating losses | 33,140 | 28,058 | ||||||||||||
Total deferred tax assets | 42,203 | 35,704 | ||||||||||||
Valuation allowance | (42,069 | ) | (35,566 | ) | ||||||||||
Net deferred tax assets | 134 | 138 | ||||||||||||
Capitalized intangible assets | (752 | ) | (696 | ) | ||||||||||
Other | (59 | ) | (59 | ) | ||||||||||
Total deferred tax liabilities | (811 | ) | (755 | ) | ||||||||||
Net deferred tax liabilities | $ | (677 | ) | $ | (617 | ) | ||||||||
Based upon the Company’s operating losses incurred for the three years ended December 31, 2014, and the available evidence, the Company has established a valuation allowance against its net deferred tax assets in the amount of $42.1 million as of December 31, 2014. Management considered factors such as the Company’s earnings history, future projected earnings and tax planning strategies. If sufficient evidence of the Company’s ability to generate sufficient future taxable income tax benefits becomes apparent, the valuation allowance may be reduced, thereby resulting in tax benefits in the statement of operations and additional paid-in-capital. Management evaluates the potential realization of the Company’s deferred tax assets and assesses the need for reducing the valuation allowance periodically. | ||||||||||||||
As of December 31, 2014, the Company had net operating loss (“NOL”) carryforwards for federal and state purposes of approximately $93.2 million and $63.9 million, respectively, which expire in 2018 through 2034. The utilization of NOL and credit carryforwards may be limited under the provisions of the Internal Revenue Code (“IRC”) Section 382 and similar state provisions. IRC Section 382 generally imposes an annual limitation on the amount of NOL carryforwards that may be used to offset taxable income where a corporation has undergone significant changes in stock ownership. During the year ended December 31, 2006, the Company completed an analysis to determine the potential applicability of any annual limitations imposed by IRC Section 382. Based on the analysis, management determined that there was no significant IRC Section 382 limitation. As of December 31, 2014, the Company had research and development tax credit carryforwards for federal and state purposes of approximately $1.4 million and $1.1 million, respectively, which will begin to expire in 2018 through 2034 for federal purposes and will carry forward indefinitely for state purposes. An updated analysis may be required at the time the Company begins utilizing any of its net operating losses to determine if there is an IRC Section 382 limitation. | ||||||||||||||
In addition to the NOL carryforwards included in the deferred tax asset and liability schedule are excess tax deductions relating to stock options that have not been realized. When the benefit of the NOLs containing these excess tax deductions are realized, the benefit will not affect earnings, but rather additional paid-in-capital. As of December 31, 2014 and 2013, the cumulative unrealized excess tax deductions amounted to approximately $6.9 million and $7.0 million, respectively. These amounts have been excluded from the Company’s NOL carryforwards. To the extent that such excess tax deductions are realized in the future by virtue of reducing income taxes payable, the Company would expect additional paid-in-capital to increase by approximately $2.6 million and $2.7 million for the years ended December 31, 2014 and 2013, respectively. The Company follows the appropriate ordering rules to determine when such NOLs have been realized. | ||||||||||||||
Recently enacted tax laws may also affect the tax provision on the Company’s financial statements. The state of California requires the use of a single sales factor apportionment formula for tax years beginning on or after January 1, 2013. During the year ended December 31, 2013, the Company’s state deferred tax assets were revalued to account for the change in the tax law; however, the Company records a full valuation allowance against the state deferred tax assets therefore the California apportionment mandate did not have a material impact on the Company’s consolidated financial statements. | ||||||||||||||
The following table summarizes the activity related to the Company’s unrecognized tax benefits during the year ended December 31, 2014 (in thousands): | ||||||||||||||
Balance at January 1, 2014 | $ | 568 | ||||||||||||
Additions for tax positions related to the prior year | — | |||||||||||||
Lapse of statute of limitations | — | |||||||||||||
Balance at December 31, 2014 | $ | 568 | ||||||||||||
The Company expects resolution of unrecognized tax benefits, if created, would occur while the full valuation allowance of deferred tax assets is maintained. The Company does not expect to have any unrecognized tax benefits that, if recognized, would affect the effective tax rate. As of December 31, 2014 and 2013, the Company does not have liability for potential penalties or interest. The Company does not expect its unrecognized tax benefits to change significantly over the next 12 months. | ||||||||||||||
The Company files U.S., state and foreign income tax returns in jurisdictions with varying statutes of limitations. The 2010 through 2014 tax years generally remain subject to examination by federal and most state tax authorities. In foreign jurisdictions, the 2008 through 2014 tax years remain subject to examination by their respective tax authorities. | ||||||||||||||
U.S. income taxes or withholding taxes were provided for all the distributed earnings for the Company’s foreign subsidiaries as of December 31, 2014. There were no undistributed earnings from foreign subsidiaries as of December 31, 2014 or 2013. The Company intends to reinvest any earnings until such time a decision is made to liquidate the foreign operations. |
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Commitments and Contingencies | NOTE 7 — COMMITMENTS AND CONTINGENCIES | ||||
Leases | |||||
In January 2006, the Company entered into a five-year lease for its 57,000 square foot corporate headquarters and manufacturing facility located at 4 Cromwell, Irvine, California, with initial monthly installments of $38,692 and annual adjustments over the lease term. On September 24, 2009, the lease was amended to extend the term through April 20, 2015, adjust the basic rent, and modify provisions to the security deposit. On January 4, 2011, the lease was further amended to defer a portion of the basic rent to future periods. The Company is recognizing rent expense on a straight line basis with the difference between rent expense and the cash paid recorded to deferred rent. These amounts are reflected in the commitments as of December 31, 2014, listed below. The Company also leases certain office equipment and automobiles under various operating lease arrangements. | |||||
Future minimum rental commitments under operating lease agreements with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands): | |||||
2015 | $ | 597 | |||
2016 | 306 | ||||
2017 | 131 | ||||
2018 | — | ||||
Thereafter | — | ||||
Total future minimum lease obligations | $ | 1,034 | |||
Rent expense totaled approximately $1.0 million, $1.1 million, and $789,000 for the years ended December 31, 2014, 2013, and 2012, respectively. | |||||
Employee arrangements and other compensation | |||||
Certain members of management are entitled to severance benefits payable upon termination following a change in control, which would approximate $503,000 and $717,000 at December 31, 2014 and 2013, respectively. The Company also has agreements with certain employees to pay bonuses based on targeted performance criteria. As of December 31, 2014 and 2013, approximately $125,000 and $0 was accrued for performance bonuses, which is included in accrued liabilities in the consolidated balance sheets. | |||||
Purchase Commitments | |||||
The Company generally purchases components and subassemblies for its products from a limited group of third-party suppliers through purchase orders. The Company had $14.1 million of purchase commitments as of December 31, 2014, for which the Company has not received the goods or services and which is expected to be purchased primarily within one year. These purchase commitments were made to secure better pricing and to ensure the Company will have the necessary parts to meet anticipated near term demand. Although open purchase orders are considered enforceable and legally binding, the Company may be able to cancel, reschedule, or adjust requirements prior to supplier fulfillment. | |||||
Litigation | |||||
The Company discloses material loss contingencies deemed to be reasonably possible and accrues for loss contingencies when, in consultation with its legal advisors, management concludes that a loss is probable and reasonably estimable. The ability to predict the ultimate outcome of such matters involves judgments, estimates, and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. | |||||
Class Action Lawsuits | |||||
On August 23, 2013, a purported class action lawsuit entitled Brady Adams v. Biolase, Inc., et al., Case No. 13-CV-1300 JST (FFMx) was filed in the United States District Court for the Central District of California against BIOLASE and its then Chief Executive Officer, Federico Pignatelli, and its Chief Financial Officer, Frederick D. Furry. On August 26, 2013, a purported class action lawsuit entitled Ralph Divizio v. Biolase, Inc., et al., Case No. 13-CV-1317 DMG (MRWx) was filed in the same court against BIOLASE, Messrs. Pignatelli and Furry, and its then President and Chief Operating Officer, Alexander K. Arrow. Each of the lawsuits alleges violations of the federal securities laws and asserts causes of action against the defendants under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. In accordance with the Private Securities Litigation Reform Act of 1995, on December 10, 2013, the court entered an order consolidating the lawsuits, appointing a lead plaintiff and approving the lead plaintiff’s selection of lead counsel. On February 24, 2014, the lead plaintiff filed a consolidated complaint against the Company and Messrs. Pignatelli, Furry, and Arrow, alleging violations of the federal securities laws and asserting causes of action against the defendants under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. | |||||
On November 19, 2013, the Company’s board of directors (the “Board”) received a letter from attorneys for purported shareholder David T. Long, demanding that the Board investigate, institute litigation, and take measures to redress and prevent alleged wrongdoing concerning the dissemination of certain allegedly false and misleading public disclosures made by the Company between January 2013 and August 2013. | |||||
The Company believes that the claims contained in the lawsuits are without merit and intends to vigorously defend against the claims. During the year ended December 31, 2013, the Company paid $250,000 for legal costs incurred in connection with these matters. No legal costs were incurred by the Company in connection with these matters during the year ended December 31, 2014. | |||||
Subsequent to December 31, 2014, the parties have reached an agreement in principle to settle the consolidated securities class action lawsuit, which is subject to the negotiation of a definitive settlement agreement and preliminary and final approval of the court. Although there can be no assurance that such agreement will be finalized, as of the date of these financial statements, management does not expect the Company to incur additional expenses related to this matter due to certain insurance coverage in place. | |||||
Shareholder Litigation | |||||
On March 3, 2014, the Company announced that its Board had appointed Paul N. Clark and Jeffrey M. Nugent to the Board and Dr. Alexander K. Arrow and Dr. Samuel B. Low had tendered their resignations. Subsequent to the Company’s announcement, Drs. Arrow and Low purported to rescind their resignations. On March 6, 2014, Mr. Pignatelli instructed someone at the Company to file a Current Report on Form 8-K stating that the Board had appointed Messrs. Clark and Nugent and that, as a result of those appointments, there were eight directors on the Board. | |||||
On March 11, 2014, Oracle Partners L.P. (“Oracle”) filed a lawsuit in the Delaware Court of Chancery (the “Court of Chancery”) seeking a determination that, among other things, the Board consisted of only six members (not eight) and Drs. Arrow and Low had resigned from the Board and been replaced by Messrs. Clark and Nugent. | |||||
Following discovery and an expedited trial, the Delaware Court of Chancery held that (1) the Board was comprised of five members, (2) Dr. Arrow’s resignation was effective and Mr. Clark was validly appointed, and (3) Dr. Low’s resignation was ineffective and Mr. Nugent had not been validly appointed. The Delaware Supreme Court affirmed the Chancery Court’s decision. Mr. Pignatelli resigned as Chairman of the Board and Chief Executive Officer of the Company on June 12, 2014, the same date as the Delaware Supreme Court’s ruling. | |||||
On July 3, 2014, Mr. Pignatelli purported to provide notice of his intention to nominate five candidates (including himself) for election to the Board at our annual meeting. However, such notice failed to comply with the Company’s bylaws, because at the time that he provided such notice, while Mr. Pignatelli was a beneficial owner of our common stock, he did not have his holder of record provide such notice on his behalf. | |||||
On July 21, 2014, Mr. Pignatelli filed a complaint in the Court of Chancery of the State of Delaware, naming the Company, Messrs. Clark, Nugent and Talevich and Dr. Moll as defendants. The complaint alleged, among other things, that (a) a slate of director nominees proposed by Mr. Pignatelli was valid, (b) certain members of the Company’s Board breached their fiduciary duties by rejecting Mr. Pignatelli’s slate, (c) the Company breached an agreement between Mr. Pignatelli and one current and several former Board members to nominate him for election, and (d) the Company’s recently enacted bylaw amendments, including a fee-shifting bylaw provision, were invalid. Mr. Pignatelli sought expedited proceedings with respect to all of his claims other than the claims relating to the recently enacted bylaw amendments. | |||||
On July 24, 2014, the Chancery Court denied Mr. Pignatelli’s motion for expedited proceedings on all but one of his claims (the rejection of Mr. Pignatelli’s slate). | |||||
On July 29, 2014, Mr. Pignatelli filed a notice of voluntary dismissal of his July 21, 2014 complaint and withdrew his lawsuit. | |||||
On August 6, 2014, Mr. Pignatelli resigned as director of the Company. | |||||
Intellectual Property Litigation | |||||
On April 24, 2012, CAO Group, Inc. (“CAO”) filed a lawsuit against the Company in the District of Utah for patent infringement of U.S. Patent No. 7,485,116 (the “116 Patent”) regarding the Company’s ezlase dental laser. On September 9, 2012, CAO filed its First Amended Complaint, which added claims for (1) business disparagement/injurious falsehood under common law and (2) unfair competition under 15 U.S.C. Section 1125(a). The additional claims stem from a press release that the Company issued on April 30, 2012, which CAO claims contained false statements that are disparaging to CAO and its diode product. The First Amended Complaint seeks injunctive relief, treble damages, attorneys’ fees, punitive damages, and interest. On November 13, 2012, the Court stayed the lawsuit for 120 days to allow the United States Patent and Trademark Office (the “USPTO”) to consider the Company’s request for reexamination of the patent-in-suit. The USPTO granted the request to reexamine the asserted claims of the patent-in-suit and, on February 28, 2013, the Court stayed the lawsuit until the termination of the reexamination proceedings. On April 23, 2013, the USPTO issued an office action rejecting all of the asserted claims over the prior art, and CAO responded to the office action. On August 28, 2013, the USPTO issued an Action Closing Procedure, rejecting all of CAO’s patent claims. CAO responded to the USPTO’s ruling and on December 10, 2013, the USPTO issued a Right of Appeal Notice, finally rejecting some claims of the 116 Patent while finding that other claims appeared to be patentable. The Company appealed the USPTO’s findings on January 9, 2014 and on January 27, 2014, the USPTO declined to reconsider the finding of certain claims as patentable and instructed the parties to proceed to appeal to the Patent Trial and Appeal Board. On March 17, 2014, the Company filed its brief in support of its appeal of the USPTO’s decision not to reject certain claims of the 116 Patent. On March 24, 2014, CAO filed its brief in support of its appeal of the USPTO’s decision to reject certain claims of the 116 patent. On April 18, 2014, the Company filed a respondent brief in opposition to the CAO’s appeal arguments. On May 30, 2014, both parties filed rebuttal briefs in support of their appeals. On June 30, 2014, the Company requested an oral hearing before the Board. On July 1, 2014, the Board noted that request and docketed the case for consideration. A hearing on reconsideration was held in November 2014. | |||||
The Company filed a patent infringement lawsuit against Fotona dd. (“Fotona”) in Düsseldorf District Court (the “Düsseldorf Court”) on April 12, 2012 alleging infringement with respect to the Fotona Fidelis dental laser system. Fotona denies liability and seeks the reimbursement of statutory fees from the Company. Together with its response brief, Fotona also filed a nullity action against the patent in dispute, patent number EP 1 560 470. The nullity action is pending at the German Federal Patent Court (the “Patent Court”), Docket No. 1 Ni 58/13 (EP). On September 2, 2013, the Company filed its counterplea in the infringement proceedings and phrased its arguments defending the validity of the patent. These arguments were also the subject of the defense brief to the Patent Court in the parallel nullity action proceedings. On September 9, 2013, the Company filed its response to the Patent Court. Fotona filed a rejoinder on February 3, 2014, including its counterplea on nullity. | |||||
On April 29, 2014, the Düsseldorf Court rendered a first instance decision whereby Fotona must cease and desist from selling its Fidelis and Lightwalker dental laser systems, render accounts on past sales, recall respective products, and pay damages on infringement. Additionally, the Company was awarded statutory fees, court costs, and attorney fees. Preliminary enforcement against Fotona is possible if the Company posts a bond totaling €500,000, which is designed to cover a portion of the potential damages, before a final instance decision is available. In Germany, damages can be calculated based on the profits made by the infringer after the formal announcement of the granting of a patent, in this case beginning January 1, 2009, without considering direct labor or any other operational costs. This could amount to several million euros. However, Fotona has yet to provide the details of its profits in order to allow the Company to calculate the damages. In the two additional first instance cases following the extension of the initial lawsuit against Fotona, the Düsseldorf Court also required the Company to provide a statutory bond totaling €146,000. Such bonds are traditionally imposed on foreign plaintiffs to cover all statutory, court, and attorney’s fees. Fotona submitted its responses to the action and filed respective invalidation actions against the rights of the Company, which are now pending at the Patent Court and the Federal Patent and Trademark Office. | |||||
Other Matters | |||||
In the normal course of business, the Company may be subject to other legal proceedings, lawsuits and other claims. Although the ultimate aggregate amount of probable monetary liability or financial impact with respect to these matters is subject to many uncertainties and is therefore not predictable with assurance, the Company’s management believes that any monetary liability or financial impact to the Company from these other matters, individually and in the aggregate, would not be material to the Company’s financial condition, results of operations or cash flows. However, there can be no assurance with respect to such result, and monetary liability or financial impact to the Company from these other matters could differ materially from those projected. |
Stockholders_Equity
Stockholders' Equity | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Stockholders' Equity | NOTE 8 — STOCKHOLDERS’ EQUITY | ||||||||||||||||||||
Preferred Stock | |||||||||||||||||||||
The Board, without further stockholder authorization, may issue from time to time up to 1,000,000 shares of the Company’s preferred stock. Of the 1,000,000 shares of preferred stock, 500,000 shares are designated as Series B Junior Participating Cumulative Preferred Stock. As of December 31, 2014 and 2013, none of the preferred stock was outstanding. | |||||||||||||||||||||
The Company has adopted a stockholder rights plan under which one preferred stock purchase right was distributed on January 11, 1999 with respect to each share of common stock outstanding at the close of business on December 31, 1998 and with respect to each share of common stock issued by the Company since then. The rights expire on December 31, 2018. While the rights are outstanding, they provide, among other things, that in the event any person becomes the beneficial owner of at least 20% of common stock outstanding (subject to certain exceptions), each right will be exercisable to purchase shares of Company common stock having a market value equal to two times the then current exercise price of a right (initially $30.00). The rights also provide that, if on or after the occurrence of such event, the Company merges with any other corporation or 50% or more of its assets or earning power are sold, each right will be exercisable to purchase common stock of the acquiring corporation having a market value equal to two times the then current exercise price of such stock. The Board may, at its option, authorize and direct the redemption of all, but not less than all, of the then-outstanding rights at a redemption price of $0.001 per right, subject to adjustment for any stock split, stock dividend or transaction occurring after December 31, 1998. | |||||||||||||||||||||
Common Stock | |||||||||||||||||||||
At December 31, 2014, the Company had 58,115,000 shares of Company common stock issued and outstanding. The Company currently has 100,000,000 shares of Company common stock authorized for issuance. On July 18, 2014, the Company retired 1,963,500 shares of Company common stock held in treasury at that date. The Company recorded the cost of the treasury stock retired as a $2,000 reduction to common stock and a $16,397,000 reduction in additional paid in capital. | |||||||||||||||||||||
2014 common stock issuances | |||||||||||||||||||||
On November 7, 2014, the Company completed a private placement (the “November 2014 Private Placement”) with several institutional and individual investors, and certain of its directors and officers, under which the Company agreed to sell an aggregate of 14,162,873 unregistered shares of Company common stock at the price of $2.39 per share, the closing price of Company common stock on November 3, 2014, and warrants to purchase up to an aggregate of 9,205,862 unregistered shares of its common stock at an exercise price of $4.00 per share. Gross proceeds from the sale totaled $35.0 million, and net proceeds, after offering expenses of approximately $235,000, were approximately $34.8 million. The warrants become exercisable on May 7, 2015, six months after the closing of the private placement, and have a term of three years from the date of issuance. The Company is using the proceeds for working capital and general corporate purposes. In connection with the registration rights granted to these investors, the Company filed a registration statement on Form S-3 with the SEC, which was declared effective on December 12, 2014. | |||||||||||||||||||||
On July 22, 2014, the Company completed a private placement with several institutional and individual investors, and several of our directors and officers, wherein the Company sold 6,250,000 unregistered shares of Company common stock at a price of $1.92 per share (the closing price of Company common stock on July 18, 2014). Gross proceeds from the sale totaled $12.0 million, and net proceeds, after offering expenses of approximately $462,000, were approximately $11.5 million. The Company used the proceeds to repay the Company’s lines of credit with Comerica Bank and for working capital and general corporate purposes. In connection with the registration rights granted to these investors, the Company filed a registration statement on Form S-3 with the SEC, which was declared effective on September 18, 2014. | |||||||||||||||||||||
On February 10, 2014, the Company entered into a subscription agreement with Oracle Partners L.P., Oracle Institutional Partners, L.P., and Oracle Ten Fund Master, L.P., under which the Company offered an aggregate of 1,945,525 unregistered shares of Company common stock in a private placement at a price of $2.57 per share. Gross proceeds from the sale totaled $5.0 million and net proceeds, after offering expenses of approximately $188,000, totaled approximately $4.8 million. The Company used the proceeds for working capital and general corporate purposes. | |||||||||||||||||||||
2013 common stock issuances | |||||||||||||||||||||
On December 19, 2013, the Company entered into a subscription agreement with Oracle Ten Fund Master, LP under which the Company offered an aggregate of 340,000 unregistered shares of Company common stock in a private placement at a price of $1.80 per share. Gross proceeds from the sale totaled $612,000, and net proceeds, after offering expenses of approximately $30,000, totaled approximately $582,000. The Company used the proceeds for working capital and general corporate purposes. | |||||||||||||||||||||
On July 26, 2013, the Company filed a registration statement on Form S-3, File No. 333-190158 (“2013 Registration Statement”) with the SEC to register an indeterminate number of shares of Company common stock, preferred stock, and warrants with a total offering price not to exceed $5 million. The 2013 Registration Statement was declared effective by the SEC on September 19, 2013. On September 23, 2013, the Company entered into an agreement with Northland Securities, Inc. (“Northland”), pursuant to which Northland acted as placement agent in connection with the sale of 2,688,172 shares of its common stock at a price of $1.86 per share. Gross proceeds from the sale totaled $5 million, and net proceeds after offering expenses of $408,000, which included Northland’s fee, totaled approximately $4.6 million. | |||||||||||||||||||||
Stock dividends | |||||||||||||||||||||
The Board declared one-half percent stock dividends during each of the four quarters of 2013. The stock dividend declared during the quarter ended December 31, 2013 was payable December 30, 2013 to shareholders of record on December 16, 2013. The stock dividend declared during the quarter ended September 30, 2013 was payable September 13, 2013 to shareholders of record on August 30, 2013. The stock dividend declared during the quarter ended June 30, 2013 was payable June 28, 2013 to shareholders of record on June 14, 2013. The stock dividend declared during the quarter ended March 31, 2013 was payable March 29, 2013 to shareholders of record on March 15, 2013. All stock information presented, other than that related to stock options and warrants, has been adjusted to reflect the effects of stock dividends. | |||||||||||||||||||||
In February 2014, the Board announced a 2% annual stock dividend policy for 2014, payable in quarterly installments, and declared a one-half percent stock dividend payable March 28, 2014, to stockholders of record on March 14, 2014. No additional stock dividends were declared by the Board in 2014. | |||||||||||||||||||||
Stock dividends are discussed quarterly by the Board and management. The actual declaration of future stock dividends and the establishment of the record and payment dates are subject to final determination by the Board after its review of the Company’s financial performance, the expected results of future operations, availability of shares, and other factors that the Board may deem relevant. The Company’s dividend policy may be changed at any time by the Board, and there is no assurance, with respect to the amount or frequency, that any stock dividend will be declared in the future. | |||||||||||||||||||||
Stock repurchase program | |||||||||||||||||||||
On August 10, 2011, the Company announced that its Board authorized a stock repurchase program, pursuant to which the Company was authorized to repurchase up to an aggregate of 2,000,000 shares of the Company’s outstanding common stock. The stock repurchase program became effective on August 12, 2011 and expired on August 12, 2013. Pursuant to the stock repurchase program, the Company repurchased 133,365 shares of the Company’s common stock at a weighted average price of $1.73 during the year ended December 31, 2012. | |||||||||||||||||||||
Warrants | |||||||||||||||||||||
The Company issues warrants for the sale of its common stock as approved by its Board. Warrants to purchase up to an aggregate of 9,205,862 unregistered shares of Company common stock at an exercise price of $4.00 per share were issued in connection with the November 2014 Private Placement and are accounted for within stockholders’ equity on the consolidated balance sheets in accordance with GAAP. In addition to the aforementioned warrants issued in connection with common stock transactions, the Company has issued warrants in connection with strategic initiatives as follows: | |||||||||||||||||||||
On July 12, 2013, the Company entered into a strategic agreement with Valam, Inc. (“Valam”) to develop, market, and sell office-based laser systems to otolaryngologists (also known as “Ear, Nose, and Throat” or “ENT” doctors) (the “Valam Agreement”). The Valam Agreement provides the Company with an exclusive worldwide license to Valam’s ENT related patents and pending patents which complement the Company’s patent portfolio and support the Company’s launch into the ENT laser market beginning in late 2013. In connection with the Valam Agreement, the Company issued Valam a warrant to purchase up to 165,000 shares of Company common stock, at a modified price per share of $4.00 (the “Valam Warrant”), which is a decrease from the original agreed upon price per share of $6.00. The Valam Warrant is performance-based and vests as follows: 30,000 warrants upon the launch of the Company’s first ENT laser; 55,000 warrants upon the receipt of certain specified clearances required from the U.S. Food and Drug Administration (the “FDA”); 40,000 warrants upon achieving $5 million in ENT laser revenues for a 12-month period; and 40,000 warrants upon achieving $10 million in ENT laser revenues for a 12-month period. Vested warrants may be exercised with a cash payment, or on a cashless basis. The Valam Warrant expires on July 14, 2020. As of December 31, 2014 and 2013, in connection with the Valam warrant, 30,000 warrants have been earned and stock-based compensation costs of approximately $41,000 have been recognized. | |||||||||||||||||||||
On April 26, 2013, the Company issued a warrant to Sun Dental Laboratories, LLC (“Sun Dental Labs”) to purchase up to 500,000 shares of Company common stock, at a price per share of $5.90 (the “Sun Dental Warrant”). The Sun Dental Warrant was performance-based and vested at a rate of 1,000 shares per each 3Shape A/S (“3Shape”) Trios intraoral scanner (“Trios IOS”) that Sun Dental Labs assists in selling in conjunction with the agreement. The Sun Dental Warrant expired on April 24, 2014. The Company recorded stock-based compensation expense of $0 and less than $1,000 related to the Sun Dental Warrant during the years ended December 31, 2014 and 2013. | |||||||||||||||||||||
On April 18, 2013, the Company issued to an investor relations firm a warrant (the “2013 IR Warrant”) to purchase up to 60,000 shares of Company common stock at a price per share of $5.10. The 2013 IR Warrant vests and becomes exercisable only if the closing price of Company common stock on NASDAQ reaches or exceeds $7.50 per share. In July 2014, the Company ceased its relationship with the investor relations firm and cancelled the 2013 IR Warrant. For the years ended December 31, 2014 and 2013, no stock-based compensation was recognized. | |||||||||||||||||||||
On March 23, 2013, the Company issued to a consultant two tranches of warrants to purchase up to 100,000 shares of Company common stock, at a price per share of $4.50 (the “CMR Warrant”). The first tranche of 50,000 warrants vests and becomes exercisable only if Company common stock closing price on NASDAQ reaches or exceeds $6.00 per share. The first tranche of 50,000 warrants was cancelled during the year ended December 31, 2014 and the second tranche of 50,000 warrants was cancelled during the year ended December 31, 2013. As of December 31, 2014 and 2013, no stock-based compensation had been recognized for the CMR Warrant. | |||||||||||||||||||||
On November 8, 2012, the Company issued to an investor relations consultant a warrant (the “2012 IR Warrant”) to purchase up to 50,000 shares of Company common stock, at a price per share of $2.50. The 2012 IR Warrant was subject to a vesting and exercisability condition which would have been met upon closing price of Company common stock on NASDAQ reaching or exceeding $7.00 per share by November 7, 2013. Furthermore, the 2012 IR Warrant called for immediate vesting of 25,000 shares upon early termination of the arrangement. The Company terminated the arrangement during the year ended December 31, 2013 and therefore recognized stock-based compensation of approximately $64,000 and issued 9,296 net shares of Company common stock pursuant to the 2012 IR Warrant during the same period. | |||||||||||||||||||||
During September 2010, the Company issued to three service providers who provide investor services a warrant (the “2010 IR Warrant”) to purchase an aggregate of 50,000 shares of Company common stock at a price per share of $0.74. Pursuant to the 2010 IR Warrant, the service providers were also entitled to a second tranche of 2010 IR Warrant to purchase an aggregate of 50,000 shares of Company common stock at a price per share of $0.74. The 2010 IR Warrant was fully exercised during the year ended December 31, 2012. In connection with the issuance of the 2010 IR Warrant, the Company recognized expenses of approximately $23,000 for the year ended December 31, 2012. | |||||||||||||||||||||
The Company also issued warrants to its lenders. See Note 5 — Lines of Credit and Other Borrowings for further discussion. | |||||||||||||||||||||
Stock Options | |||||||||||||||||||||
The Company currently has one stock-based compensation plan, the 2002 Stock Incentive Plan (as amended effective as of May 26, 2004, November 15, 2005, May 16, 2007, May 5, 2011, June 6, 2013, and October 30, 2014) (the “2002 Plan”), which will expire on May 5, 2019. Persons eligible to receive awards under the 2002 Plan include certain officers and employees of the Company, and directors of the Company, as well as consultants. As of December 31, 2014, a total of 9,250,000 shares have been authorized for issuance under the 2002 Plan, of which 2,993,000 shares of Company common stock have been issued pursuant to options that were exercised, 3,475,000 shares of Company common stock have been reserved for options that are outstanding, and 2,782,000 shares of Company common stock remain available for future grant. | |||||||||||||||||||||
Stock options may be granted as incentive or non-qualified options; however, no incentive stock options have been granted to date. The exercise price of options is at least equal to the market price of the stock as of the date of grant. Options may vest over various periods but typically vest on a quarterly basis over three years. Options expire after five years, ten years or within a specified time from termination of employment, if earlier. The Company issues new shares of Company common stock upon the exercise of stock options. The following table summarizes option activity: | |||||||||||||||||||||
Weighted | Weighted Average | ||||||||||||||||||||
Average | Remaining | ||||||||||||||||||||
Exercise Price | Contractual Term | Aggregate Intrinsic | |||||||||||||||||||
Shares | Per Share | (Years) | Value(1) | ||||||||||||||||||
Options outstanding, January 1, 2012 | 3,858,000 | $ | 3.75 | ||||||||||||||||||
Granted at fair market value | 614,000 | 2.61 | |||||||||||||||||||
Granted at above fair market value | 568,000 | 2.45 | |||||||||||||||||||
Exercised | (214,000 | ) | 2.12 | ||||||||||||||||||
Forfeited, cancelled, or expired | (966,000 | ) | 3.63 | ||||||||||||||||||
Options outstanding, December 31, 2012 | 3,860,000 | 3.48 | |||||||||||||||||||
Granted at fair market value | 711,000 | 3.79 | |||||||||||||||||||
Granted at above fair market value | 978,000 | 3.72 | |||||||||||||||||||
Exercised | (343,000 | ) | 2.07 | ||||||||||||||||||
Forfeited, cancelled, or expired | (765,000 | ) | 4.23 | ||||||||||||||||||
Options outstanding, December 31, 2013 | 4,441,000 | 3.51 | |||||||||||||||||||
Granted at fair market value | 240,000 | 2.23 | |||||||||||||||||||
Granted at above fair market value | 369,000 | 3.05 | |||||||||||||||||||
Exercised | (153,000 | ) | 2.03 | ||||||||||||||||||
Forfeited, cancelled, or expired | (1,422,000 | ) | 4.5 | ||||||||||||||||||
Options outstanding, December 31, 2014 | 3,475,000 | 3.03 | 2.97 | $ | 1,076,000 | ||||||||||||||||
Options exercisable, December 31, 2014 | 2,627,000 | 3 | 2.46 | 975,000 | |||||||||||||||||
Vested options expired during the twelve months | 185,000 | 10.04 | — | ||||||||||||||||||
ended December 31, 2014 | |||||||||||||||||||||
-1 | The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of a grant. | ||||||||||||||||||||
The following table summarizes additional information for those options that are outstanding and exercisable as of December 31, 2014: | |||||||||||||||||||||
Options Outstanding | Exercisable | ||||||||||||||||||||
Weighted | |||||||||||||||||||||
Weighted | Average | Weighted | |||||||||||||||||||
Number | Average | Remaining | Number | Average | |||||||||||||||||
Range of Exercise Prices | of Shares | Exercise Price | Life (Years) | of Shares | Exercise Price | ||||||||||||||||
$ 0.82 — $ 1.99 | 331,000 | $ | 1.41 | 3.76 | 321,000 | $ | 1.4 | ||||||||||||||
$ 2.00 — $ 2.99 | 1,978,000 | 2.32 | 2.77 | 1,488,000 | 2.26 | ||||||||||||||||
$ 3.00 — $ 3.99 | 212,000 | 3.15 | 3.69 | 46,000 | 3.29 | ||||||||||||||||
$ 4.00 — $ 4.99 | 416,000 | 4.21 | 3.56 | 356,000 | 4.16 | ||||||||||||||||
$ 5.00 — $ 5.99 | 412,000 | 5.11 | 2.76 | 290,000 | 5.15 | ||||||||||||||||
$ 6.00 — $ 6.99 | 53,000 | 6.47 | 1.36 | 53,000 | 6.47 | ||||||||||||||||
$ 7.00 — $ 7.99 | 20,000 | 7.26 | 1.4 | 20,000 | 7.26 | ||||||||||||||||
$ 8.00 — $ 8.75 | 53,000 | 8.45 | 1.97 | 53,000 | 8.45 | ||||||||||||||||
Total | 3,475,000 | 3.03 | 2.97 | 2,627,000 | 3 | ||||||||||||||||
Cash proceeds, along with fair value disclosures related to grants, exercises, and vesting options, are as follows for the years ended December 31 (in thousands, except per share amounts): | |||||||||||||||||||||
Years Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Proceeds from stock options exercised | $ | 310 | $ | 707 | $ | 455 | |||||||||||||||
Tax benefit related to stock options exercised(1) | N/A | N/A | N/A | ||||||||||||||||||
Intrinsic value of stock options exercised(2) | $ | 108 | $ | 860 | $ | 91 | |||||||||||||||
Weighted-average fair value of options granted | $ | 1.61 | $ | 1.82 | $ | 1.39 | |||||||||||||||
Total fair value of shares vested during the year | $ | 1,208 | $ | 1,544 | $ | 1,737 | |||||||||||||||
-1 | Excess tax benefits received related to stock option exercises are presented as financing cash inflows. For the periods presented, the Company did not receive a tax benefit related to the exercise of stock options due to its net operating losses. | ||||||||||||||||||||
-2 | The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the market price of the stock on the date of grant. | ||||||||||||||||||||
On January 2, 2015, the Compensation Committee of the Board granted non-qualified stock options to purchase 1,365,702 shares of Company common stock to certain officers of the Company in connection with a new compensation plan for 2015 and 86,000 shares of Company common stock to members of the Dental Professional Advisory Board (“DPAB”) as consultants for the Company. These options were granted at an exercise price of $2.64, the closing market price of the Company’s stock on grant date. Options granted to certain officers of the Company expire ten years from grant date and vest as follows: (i) as to 50% of the options, one-fourth on the one-year anniversary of the grant date and the remaining three-fourths, ratably over the next thirty-six month period, commencing on the thirteenth month from grant date, and (ii) as to 50% of the options, upon achievement of specific annual Company performance criteria. Options granted to the DPAB fully vest and become exercisable upon the achievement of specified performance conditions, as defined in the consulting agreements, and expires five years from grant date. | |||||||||||||||||||||
On June 6, 2013, the Board granted stock options to purchase 350,000 shares of Company common stock to Alexander K. Arrow in connection with his appointment to President and Chief Operating Officer. These stock options were granted at an exercise price of $4.00 per share and vest and become exercisable in equal quarterly amounts over a four-year period beginning on June 6, 2014. During the year ended December 31, 2014, Mr. Arrow ceased employment with the Company and forfeited 306,250 unvested stock options. His stock options expire on February 28, 2016. | |||||||||||||||||||||
On May 7, 2012, the Board granted to a consultant non-qualified stock options to purchase 65,000 shares of Company common stock, at a price per share of $2.55, the closing market price of Company common stock on the grant date. The options fully vest and become exercisable upon the achievement of specified performance conditions, as defined in the consulting agreement with this consultant, and the option expires five years from the grant date. The consulting agreement was terminated and the options were cancelled during the year ended December 31, 2014. As of December 31, 2014 and 2013, no stock-based compensation has been recognized in connection with these options. | |||||||||||||||||||||
Other Stock-Based Awards | |||||||||||||||||||||
On July 13, 2014, the Compensation Committee of the Board of the Company approved the Chief Executive Officer’s stock-based compensation consisting of non-qualified stock options to purchase 172,282 shares of Company common stock at an exercise price of $1.98 per share and 37,879 restricted stock units ("RSUs") valued at $1.98 per share. One-sixth of the stock options and one-sixth of the RSUs vested immediately, with the remaining five-sixths vesting ratably on a monthly basis over the twelve-month period ending on July 13, 2015. The fair value of the stock options of $1.31 per share was estimated using the Black-Scholes option-pricing model with assumptions of 3.6 years for expected term, 98.37% volatility and 1.65% risk-free interest rate. | |||||||||||||||||||||
On August 27, 2014, each non-employee director of the Company was granted 9,217 RSUs, totaling 36,868 RSUs valued at $2.17 per share, which vest over a 12-month period. |
Segment_Information
Segment Information | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Segment Information | NOTE 9 — SEGMENT INFORMATION | ||||||||||||
The Company currently operates in a single business segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. Sales to customers located in the United States accounted for approximately 63%, 63%, and 71% of net revenue and international sales accounted for approximately 37%, 37%, and 29% of net revenue for the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||
Net revenue by geographic location based on the location of customers was as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | $ | 29,848 | $ | 35,653 | $ | 40,524 | |||||||
International | 17,808 | 20,777 | 16,832 | ||||||||||
$ | 47,656 | $ | 56,430 | $ | 57,356 | ||||||||
No individual international country represented more than 10% of net revenue during the years ended December 31, 2014, 2013, and 2012. | |||||||||||||
Long-lived assets located outside of the United States at our foreign subsidiaries, totaled approximately $374,000 and $430,000 as of December 31, 2014 and 2013, respectively. |
Concentrations
Concentrations | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Risks And Uncertainties [Abstract] | ||||||||||||||
Concentrations | NOTE 10 — CONCENTRATIONS | |||||||||||||
Revenue from the Company’s products for the years ended December 31, 2014, 2013 and 2012 are as follows: | ||||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Laser systems | 61.9 | % | 68.6 | % | 73.8 | % | ||||||||
Imaging systems | 9 | % | 8.2 | % | 5.9 | % | ||||||||
Consumables and other | 13.7 | % | 11.5 | % | 10.4 | % | ||||||||
Services | 15.1 | % | 11.3 | % | 9.6 | % | ||||||||
License fees and royalties | 0.3 | % | 0.4 | % | 0.3 | % | ||||||||
Total revenue | 100 | % | 100 | % | 100 | % | ||||||||
Approximately 6%, 5%, and 3% of the Company’s revenue in 2014, 2013, and 2012, respectively, was generated through sales to HSIC worldwide. | ||||||||||||||
The Company maintains its cash and cash equivalent accounts with established commercial banks. Such cash deposits periodically exceed the Federal Deposit Insurance Corporation insured limit. | ||||||||||||||
No individual customer represented more than 10% of the Company’s accounts receivable at December 31, 2014 and 2013. | ||||||||||||||
The Company currently purchases certain key components of its products from single suppliers. Although there are a limited number of manufacturers of these key components, management believes that other suppliers could provide similar key components on comparable terms. A change in suppliers, however, could cause delays in manufacturing and a possible loss of sales, which could adversely affect the Company’s business, results of operations and financial condition. |
Subsequent_Events_unaudited
Subsequent Events (unaudited) | 12 Months Ended |
Dec. 31, 2014 | |
Disclosure Subsequent Events Additional Information [Abstract] | |
Subsequent Events (unaudited) | |
NOTE 11 — SUBSEQUENT EVENTS (unaudited) | |
Stock-Based Compensation | |
On January 2, 2015, the Compensation Committee of the Board granted non-qualified stock options to purchase 1,365,702 shares of Company common stock to certain officers of the Company in connection with a new compensation plan for 2015 and 86,000 shares of Company common stock to members of the Dental Professional Advisory Board (“DPAB”) as consultants for the Company. These options were granted at an exercise price of $2.64, the closing market price of the Company’s stock on grant date. Options granted to certain officers of the Company vest based on service period and performance of the Company, as defined in the applicable grant agreement, and expire ten years from grant date. Options granted to the DPAB fully vest and become exercisable upon the achievement of specified performance conditions, as defined in the consulting agreements, and expire five years from grant date. Further discussion of the stock-based compensation is disclosed in Note 8 – Stockholders’ Equity. | |
Class Action Lawsuits | |
The parties have reached an agreement in principle to settle the consolidated securities class action lawsuit, which is subject to the negotiation of a definitive settlement agreement and preliminary and final approval of the court. Although there can be no assurance that such agreement will be finalized, as of the date of these financial statements, management does not expect the Company to incur additional expenses related to this matter due to certain insurance coverage in place. Further discussion of the class action lawsuits is disclosed in Note 7 – Commitments and Contingencies. |
Schedule_IIConsolidated_Valuat
Schedule II-Consolidated Valuation and Qualifying Accounts and Reserves | 12 Months Ended | ||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||
Valuation And Qualifying Accounts [Abstract] | |||||||||||||||||
Schedule II-Consolidated Valuation and Qualifying Accounts and Reserves | BIOLASE, INC. | ||||||||||||||||
Schedule II — Consolidated Valuation and Qualifying Accounts and Reserves | |||||||||||||||||
For the Years Ended December 31, 2014, 2013, and 2012 | |||||||||||||||||
(in thousands) | |||||||||||||||||
Balance at | Charges | ||||||||||||||||
Beginning | (Reversals) to Cost | Balance at | |||||||||||||||
of Year | or Expenses | Deductions | End of Year | ||||||||||||||
Year Ended December 31, 2014: | |||||||||||||||||
Allowance for doubtful accounts | $ | 573 | $ | 1,261 | $ | (123 | ) | $ | 1,711 | ||||||||
Allowance for sales returns | 110 | — | — | 110 | |||||||||||||
Allowance for tax valuation | 35,566 | 6,503 | — | 42,069 | |||||||||||||
Year Ended December 31, 2013: | |||||||||||||||||
Allowance for doubtful accounts | $ | 304 | $ | 291 | $ | (22 | ) | $ | 573 | ||||||||
Allowance for sales returns | 110 | — | — | 110 | |||||||||||||
Allowance for tax valuation | 33,341 | 2,225 | — | 35,566 | |||||||||||||
Year Ended December 31, 2012: | |||||||||||||||||
Allowance for doubtful accounts | $ | 289 | $ | 241 | $ | (226 | ) | $ | 304 | ||||||||
Allowance for sales returns | 110 | — | — | 110 | |||||||||||||
Allowance for tax valuation | 33,784 | (443 | ) | — | 33,341 | ||||||||||||
Accounting_Policies_Policies
Accounting Policies (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation | ||||||||||||
The consolidated financial statements include the accounts of BIOLASE, Inc. and its wholly-owned subsidiaries. The Company has eliminated all material intercompany transactions and balances in the accompanying consolidated financial statements. Certain amounts for prior years have been reclassified to conform to the current year presentation. | |||||||||||||
Use of Estimates | Use of Estimates | ||||||||||||
The preparation of these consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“U. S. GAAP”) requires the Company to make estimates and assumptions that affect amounts reported in the consolidated financial statements and the accompanying notes. Significant estimates in these consolidated financial statements include allowances on accounts receivable, inventory and deferred taxes, as well as estimates for accrued warranty expenses, goodwill and the ability of goodwill to be realized, revenue deferrals for multiple element arrangements, effects of stock-based compensation and warrants, contingent liabilities and the provision or benefit for income taxes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ materially from those estimates. | |||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||||
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market (or, if none exists, the most advantageous market) for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value is based on assumptions that market participants would use, including a consideration of nonperformance risk. Under the accounting guidance for fair value hierarchy there are three levels of measurement inputs. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable, either directly or indirectly, other than Level 1. Level 3 inputs are unobservable due to little or no corroborating market data. | |||||||||||||
The Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, and accrued liabilities, approximate fair value because of the short maturity of these items. Financial instruments consisting of lines of credit approximate fair value, as the interest rates associated with the lines of credit approximates the market rates for debt securities with similar terms and risk characteristics. | |||||||||||||
Concentration of Credit Risk, Interest Rate Risk and Foreign Currency Exchange Rate Risk | Concentration of credit risk, interest rate risk and foreign currency exchange rate risk | ||||||||||||
Financial instruments which potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The Company maintains its cash and cash equivalents and restricted cash with established commercial banks. At times, balances may exceed federally insured limits. To minimize the risk associated with trade accounts receivable, management performs ongoing credit evaluations of customers’ financial condition and maintains relationships with the Company’s customers that allow management to monitor current changes in business operations so the Company can respond as needed. The Company does not, generally, require customers to provide collateral before it sells them its products. However it has required certain distributors to make prepayments for significant purchases of products. For the years ended December 31, 2014, 2013, and 2012, worldwide sales to the Company’s largest distributor, Henry Schein, Inc. (“HSIC”), accounted for approximately 6%, 5%, and 3%, respectively, of our net sales. | |||||||||||||
Substantially all of the Company’s revenue is denominated in U.S. dollars, including sales to international distributors. Only a small portion of its revenue and expenses is denominated in foreign currencies, principally the Euro and Indian Rupee. The Company’s foreign currency expenditures primarily consist of the cost of maintaining offices, including the facilities, consulting services and employee-related costs. Through the year ended December 31, 2014, the Company has not entered into any hedging contracts. Future fluctuations in the value of the U.S. dollar may affect the price competitiveness of the Company’s products outside the United States. | |||||||||||||
Outstanding balances on the Company’s lines of credit expose it to variable interest rate risks associated with fluctuations in the daily prime rate and LIBOR rate. Under the Company’s current policies, it does not use interest rate derivative instruments to manage exposure to interest rate changes. Increases in the daily prime rate or LIBOR rate would increase the costs of borrowing and accordingly, the interest expense the Company must pay. However, as of December 31, 2014, the Company did not have a line of credit facility. | |||||||||||||
Liquidity and Management's Plans | Liquidity and Management’s Plans | ||||||||||||
The Company has suffered recurring losses from operations and has not generated cash from operations for the three years ended December 31, 2014. During the year ended December 31, 2014, the principle sources of liquidity for the Company were its available borrowing capacity on the lines of credit with Comerica Bank and the net proceeds from the February 10, 2014, July 22, 2014, and November 7, 2014 sale by the Company of $4.8 million, $11.5 million, and $34.8 million respectively, of unregistered shares of Company common stock discussed below. | |||||||||||||
At December 31, 2014, the Company had approximately $38.6 million in working capital. The Company’s principal sources of liquidity at December 31, 2014 consisted of approximately $31.6 million in cash and cash equivalents and $9.0 million of net accounts receivable. | |||||||||||||
The available borrowing capacity on the Company’s lines of credit with Comerica Bank, discussed further in Note 5 — Lines of Credit and Other Borrowings, and the net proceeds from equity transactions, discussed further in Note 8 – Stockholders’ Equity, have been the Company’s principal sources of liquidity during the year ended December 31, 2014. On July 28, 2014, the Company repaid all amounts outstanding under its revolving credit facilities with Comerica Bank, including principal, accrued interest, and fees which totaled approximately $2.9 million and the credit facilities were terminated. | |||||||||||||
On November 7, 2014, the Company completed a private placement with several institutional and individual investors, and certain of its directors and officers, under which the Company agreed to sell an aggregate of 14,162,873 unregistered shares of its common stock at the price of $2.39 per share, the closing price of Company common stock on November 3, 2014, and warrants to purchase up to an aggregate of 9,205,862 unregistered shares of its common stock at an exercise price of $4.00 per share. Gross proceeds from the sale were $35.0 million, and net proceeds, after offering expenses of approximately $235,000, were approximately $34.8 million. The warrants become exercisable on May 7, 2015, six months after the closing of the private placement, and have a term of three years from the date of issuance. The Company is using the proceeds for working capital and general corporate purposes. In connection with the registration rights granted to these investors, the Company filed a registration statement on Form S-3 with the SEC, which was declared effective on December 12, 2014. | |||||||||||||
The Company completed a private placement on July 22, 2014 with several institutional and individual investors, and several of the Company’s directors and officers, wherein the Company sold 6,250,000 unregistered shares of its common stock at a price of $1.92 per share (the closing price of Company common stock on July 18, 2014). Gross proceeds from the sale totaled $12 million, and net proceeds, after offering expenses of approximately $462,000, were approximately $11.5 million. In connection with the registration rights granted to these investors, the Company filed a registration statement on Form S-3 with the SEC, which was declared effective on September 18, 2014. | |||||||||||||
On February 10, 2014, the Company entered into a subscription agreement with Oracle Partners L.P., Oracle Institutional Partners, L.P., and Oracle Ten Fund Master, L.P., under which the Company offered an aggregate of 1,945,525 unregistered shares of Company common stock in a private placement at a price of $2.57 per share. Gross proceeds from the sale were $5.0 million, and net proceeds, after offering expenses of approximately $188,000, were approximately $4.8 million. The Company used the proceeds to repay the Company’s lines of credit and for working capital and general corporate purposes. | |||||||||||||
Additional capital requirements may depend on many factors, including, among other things, the rate at which the Company’s business grows, demands for working capital, manufacturing capacity, and any acquisitions that the Company may pursue. From time to time, the Company could be required, or may otherwise attempt, to raise capital through either equity or debt offerings. The Company cannot provide assurance that it will be able to successfully enter into any such equity or debt financings in the future or that the required capital would be available on acceptable terms, if at all, or that any such financing activity would not be dilutive to its stockholders. | |||||||||||||
Cash and Cash Equivalents | Cash and Cash Equivalents | ||||||||||||
The Company considers all highly liquid investments with maturities of three months or less when purchased, as cash equivalents. Cash equivalents are carried at cost, which approximates fair market value. | |||||||||||||
Accounts Receivable | Accounts Receivable | ||||||||||||
Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The allowance for doubtful accounts is the Company’s best estimate of the amount of probable credit losses in its existing accounts receivable. The Company evaluates its allowance for doubtful accounts based upon its knowledge of customers and their compliance with credit terms. The evaluation process includes a review of customers’ accounts on a regular basis which incorporates input from sales, service, and finance personnel. The review process evaluates all account balances with amounts outstanding more than 90 days from the due date and other specific amounts for which information obtained indicates that the balance may be uncollectible. The allowance for doubtful accounts is adjusted based on such evaluation, with a corresponding provision included in general and administrative expenses. Account balances are charged off against the allowance when it is probable the receivable will not be recovered. The Company does not have any off-balance-sheet credit exposure related to its customers. | |||||||||||||
Inventory | Inventory | ||||||||||||
The Company values inventory at the lower of cost, determined using the first-in, first-out method, or market. The carrying value of inventory is evaluated periodically for excess quantities and obsolescence. Management evaluates quantities on hand, physical condition, and technical functionality as these characteristics may be impacted by anticipated customer demand for current products and new product introductions. The allowance is adjusted based on such evaluation, with a corresponding provision included in cost of revenue. Abnormal amounts of idle facility expenses, freight, handling costs and wasted material are recognized as current period charges and the Company’s allocation of fixed production overhead is based on the normal capacity of our production facilities. | |||||||||||||
Property, Plant and Equipment | Property, Plant, and Equipment | ||||||||||||
Property, plant, and equipment is stated at acquisition cost less accumulated depreciation. Maintenance and repairs are expensed as incurred. Upon sale or disposition of assets, any gain or loss is included in the consolidated statements of operations. | |||||||||||||
The cost of property, plant, and equipment is depreciated using the straight-line method over the following estimated useful lives of the respective assets, except for leasehold improvements, which are depreciated over the lesser of the estimated useful lives of the respective assets or the related lease terms. | |||||||||||||
Building | 30 years | ||||||||||||
Leasehold improvements | 3 to 5 years | ||||||||||||
Equipment and computers | 3 to 5 years | ||||||||||||
Furniture and fixtures | 5 years | ||||||||||||
Depreciation expense for the years ended December 31, 2014, 2013, and 2012 totaled approximately $627,000, $484,000, and $377,000, respectively. | |||||||||||||
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets | ||||||||||||
Goodwill and other intangible assets with indefinite lives are not subject to amortization but are evaluated for impairment annually or whenever events or changes in circumstances indicate that the asset might be impaired. The Company operates in one operating segment and has one operating unit; therefore goodwill is tested for impairment at the consolidated level against the fair value of the Company. The fair value of a reporting unit refers to the amount at which the unit as a whole could be bought or sold in a current transaction between willing parties. Quoted market prices in active markets are the best evidence of fair value and are used as the basis for measurement, if available. Management assesses potential impairment on an annual basis on June 30th and compares the Company’s market capitalization to its carrying amount, including goodwill. A significant decrease in the Company’s stock price could indicate a material impairment of goodwill which, after further analysis, could result in a material charge to operations. If goodwill is considered impaired, the impairment loss to be recognized is measured by the amount by which the carrying amount of the goodwill exceeds the implied fair value of that goodwill. Inherent in the Company’s fair value determinations are certain judgments and estimates, including projections of future cash flows, the discount rate reflecting the inherent risk in future cash flows, the interpretation of current economic indicators and market valuations, and strategic plans with regard to operations. A change in these underlying assumptions could cause a change in the results of the tests, which could cause the fair value of the reporting unit to be less than its respective carrying amount. | |||||||||||||
Costs incurred to acquire and successfully defend patents, and costs incurred to acquire trademarks and trade names are capitalized. Costs related to the internal development of technologies that are ultimately patented are expensed as incurred. Intangible assets, except those determined to have an indefinite life, are amortized using the straight-line method or over management’s best estimate of the pattern of economic benefit over the estimated useful life of the assets. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. | |||||||||||||
Long-Lived Assets | Long-Lived Assets | ||||||||||||
The carrying values of long-lived assets, including intangible assets subject to amortization, are reviewed when indicators of impairment, such as reductions in demand or significant economic slowdowns, are present. Reviews are performed to determine whether carrying value of an asset is impaired based on comparisons to undiscounted expected future cash flows. If this comparison indicates that there is impairment, the impaired asset is written down to fair value, which is typically calculated using discounted expected future cash flows. Impairment is based on the excess of the carrying amount over the fair value of those assets. | |||||||||||||
Other Comprehensive (Loss) Income | Other Comprehensive (Loss) Income | ||||||||||||
Other comprehensive (loss) income encompasses the change in equity from transactions and other events and circumstances from non-owner sources and is included as a component of stockholders’ equity but is excluded from net (loss) income. Accumulated other comprehensive gain (loss) is comprised of foreign currency translation adjustments. | |||||||||||||
Foreign Currency Translation and Transactions | Foreign Currency Translation and Transactions | ||||||||||||
Transactions of the Company’s German, Spanish, Australian, and Indian subsidiaries are denominated in their local currencies. The results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at end-of-period exchange rates. Translation gains or losses are shown as a component of accumulated other comprehensive gain (loss) in stockholders’ equity. Gains and losses resulting from foreign currency transactions, which are denominated in a currency other than the entity’s functional currency, are included in the consolidated statements of operations. | |||||||||||||
Revenue Recognition | Revenue Recognition | ||||||||||||
The Company’s products are sold in North America directly to customers through its direct sales force and through non-exclusive distributors. The Company sells its products internationally through exclusive and non-exclusive distributors as well as directly to customers in certain countries. Sales are recorded upon shipment from the Company’s facility and payment of its invoices is generally due within 90 days or less. Internationally, the Company primarily sells products through independent distributors. Revenue is recorded based on four basic criteria that must be met before revenue can be recognized: (1) persuasive evidence of an arrangement exists; (2) delivery has occurred and title and the risks and rewards of ownership have been transferred to the customer or services have been rendered; (3) the price is fixed or determinable; and (4) collectability is reasonably assured. Revenue is recorded for all sales upon shipment assuming all other revenue recognition criteria are met. | |||||||||||||
Sales of the Company’s laser systems include separate deliverables consisting of the product, disposables used with the laser systems, installation, and training. The Company applies the relative selling price method, which requires that arrangement consideration be allocated at the inception of an arrangement to all deliverables using the relative selling price method. This requires the Company to use (estimated) selling prices of each of the deliverables in the total arrangement. The sum of those prices is then compared to the arrangement, and any difference is applied to the separate deliverable ratably. This method also establishes a selling price hierarchy for determining the selling price of a deliverable, which includes: (1) vendor-specific objective evidence (“VSOE”) if available, (2) third-party evidence if VSOE is not available, and (3) estimated selling price if neither VSOE nor third-party evidence is available. VSOE is determined based on the value the Company sells the undelivered element to a customer as a stand-alone product. Revenue attributable to the undelivered elements is included in deferred revenue when the product is shipped and is recognized when the related service is performed. Disposables not shipped at time of sale and installation services are typically shipped or installed within 30 days. Training is included in deferred revenue when the product is shipped and is recognized when the related service is performed or upon the appropriate expiration of time offered under the agreement. The adoption of the relative selling price method does not significantly change the value of revenue recognized. Deferred revenue attributable to undelivered elements, which primarily consists of training, totaled approximately $952,000 and $1.8 million as of December 31, 2014 and 2013, respectively. | |||||||||||||
Key judgments of the Company’s revenue recognition include the collectability of payment from the customer, the satisfaction of all elements of the arrangement having been delivered, and that no additional customer credits and discounts are needed. The Company evaluates the customer’s credit worthiness prior to the shipment of the product. Based on the assessment of the credit information available, the Company may determine the credit risk is higher than normally acceptable, and will either decline the purchase or defer the revenue until payment is reasonably assured. Future obligations required at the time of sale may also cause the Company to defer the revenue until the obligation is satisfied. | |||||||||||||
Although all sales are final, the Company accepts returns of products in certain, limited circumstances and records a provision for sales returns based on historical experience concurrent with the recognition of revenue. The sales returns allowance is recorded as a reduction of accounts receivable and revenue. As of December 31, 2014 and 2013, $110,000 and $110,000, respectively, was recorded as a reduction of accounts receivable for sales returns. | |||||||||||||
Extended warranty contracts, which are sold to laser and certain imaging customers, are recorded as revenue on a straight-line basis over the period of the contracts, which is typically one year. Included in deferred revenue for each of the years ended December 31, 2014 and 2013, was approximately $1.5 million and $1.6 million, respectively, for extended warranty contracts. | |||||||||||||
For sales transactions involving used laser trade-ins, the Company records the purchased trade-ins as inventory at the fair value of the asset surrendered with the offset to accounts receivable. In determining the estimated fair value of used laser trade-ins, Management makes an assessment of usable parts, key components, and consider the ultimate resale value of the certified pre-owned (or “CPO”) laser with applicable margins. The Company sells these CPO laser trade-ins as refurbished lasers following its laser system revenue recognition policy. Trade-in rights are not established nor negotiated with customers during the initial sales transaction of the original lasers. Trade-in rights are promotional events used at Management’s discretion to encourage existing laser customers to purchase new lasers by offering perceived discounts in exchange for customers trading in original lasers. A customer is not required to trade-in a laser nor is the Company required to accept a trade-in, however, the promotional value offered in exchange for the trade-in laser is not offered without a laser trade-in. The transaction is treated as a monetary transaction as each sale transaction involving a customer trade-in includes significant boot of greater than 25% of the fair value of the exchange. As a monetary transaction, the sale is recognized following the Company’s laser system revenue recognition policy. There have been no sales transactions in which the cash consideration was less than 25% of the total transaction value. | |||||||||||||
From time to time, the Company may offer sales incentives and promotions on its products. The cost of sales incentives are recorded at the date at which the related revenue is recognized as a reduction in revenue, an increase in cost of goods sold or a selling expense, as applicable, or later, in the case of incentives offered after the initial sale has occurred. | |||||||||||||
Provision for Warranty Expense | Provision for Warranty Expense | ||||||||||||
The Company provides warranties against defects in materials and workmanship of its laser systems for specified periods of time. For the year ended December 31, 2014, WaterLase and Diode systems sold domestically are covered by the Company’s warranty for a period of two years. For the years ended December 31, 2013 and 2012, WaterLase systems sold domestically were covered by the Company’s warranty for a period of one year while the Company’s Diode systems warranty period was for two years from date of sale by the Company or the distributor to the end-user. For the year ended December 31, 2014, WaterLase and Diode systems sold internationally are covered by the Company’s warranty for a period of twenty eight months. For the years ended December 31, 2013 and 2012, WaterLase systems sold internationally were covered by the Company’s warranty for a period of sixteen months while its Diode systems warranty period was up to twenty eight months from date of sale to the international distributor. Estimated warranty expenses are recorded as an accrued liability with a corresponding provision to cost of revenue. This estimate is recognized concurrent with the recognition of revenue on the sale to the distributor or end-user. Warranty expenses expected to be incurred after one year from the time of sale to the distributor are classified as a long-term warranty accrual. The Company’s overall accrual is based on its historical experience and Management’s expectation of future conditions, taking into consideration the location and type of customer and the type of laser, which directly correlate to the materials and components under warranty, the duration of the warranty period, and the logistical costs to service the warranty. Additional factors that may impact the Company’s warranty accrual include changes in the quality of materials, leadership and training of the production and services departments, knowledge of the lasers and workmanship, training of customers, and adherence to the warranty policies. Additionally, an increase in warranty claims or in the costs associated with servicing those claims would likely result in an increase in the accrual and a decrease in gross profit. The Company offers extended warranties on certain imaging products. However, all imaging products are initially covered by the manufacturer’s warranties. | |||||||||||||
Changes in the initial product warranty accrual and the expenses incurred under our initial and extended warranties for the years ended December 31 are included within accrued liabilities on the consolidated balance sheets and were as follows (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Initial warranty accrual, beginning balance | $ | 1,096 | $ | 1,699 | $ | 2,218 | |||||||
Provision for estimated warranty cost | 1,214 | 475 | 1,705 | ||||||||||
Warranty expenditures | (861 | ) | (1,078 | ) | (2,224 | ) | |||||||
Initial warranty accrual, ending balance | 1,449 | 1,096 | 1,699 | ||||||||||
Less warranty accrual, long term | 519 | — | — | ||||||||||
Total warranty accrual, current portion | $ | 930 | $ | 1,096 | $ | 1,699 | |||||||
Shipping and Handling Costs and Revenues | Shipping and Handling Costs and Revenues | ||||||||||||
Shipping and handling costs are expensed as incurred and are recorded as a component of cost of revenue. Charges to customers for shipping and handling are included as a component of revenue. | |||||||||||||
Advertising Costs | Advertising Costs | ||||||||||||
Advertising costs are expensed as incurred and totaled approximately $543,000, $1.5 million, and $907,000 for the years ended December 31, 2014, 2013, and 2012, respectively. | |||||||||||||
Engineering and Development | Engineering and Development | ||||||||||||
Engineering and development expenses are generally expensed as incurred and consist of engineering personnel salaries and benefits, prototype supplies, contract services and consulting fees related to product development. | |||||||||||||
Stock-Based Compensation | Stock-Based Compensation | ||||||||||||
During the years ended December 31, 2014, 2013, and 2012, the Company recognized compensation cost related to stock options of $1.2 million, $1.6 million, and $1.6 million, respectively, based on the grant date fair value. The net impact to earnings for the years ended December 31, 2014, 2013, and 2012, was $(0.03), $(0.05), and $(0.05) per diluted share, respectively. The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Cost of revenue | $ | 134 | $ | 288 | $ | 245 | |||||||
Sales and marketing | 401 | 585 | 514 | ||||||||||
General and administrative | 616 | 594 | 668 | ||||||||||
Engineering and development | 82 | 142 | 173 | ||||||||||
$ | 1,233 | $ | 1,609 | $ | 1,600 | ||||||||
As of December 31, 2014 and 2013, the Company had $1.4 million and $2.7 million, respectively, of total unrecognized compensation cost, net of estimated forfeitures, related to unvested share-based compensation arrangements granted under its existing plans. The cost is expected to be recognized over a weighted average period of 0.9 years as of December 31, 2014. | |||||||||||||
The Company uses the Black-Scholes option valuation model for estimating the fair value of traded options. This option pricing model requires the Company to make several assumptions regarding the key variables used to calculate the fair value of its stock options. The risk-free interest rate used is based on the U.S. Treasury yield curve in effect for the expected lives of the options at their dates of grant. Since July 1, 2005, the Company has used a dividend yield of zero as it does not intend to pay cash dividends on its common stock in the foreseeable future. The most critical assumptions used in calculating the fair value of stock options is the expected volatility of Company common stock and the expected life of the option. Management believes that the historic volatility of Company common stock is a reliable indicator of future volatility, and accordingly, a stock volatility factor based on the historical volatility of Company common stock over a period of time is used in approximating the estimated volatility of new stock options. The expected term is estimated by analyzing the Company’s historical share option exercise experience over a five-year period. Compensation expense is recognized using the straight-line method for all stock-based awards. Compensation expense is recognized only for those options expected to vest, with forfeitures estimated at the date of grant based on historical experience and future expectations. Forfeitures are estimated at the time of the grant and revised in subsequent periods as actual forfeitures differ from those estimates. | |||||||||||||
The stock option fair values were estimated using the Black-Scholes option-pricing model with the following assumptions: | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Expected term (years) | 3.83 | 3.65 | 3.7 | ||||||||||
Volatility | 94 | % | 84 | % | 97 | % | |||||||
Annual dividend per share | $ | — | $ | — | $ | — | |||||||
Risk-free interest rate | 1.66 | % | 1.04 | % | 0.77 | % | |||||||
Excise Tax | Excise Tax | ||||||||||||
Commencing January 1, 2013, certain of the Company’s product sales have been subject to the medical device excise tax. The Company has included such taxes separately as a component of operating expense. | |||||||||||||
Income Tax | Income Taxes | ||||||||||||
Differences between accounting for income taxes for financial statement purposes and accounting for tax return purposes are stated as deferred tax assets or deferred tax liabilities in the accompanying consolidated financial statements. The provision for income taxes represents the tax payable for the period and the change during the period in deferred tax assets and liabilities. The Company establishes a valuation allowance when it is more likely than not that the deferred tax assets will not be realized. | |||||||||||||
On January 1, 2007, the Company adopted the interpretations issued by the Financial Accounting Standards Board (“FASB”) which establish a single model to address accounting for uncertain tax positions. The interpretations clarify the accounting for income taxes by prescribing a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements and also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting in interim periods, disclosure and transition. | |||||||||||||
The income tax provisions for the years ended December 31, 2014 and 2013 were calculated using the discrete year-to-date method, which management determined to be more appropriate than the annual effective rate method which was used to calculate the income tax provision for the quarter ended March 31, 2013. See Note 6 – Income Taxes for additional disclosures related to the Company’s income tax. | |||||||||||||
Net Loss Per Share-Basic and Diluted | Net Loss Per Share — Basic and Diluted | ||||||||||||
Basic net income (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of common shares outstanding for the period. In computing diluted net income (loss) per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Common shares outstanding, as included in the calculation of basic and diluted loss per share, includes retroactive adjustments to reflect increases resulting from stock dividends that have been paid through the date that these financial statements are issued. | |||||||||||||
Outstanding stock options and warrants to purchase approximately 10,094,000, 6,039,000, and 4,713,000 shares were not included in the calculation of diluted loss per share amounts for the years ended December 31, 2014, 2013, and 2012, respectively, as their effect would have been anti-dilutive. | |||||||||||||
Recent Accounting Pronouncements | Recent Accounting Pronouncements | ||||||||||||
Changes to U.S. GAAP are established by the FASB in the form of accounting standards updates (“ASU’s”) to the FASB’s Accounting Standards Codification (“ASC”). | |||||||||||||
The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to not be applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations. | |||||||||||||
Newly Adopted Accounting Standards | |||||||||||||
In March 2013, the FASB issued guidance on a parent’s accounting for the cumulative translation adjustment upon de-recognition of certain subsidiaries or groups of assets within a foreign entity or of an investment in a foreign entity. The revised guidance requires that the parent release any related cumulative translation adjustment into net income only if the sale or transfer results in the complete or substantially complete liquidation of the foreign entity in which the subsidiary or group of assets had resided. The guidance is effective prospectively for reporting periods beginning after December 15, 2013. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. | |||||||||||||
Accounting Standards Not Yet Adopted | |||||||||||||
In May 2014, the FASB issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. | |||||||||||||
The standard is effective for annual periods beginning after December 15, 2016, and interim periods therein, using either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). The Company is currently evaluating the impact of the pending adoption of ASU 2014-09 on its consolidated financial statements and has not yet determined the method by which it will adopt the standard during the year ending December 31, 2017. | |||||||||||||
In August 2014, the FASB issued ASU No. 2014-15, Disclosure of Uncertainties About an Entity’s Ability to Continue as a Going Concern. The 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 and provides guidance on determining when and how to disclose going concern uncertainties in the financial statements. Certain disclosures will be required if conditions give rise to substantial doubt about an entity’s ability to continue as a going concern. ASU 2014-15 applies to all entities and is effective for annual and interim reporting periods ending after December 15, 2016, with early adoption permitted. The Company does not expect that the adoption of this standard will have a material effect on its consolidated financial statements. | |||||||||||||
Commitments And Contingencies Disclosure [Abstract] | |||||||||||||
Litigation | The Company discloses material loss contingencies deemed to be reasonably possible and accrues for loss contingencies when, in consultation with its legal advisors, management concludes that a loss is probable and reasonably estimable. The ability to predict the ultimate outcome of such matters involves judgments, estimates, and inherent uncertainties. The actual outcome of such matters could differ materially from management’s estimates. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
Estimated Useful Lives of Property, Plant and Equipment | The cost of property, plant, and equipment is depreciated using the straight-line method over the following estimated useful lives of the respective assets, except for leasehold improvements, which are depreciated over the lesser of the estimated useful lives of the respective assets or the related lease terms. | ||||||||||||
Building | 30 years | ||||||||||||
Leasehold improvements | 3 to 5 years | ||||||||||||
Equipment and computers | 3 to 5 years | ||||||||||||
Furniture and fixtures | 5 years | ||||||||||||
Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties | Changes in the initial product warranty accrual and the expenses incurred under our initial and extended warranties for the years ended December 31 are included within accrued liabilities on the consolidated balance sheets and were as follows (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Initial warranty accrual, beginning balance | $ | 1,096 | $ | 1,699 | $ | 2,218 | |||||||
Provision for estimated warranty cost | 1,214 | 475 | 1,705 | ||||||||||
Warranty expenditures | (861 | ) | (1,078 | ) | (2,224 | ) | |||||||
Initial warranty accrual, ending balance | 1,449 | 1,096 | 1,699 | ||||||||||
Less warranty accrual, long term | 519 | — | — | ||||||||||
Total warranty accrual, current portion | $ | 930 | $ | 1,096 | $ | 1,699 | |||||||
Summary of Income Statement Classification of Compensation Expense | During the years ended December 31, 2014, 2013, and 2012, the Company recognized compensation cost related to stock options of $1.2 million, $1.6 million, and $1.6 million, respectively, based on the grant date fair value. The net impact to earnings for the years ended December 31, 2014, 2013, and 2012, was $(0.03), $(0.05), and $(0.05) per diluted share, respectively. The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Cost of revenue | $ | 134 | $ | 288 | $ | 245 | |||||||
Sales and marketing | 401 | 585 | 514 | ||||||||||
General and administrative | 616 | 594 | 668 | ||||||||||
Engineering and development | 82 | 142 | 173 | ||||||||||
$ | 1,233 | $ | 1,609 | $ | 1,600 | ||||||||
Assumptions on Estimation of Stock Option Fair Values | The stock option fair values were estimated using the Black-Scholes option-pricing model with the following assumptions: | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Expected term (years) | 3.83 | 3.65 | 3.7 | ||||||||||
Volatility | 94 | % | 84 | % | 97 | % | |||||||
Annual dividend per share | $ | — | $ | — | $ | — | |||||||
Risk-free interest rate | 1.66 | % | 1.04 | % | 0.77 | % | |||||||
Supplementary_Balance_Sheet_In1
Supplementary Balance Sheet Information (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Disclosure Text Block Supplement [Abstract] | |||||||||
Components of Accounts Receivable, Net of Allowance | |||||||||
December 31, | |||||||||
ACCOUNTS RECEIVABLE (in thousands): | 2014 | 2013 | |||||||
Components of accounts receivable, net of allowances, | |||||||||
are as follows: | |||||||||
Trade | $ | 8,887 | $ | 10,960 | |||||
Royalties | 88 | 82 | |||||||
Other | 29 | 85 | |||||||
Total receivables, net | $ | 9,004 | $ | 11,127 | |||||
Components of Inventory | |||||||||
December 31, | |||||||||
INVENTORY, NET (in thousands): | 2014 | 2013 | |||||||
Components of inventory, net of allowances, are as follows: | |||||||||
Raw materials | $ | 2,857 | $ | 3,094 | |||||
Work-in-process | 1,348 | 1,727 | |||||||
Finished goods | 8,303 | 6,557 | |||||||
Inventory, net | $ | 12,508 | $ | 11,378 | |||||
Components of Property, Plant and Equipment | |||||||||
December 31, | |||||||||
PROPERTY, PLANT, AND EQUIPMENT, NET (in thousands): | 2014 | 2013 | |||||||
Components of property, plant, and equipment, net of | |||||||||
depreciation, are as follows: | |||||||||
Building | $ | 226 | $ | 256 | |||||
Leasehold improvements | 1,197 | 1,207 | |||||||
Equipment and computers | 4,948 | 6,078 | |||||||
Furniture and fixtures | 413 | 1,049 | |||||||
Construction in progress | 4 | 8 | |||||||
6,788 | 8,598 | ||||||||
Accumulated depreciation and amortization | (5,669 | ) | (6,971 | ) | |||||
1,119 | 1,627 | ||||||||
Land | 176 | 199 | |||||||
Property, plant, and equipment, net | $ | 1,295 | $ | 1,826 | |||||
Components of Accrued Liabilities | |||||||||
Accrued liabilities are comprised of the following: | |||||||||
December 31, | |||||||||
ACCRUED LIABILITIES (in thousands): | 2014 | 2013 | |||||||
Components of accrued liabilities are as follows: | |||||||||
Payroll and benefits | $ | 1,905 | $ | 1,898 | |||||
Warranty accrual, current portion | 930 | 1,096 | |||||||
Taxes | 139 | 338 | |||||||
Accrued professional services | 1,581 | 911 | |||||||
Accrued insurance premium | 450 | 428 | |||||||
Other | 183 | 326 | |||||||
Accrued liabilities | $ | 5,188 | $ | 4,997 | |||||
Components of Deferred Revenue | |||||||||
Deferred revenue is comprised of the following: | |||||||||
December 31, | |||||||||
DEFERRED REVENUE (in thousands): | 2014 | 2013 | |||||||
Components of deferred revenue are as follows: | |||||||||
Undelivered elements (training, installation, product and | $ | 952 | $ | 1,823 | |||||
support services) | |||||||||
Extended warranty contracts | 1,542 | 1,642 | |||||||
Total Deferred Revenue | 2,494 | 3,465 | |||||||
Less Long-Term amounts: | |||||||||
Extended warranty contracts | — | 1 | |||||||
Total Deferred Revenue - Long Term | — | 1 | |||||||
Total Deferred Revenue - Current | $ | 2,494 | $ | 3,464 | |||||
Intangible_Assets_and_Goodwill1
Intangible Assets and Goodwill (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Summary of Intangible Assets, Related Accumulated Amortization and Goodwill | The following table presents the details of the Company’s intangible assets, related accumulated amortization and goodwill (in thousands): | ||||||||||||||||||||||||||||||||
As of December 31, 2014 | As of December 31, 2013 | ||||||||||||||||||||||||||||||||
Accumulated | Accumulated | ||||||||||||||||||||||||||||||||
Gross | Amortization | Impairment | Net | Gross | Amortization | Impairment | Net | ||||||||||||||||||||||||||
Patents (4-10 years) | $ | 1,914 | $ | (1,907 | ) | $ | — | $ | 7 | $ | 1,914 | $ | (1,895 | ) | $ | — | $ | 19 | |||||||||||||||
Trademarks (6 years) | 69 | (69 | ) | — | — | 69 | (69 | ) | — | — | |||||||||||||||||||||||
Other (4 to 6 years) | 817 | (710 | ) | — | 107 | 817 | (653 | ) | — | 164 | |||||||||||||||||||||||
Total | $ | 2,800 | $ | (2,686 | ) | $ | — | $ | 114 | $ | 2,800 | $ | (2,617 | ) | $ | — | $ | 183 | |||||||||||||||
Goodwill (Indefinite life) | $ | 2,926 | $ | 2,926 | $ | 2,926 | $ | 2,926 | |||||||||||||||||||||||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||
Summary of Income Tax Current and Deferred Provision (Benefit) | The following table presents the current and deferred provision (benefit) for income taxes for the years ended December 31 (in thousands): | |||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Current: | ||||||||||||||
Federal | $ | — | $ | (138 | ) | $ | — | |||||||
State | 27 | 31 | 18 | |||||||||||
Foreign | 25 | (27 | ) | 32 | ||||||||||
52 | (134 | ) | 50 | |||||||||||
Deferred: | ||||||||||||||
Federal | 60 | 72 | 57 | |||||||||||
State | — | (118 | ) | 12 | ||||||||||
Foreign | — | 16 | (8 | ) | ||||||||||
60 | (30 | ) | 61 | |||||||||||
$ | 112 | $ | (164 | ) | $ | 111 | ||||||||
Federal Income Tax Provision Compared With Statutory Rates | The provision for income taxes differs from the amount that would result from applying the federal statutory rate as follows for the years ended December 31: | |||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Statutory regular federal income tax rate | (34.0 | ) | % | (34.0 | ) | % | (34.0 | ) | % | |||||
Change in valuation allowance | 37.4 | % | 27 | % | (13.0 | ) | % | |||||||
Tax return to prior year provision adjustments | — | % | (0.9 | ) | % | 16.2 | % | |||||||
Expiration of federal net operating losses | — | % | — | % | 28.2 | % | ||||||||
Reduction of net operating loss attributes | — | % | (3.1 | ) | % | (3.7 | ) | % | ||||||
State tax benefit (net of federal benefit) | (3.3 | ) | % | (4.2 | ) | % | 4.1 | % | ||||||
Research credits | (1.9 | ) | % | (2.1 | ) | % | — | |||||||
Foreign amounts with no tax benefit | (0.1 | ) | % | (0.2 | ) | % | (0.6 | ) | % | |||||
Non-deductible expenses | 1 | % | 1.6 | % | 6.1 | % | ||||||||
Effect of change in rate | 2.3 | % | 14.2 | % | — | % | ||||||||
Other | (0.8 | ) | % | 0.3 | % | 0.5 | % | |||||||
Total | 0.6 | % | (1.4 | ) | % | 3.8 | % | |||||||
Summary of Net Deferred Tax Assets and Net Deferred Tax Liabilities | The components of the deferred income tax assets and liabilities as of December 31 (in thousands): | |||||||||||||
2014 | 2013 | |||||||||||||
Capitalized intangible assets for tax purposes | $ | 202 | $ | 283 | ||||||||||
Reserves not currently deductible | 1,871 | 1,702 | ||||||||||||
Deferred revenue | 8 | 8 | ||||||||||||
Stock options | 2,911 | 2,565 | ||||||||||||
State taxes | 8 | 7 | ||||||||||||
Income tax credits | 2,200 | 1,583 | ||||||||||||
Inventory | 1,225 | 871 | ||||||||||||
Property and equipment | 280 | 376 | ||||||||||||
Other comprehensive income | 222 | 109 | ||||||||||||
Unrealized gain on foreign currency | 136 | 142 | ||||||||||||
Net operating losses | 33,140 | 28,058 | ||||||||||||
Total deferred tax assets | 42,203 | 35,704 | ||||||||||||
Valuation allowance | (42,069 | ) | (35,566 | ) | ||||||||||
Net deferred tax assets | 134 | 138 | ||||||||||||
Capitalized intangible assets | (752 | ) | (696 | ) | ||||||||||
Other | (59 | ) | (59 | ) | ||||||||||
Total deferred tax liabilities | (811 | ) | (755 | ) | ||||||||||
Net deferred tax liabilities | $ | (677 | ) | $ | (617 | ) | ||||||||
Summary of Unrecognized Tax Benefits | The following table summarizes the activity related to the Company’s unrecognized tax benefits during the year ended December 31, 2014 (in thousands): | |||||||||||||
Balance at January 1, 2014 | $ | 568 | ||||||||||||
Additions for tax positions related to the prior year | — | |||||||||||||
Lapse of statute of limitations | — | |||||||||||||
Balance at December 31, 2014 | $ | 568 | ||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments And Contingencies Disclosure [Abstract] | |||||
Future Minimum Lease Income Under Non-cancelable Operating Leases | Future minimum rental commitments under operating lease agreements with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands): | ||||
2015 | $ | 597 | |||
2016 | 306 | ||||
2017 | 131 | ||||
2018 | — | ||||
Thereafter | — | ||||
Total future minimum lease obligations | $ | 1,034 | |||
Stockholders_Equity_Tables
Stockholders' Equity (Tables) | 12 Months Ended | ||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||
Summary of Option Activity Under Stock Option Plans | Stock options may be granted as incentive or non-qualified options; however, no incentive stock options have been granted to date. The exercise price of options is at least equal to the market price of the stock as of the date of grant. Options may vest over various periods but typically vest on a quarterly basis over three years. Options expire after five years, ten years or within a specified time from termination of employment, if earlier. The Company issues new shares of Company common stock upon the exercise of stock options. The following table summarizes option activity: | ||||||||||||||||||||
Weighted | Weighted Average | ||||||||||||||||||||
Average | Remaining | ||||||||||||||||||||
Exercise Price | Contractual Term | Aggregate Intrinsic | |||||||||||||||||||
Shares | Per Share | (Years) | Value(1) | ||||||||||||||||||
Options outstanding, January 1, 2012 | 3,858,000 | $ | 3.75 | ||||||||||||||||||
Granted at fair market value | 614,000 | 2.61 | |||||||||||||||||||
Granted at above fair market value | 568,000 | 2.45 | |||||||||||||||||||
Exercised | (214,000 | ) | 2.12 | ||||||||||||||||||
Forfeited, cancelled, or expired | (966,000 | ) | 3.63 | ||||||||||||||||||
Options outstanding, December 31, 2012 | 3,860,000 | 3.48 | |||||||||||||||||||
Granted at fair market value | 711,000 | 3.79 | |||||||||||||||||||
Granted at above fair market value | 978,000 | 3.72 | |||||||||||||||||||
Exercised | (343,000 | ) | 2.07 | ||||||||||||||||||
Forfeited, cancelled, or expired | (765,000 | ) | 4.23 | ||||||||||||||||||
Options outstanding, December 31, 2013 | 4,441,000 | 3.51 | |||||||||||||||||||
Granted at fair market value | 240,000 | 2.23 | |||||||||||||||||||
Granted at above fair market value | 369,000 | 3.05 | |||||||||||||||||||
Exercised | (153,000 | ) | 2.03 | ||||||||||||||||||
Forfeited, cancelled, or expired | (1,422,000 | ) | 4.5 | ||||||||||||||||||
Options outstanding, December 31, 2014 | 3,475,000 | 3.03 | 2.97 | $ | 1,076,000 | ||||||||||||||||
Options exercisable, December 31, 2014 | 2,627,000 | 3 | 2.46 | 975,000 | |||||||||||||||||
Vested options expired during the twelve months | 185,000 | 10.04 | — | ||||||||||||||||||
ended December 31, 2014 | |||||||||||||||||||||
-1 | The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of a grant. | ||||||||||||||||||||
Additional Information of Option Activity | The following table summarizes additional information for those options that are outstanding and exercisable as of December 31, 2014: | ||||||||||||||||||||
Options Outstanding | Exercisable | ||||||||||||||||||||
Weighted | |||||||||||||||||||||
Weighted | Average | Weighted | |||||||||||||||||||
Number | Average | Remaining | Number | Average | |||||||||||||||||
Range of Exercise Prices | of Shares | Exercise Price | Life (Years) | of Shares | Exercise Price | ||||||||||||||||
$ 0.82 — $ 1.99 | 331,000 | $ | 1.41 | 3.76 | 321,000 | $ | 1.4 | ||||||||||||||
$ 2.00 — $ 2.99 | 1,978,000 | 2.32 | 2.77 | 1,488,000 | 2.26 | ||||||||||||||||
$ 3.00 — $ 3.99 | 212,000 | 3.15 | 3.69 | 46,000 | 3.29 | ||||||||||||||||
$ 4.00 — $ 4.99 | 416,000 | 4.21 | 3.56 | 356,000 | 4.16 | ||||||||||||||||
$ 5.00 — $ 5.99 | 412,000 | 5.11 | 2.76 | 290,000 | 5.15 | ||||||||||||||||
$ 6.00 — $ 6.99 | 53,000 | 6.47 | 1.36 | 53,000 | 6.47 | ||||||||||||||||
$ 7.00 — $ 7.99 | 20,000 | 7.26 | 1.4 | 20,000 | 7.26 | ||||||||||||||||
$ 8.00 — $ 8.75 | 53,000 | 8.45 | 1.97 | 53,000 | 8.45 | ||||||||||||||||
Total | 3,475,000 | 3.03 | 2.97 | 2,627,000 | 3 | ||||||||||||||||
Cash Proceeds, Along With Fair Value Disclosures Related to Grants, Exercises, and Vesting Options | Cash proceeds, along with fair value disclosures related to grants, exercises, and vesting options, are as follows for the years ended December 31 (in thousands, except per share amounts): | ||||||||||||||||||||
Years Ended | |||||||||||||||||||||
December 31, | |||||||||||||||||||||
2014 | 2013 | 2012 | |||||||||||||||||||
Proceeds from stock options exercised | $ | 310 | $ | 707 | $ | 455 | |||||||||||||||
Tax benefit related to stock options exercised(1) | N/A | N/A | N/A | ||||||||||||||||||
Intrinsic value of stock options exercised(2) | $ | 108 | $ | 860 | $ | 91 | |||||||||||||||
Weighted-average fair value of options granted | $ | 1.61 | $ | 1.82 | $ | 1.39 | |||||||||||||||
Total fair value of shares vested during the year | $ | 1,208 | $ | 1,544 | $ | 1,737 | |||||||||||||||
-1 | Excess tax benefits received related to stock option exercises are presented as financing cash inflows. For the periods presented, the Company did not receive a tax benefit related to the exercise of stock options due to its net operating losses. | ||||||||||||||||||||
-2 | The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the market price of the stock on the date of grant. |
Segment_Information_Tables
Segment Information (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Summary of Net Revenue by Geographic Location | Net revenue by geographic location based on the location of customers was as follows (in thousands): | ||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
United States | $ | 29,848 | $ | 35,653 | $ | 40,524 | |||||||
International | 17,808 | 20,777 | 16,832 | ||||||||||
$ | 47,656 | $ | 56,430 | $ | 57,356 | ||||||||
Concentrations_Tables
Concentrations (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Risks And Uncertainties [Abstract] | ||||||||||||||
Summary of Net Revenue from Various Products | Revenue from the Company’s products for the years ended December 31, 2014, 2013 and 2012 are as follows: | |||||||||||||
Years Ended December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Laser systems | 61.9 | % | 68.6 | % | 73.8 | % | ||||||||
Imaging systems | 9 | % | 8.2 | % | 5.9 | % | ||||||||
Consumables and other | 13.7 | % | 11.5 | % | 10.4 | % | ||||||||
Services | 15.1 | % | 11.3 | % | 9.6 | % | ||||||||
License fees and royalties | 0.3 | % | 0.4 | % | 0.3 | % | ||||||||
Total revenue | 100 | % | 100 | % | 100 | % | ||||||||
Basis_of_Presentation_Addition
Basis of Presentation - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | ||||||
Nov. 07, 2014 | Jul. 28, 2014 | Jul. 22, 2014 | Feb. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | |
Basis Of Presentation [Line Items] | ||||||||
Proceeds from equity offering, net of expenses | $34,800,000 | $11,500,000 | $4,800,000 | $51,118,000 | $5,201,000 | |||
Working capital | 38,600,000 | |||||||
Cash and cash equivalents | 31,560,000 | 1,440,000 | 2,543,000 | 3,307,000 | ||||
Net accounts receivable | 9,004,000 | 11,127,000 | ||||||
Payments under revolving lines of credit | 2,900,000 | 21,508,000 | 32,104,000 | 14,963,000 | ||||
Proceeds from equity offering, gross | 35,000,000 | 12,000,000 | 5,000,000 | |||||
Issuance of stock, net, shares | 14,162,873 | 6,250,000 | 1,945,525 | |||||
Common stock issued, price per share | $2.39 | $1.92 | $2.57 | |||||
Warrants to purchase common stock | 9,205,862 | |||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4 | |||||||
Term of agreement | 3 years | |||||||
Payments of stock issuance costs | $235,000 | $462,000 | $188,000 | |||||
Sales Revenue, Net | Credit concentration - largest distributor | ||||||||
Basis Of Presentation [Line Items] | ||||||||
Concentration Risk Percentage | 6.00% | 5.00% | 3.00% |
Estimated_Useful_Lives_of_Prop
Estimated Useful Lives of Property, Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2014 | |
Building | |
Property Plant And Equipment Disclosure [Line Items] | |
Property, plant, and equipment, useful lives | 30 years |
Leasehold Improvements | Minimum | |
Property Plant And Equipment Disclosure [Line Items] | |
Property, plant, and equipment, useful lives | 3 years |
Leasehold Improvements | Maximum | |
Property Plant And Equipment Disclosure [Line Items] | |
Property, plant, and equipment, useful lives | 5 years |
Equipment and Computers | Minimum | |
Property Plant And Equipment Disclosure [Line Items] | |
Property, plant, and equipment, useful lives | 3 years |
Equipment and Computers | Maximum | |
Property Plant And Equipment Disclosure [Line Items] | |
Property, plant, and equipment, useful lives | 5 years |
Furniture and Fixtures | |
Property Plant And Equipment Disclosure [Line Items] | |
Property, plant, and equipment, useful lives | 5 years |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Segment | |||
Accounting Policies [Line Items] | |||
Depreciation expense | $627,000 | $484,000 | $377,000 |
Number of operating segments | 1 | ||
Undelivered elements (training, installation, product and support services) | 952,000 | 1,823,000 | |
Provision for sales returns | 110,000 | 110,000 | |
Extended warranty contracts | 1,500,000 | 1,642,000 | |
Revenue recognition, percentage of fair value of trade-in exchange | 25.00% | ||
Advertising costs | 543,000 | 1,500,000 | 907,000 |
Compensation cost related to stock options | 1,233,000 | 1,609,000 | 1,600,000 |
Net impact of share based compensation expense to earnings per diluted share | ($0.03) | ($0.05) | ($0.05) |
Total unrecognized compensation cost | $1,400,000 | $2,700,000 | |
Unrecognized share based compensation cost to be recognized over weighted-average period | 10 months 24 days | ||
Outstanding stock options and warrants excluded from diluted loss per share | 10,094,000 | 6,039,000 | 4,713,000 |
UNITED STATES | WaterLase systems | |||
Accounting Policies [Line Items] | |||
Product warrant period | 2 years | 1 year | 1 year |
UNITED STATES | Diode systems | |||
Accounting Policies [Line Items] | |||
Product warrant period | 2 years | 2 years | 2 years |
International | WaterLase systems | |||
Accounting Policies [Line Items] | |||
Product warrant period | 28 months | 16 months | 16 months |
International | Diode systems | |||
Accounting Policies [Line Items] | |||
Product warrant period | 28 months | 28 months | 28 months |
Changes_in_Initial_Product_War
Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Movement in Standard Product Warranty Accrual | |||
Initial warranty accrual, beginning balance | $1,096 | $1,699 | $2,218 |
Provision for estimated warranty cost | 1,214 | 475 | 1,705 |
Warranty expenditures | -861 | -1,078 | -2,224 |
Initial warranty accrual, ending balance | 1,449 | 1,096 | 1,699 |
Less warranty accrual, long term | 519 | 0 | 0 |
Total warranty accrual, current portion | $930 | $1,096 | $1,699 |
Classification_of_Compensation
Classification of Compensation Expense Associated with Share-Based Payments (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $1,233,000 | $1,609,000 | $1,600,000 |
Cost Of Revenue | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | 134,000 | 288,000 | 245,000 |
Sales and Marketing | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | 401,000 | 585,000 | 514,000 |
General and Administrative Expense | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | 616,000 | 594,000 | 668,000 |
Engineering And Development | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Allocated Share-based Compensation Expense | $82,000 | $142,000 | $173,000 |
Assumptions_Used_in_Estimating
Assumptions Used in Estimating Fair Value of Stock Options Granted (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | |||
Expected term (years) | 3 years 9 months 29 days | 3 years 7 months 24 days | 3 years 8 months 12 days |
Volatility | 94.00% | 84.00% | 97.00% |
Risk-free interest rate | 1.66% | 1.04% | 0.77% |
Components_of_Accounts_Receiva
Components of Accounts Receivable, Net of Allowance (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Components of accounts receivable, net of allowances | ||
Trade | $8,887 | $10,960 |
Royalties | 88 | 82 |
Other | 29 | 85 |
Total receivables, net | $9,004 | $11,127 |
Supplementary_Balance_Sheet_In2
Supplementary Balance Sheet Information - Additional Information (Detail) (USD $) | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | |
Accounts Receivable [Abstract] | |||
Allowances for doubtful accounts | $1,700,000 | $573,000 | |
Provision for sales returns | 110,000 | 110,000 | |
Provision for excess inventory and obsolete inventory | 2,400,000 | 2,800,000 | |
Deferred revenue recognized | $708,000 |
Components_of_Inventory_Detail
Components of Inventory (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Components of inventory, net of allowances | ||
Raw materials | $2,857 | $3,094 |
Work-in-process | 1,348 | 1,727 |
Finished goods | 8,303 | 6,557 |
Inventory, net | $12,508 | $11,378 |
Summary_of_Property_Plant_and_
Summary of Property, Plant, and Equipment (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Components of property, plant, and equipment, net of depreciation | ||
Property, plant, and equipment gross, excluding land | $6,788 | $8,598 |
Accumulated depreciation and amortization | -5,669 | -6,971 |
Property, plant, and equipment net, excluding land | 1,119 | 1,627 |
Land | 176 | 199 |
Property, plant, and equipment, net | 1,295 | 1,826 |
Building | ||
Components of property, plant, and equipment, net of depreciation | ||
Property, plant and equipment, gross | 226 | 256 |
Leasehold Improvements | ||
Components of property, plant, and equipment, net of depreciation | ||
Property, plant and equipment, gross | 1,197 | 1,207 |
Equipment And Computers | ||
Components of property, plant, and equipment, net of depreciation | ||
Property, plant and equipment, gross | 4,948 | 6,078 |
Furniture and Fixtures | ||
Components of property, plant, and equipment, net of depreciation | ||
Property, plant and equipment, gross | 413 | 1,049 |
Construction in Progress | ||
Components of property, plant, and equipment, net of depreciation | ||
Property, plant and equipment, gross | $4 | $8 |
Components_of_Accrued_Liabilit
Components of Accrued Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
In Thousands, unless otherwise specified | |||
Components of accrued liabilities | |||
Payroll and benefits | $1,905 | $1,898 | |
Total warranty accrual, current portion | 930 | 1,096 | 1,699 |
Taxes | 139 | 338 | |
Accrued professional services | 1,581 | 911 | |
Accrued insurance premium | 450 | 428 | |
Other | 183 | 326 | |
Accrued liabilities | $5,188 | $4,997 |
Summary_of_Deferred_Revenue_De
Summary of Deferred Revenue (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
Components of deferred revenue | ||
Undelivered elements (training, installation, product and support services) | $952,000 | $1,823,000 |
Extended warranty contracts | 1,542,000 | 1,642,000 |
Total Deferred Revenue | 2,494,000 | 3,465,000 |
Less Long-Term amounts: | ||
Extended warranty contracts | 1,000 | |
Total Deferred Revenue - Long Term | 1,000 | |
Total Deferred Revenue - Current | $2,494,000 | $3,464,000 |
Intangible_Assets_and_Goodwill2
Intangible Assets and Goodwill - Additional Information (Detail) (USD $) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Intangible Assets And Goodwill [Line Items] | ||||
Goodwill, Impairment | $0 | |||
Amortization expense | 69,000 | 117,000 | 136,000 | |
Estimated intangible asset amortization expense 2015 | 62,000 | |||
Estimated intangible asset amortization expense 2016 | 52,000 | |||
Non cash investment | 200,000 | |||
Former Distributor In India | ||||
Intangible Assets And Goodwill [Line Items] | ||||
Amortization expense | 57,000 | 55,000 | ||
Acquired intangible assets | 224,000 | |||
Amortization of Intangible Assets (non-compete agreement and customer and luminary lists, etc.) | 4 years | |||
Non cash investment | $200,000 |
Intangible_Assets_and_Related_
Intangible Assets and Related Accumulated Amortization (Detail) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Intangible Assets And Goodwill [Line Items] | ||
Intangible assets, gross | $2,800 | $2,800 |
Intangible assets, accumulated amortization | -2,686 | -2,617 |
Intangible assets, net | 114 | 183 |
Useful life | Indefinite life | |
Goodwill gross | 2,926 | 2,926 |
Goodwill | 2,926 | 2,926 |
Patents | ||
Intangible Assets And Goodwill [Line Items] | ||
Intangible assets, gross | 1,914 | 1,914 |
Intangible assets, accumulated amortization | -1,907 | -1,895 |
Intangible assets, net | 7 | 19 |
Patents | Minimum | ||
Intangible Assets And Goodwill [Line Items] | ||
Useful life | 4 years | |
Patents | Maximum | ||
Intangible Assets And Goodwill [Line Items] | ||
Useful life | 10 years | |
Trademarks | ||
Intangible Assets And Goodwill [Line Items] | ||
Useful life | 6 years | |
Intangible assets, gross | 69 | 69 |
Intangible assets, accumulated amortization | -69 | -69 |
Other Intangible Assets | ||
Intangible Assets And Goodwill [Line Items] | ||
Intangible assets, gross | 817 | 817 |
Intangible assets, accumulated amortization | -710 | -653 |
Intangible assets, net | $107 | $164 |
Other Intangible Assets | Minimum | ||
Intangible Assets And Goodwill [Line Items] | ||
Useful life | 4 years | |
Other Intangible Assets | Maximum | ||
Intangible Assets And Goodwill [Line Items] | ||
Useful life | 6 years |
Lines_of_Credit_and_Other_Borr1
Lines of Credit and Other Borrowings - Additional Information (Detail) (USD $) | 0 Months Ended | 12 Months Ended | 3 Months Ended | |||||||||||||
Nov. 07, 2014 | Jul. 28, 2014 | Jul. 22, 2014 | Jun. 03, 2014 | 31-May-14 | 5-May-14 | Apr. 10, 2014 | Mar. 04, 2014 | Feb. 10, 2014 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | 24-May-12 | Nov. 08, 2013 | Sep. 06, 2013 | |
Agreement | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Number revolving credit facility agreements | 2 | |||||||||||||||
Payments under credit agreements | $2,900,000 | $21,508,000 | $32,104,000 | $14,963,000 | ||||||||||||
Credit agreements amendment fee | 10,000 | 10,000 | ||||||||||||||
Lines of credit maximum borrowing capacity | 4,000,000 | 5,000,000 | 8,000,000 | |||||||||||||
Line of credit facility, expiration date | 1-Aug-14 | 1-Aug-14 | 1-Jun-14 | 1-May-14 | ||||||||||||
Revolving lines of credit fee paid | 15,000 | 10,000 | 10,000 | |||||||||||||
Increase decrease in interest rate of lines of credit facility | 0.50% | |||||||||||||||
Outstanding borrowings under lines of credit | 4,600,000 | |||||||||||||||
Prime Floor, daily prime plus LIBOR | 2.50% | 2.50% | ||||||||||||||
Unused capacity commitment fee percentage | 0.25% | 0.25% | ||||||||||||||
Interest expense incurred for lines of credit and loan and security agreement | 457,000 | 599,000 | ||||||||||||||
Amortization of deferred debt issuance costs | 128,000 | 197,000 | 91,000 | |||||||||||||
Amortization of discount on lines of credit | 200,000 | 179,000 | 43,000 | |||||||||||||
Accrued Interest Payable | 0 | 20,000 | ||||||||||||||
Restricted cash amounts | 0 | 0 | ||||||||||||||
Additional commitment fees and legal costs incurred | 55,000 | 67,000 | ||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4 | |||||||||||||||
Issuance of stock, net, shares | 14,162,873 | 6,250,000 | 1,945,525 | |||||||||||||
Financed insurance premium | 0 | 197,000 | ||||||||||||||
Number of monthly insurance premium installments payable in 2013 | Nine | |||||||||||||||
Interest Expense incurred for financed insurance premiums | 3,000 | 5,000 | 5,000 | |||||||||||||
Financial insurance premiums interest rate | 2.90% | |||||||||||||||
Domestic Revolver Credit Facility | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Lines of credit maximum borrowing capacity | 4,000,000 | |||||||||||||||
Outstanding borrowings under lines of credit | 1,800,000 | |||||||||||||||
Domestic Revolver Credit Facility | Prime Rate | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Interest on principal balance rate plus | 2.50% | 2.00% | ||||||||||||||
Ex-Im Revolver | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Lines of credit maximum borrowing capacity | 4,000,000 | |||||||||||||||
Outstanding borrowings under lines of credit | 2,800,000 | |||||||||||||||
Ex-Im Revolver | Prime Rate | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Interest on principal balance rate plus | 2.00% | 1.50% | ||||||||||||||
November 2013 Comerica Warrant | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Warrants issued to purchase common stock | 100,000 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2 | |||||||||||||||
Expiration date of warrant shares if unexercised | 8-Nov-18 | |||||||||||||||
Fair value warrants expected term | 5 years | |||||||||||||||
Fair value warrants volatility rate | 102.65% | |||||||||||||||
Fair value warrants dividend per share | $0 | |||||||||||||||
Fair value warrants risk free interest rate | 1.42% | |||||||||||||||
Fair value of warrants | 137,000 | |||||||||||||||
Number of Comerica Bank warrants exercised | 100,000 | |||||||||||||||
Issuance of stock, net, shares | 19,354 | |||||||||||||||
September 2013 Comerica Warrant | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Warrants issued to purchase common stock | 100,000 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2 | |||||||||||||||
Fair value warrants expected term | 5 years | |||||||||||||||
Fair value warrants volatility rate | 105.32% | |||||||||||||||
Fair value warrants dividend per share | $0 | |||||||||||||||
Fair value warrants risk free interest rate | 1.77% | |||||||||||||||
Fair value of warrants | 143,000 | |||||||||||||||
Number of Comerica Bank warrants exercised | 100,000 | |||||||||||||||
Issuance of stock, net, shares | 19,354 | |||||||||||||||
2012 Comerica Warrant | ||||||||||||||||
Line Of Credit Facility [Line Items] | ||||||||||||||||
Warrants issued to purchase common stock | 80,000 | |||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2.83 | |||||||||||||||
Expiration date of warrant shares if unexercised | 24-May-17 | |||||||||||||||
Fair value of warrants | $142,000 | |||||||||||||||
Number of Comerica Bank warrants exercised | 80,000 | |||||||||||||||
Reduced exercise price of warrants | $2 | |||||||||||||||
Net issuance of common stock due to exercise of warrants | 40,465 |
Summary_of_Income_Tax_Current_
Summary of Income Tax Current and Deferred Provision (Benefit) (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Current: | |||
Federal | ($138) | ||
State | 27 | 31 | 18 |
Foreign | 25 | -27 | 32 |
Total current income tax provision (benefit) | 52 | -134 | 50 |
Deferred: | |||
Federal | 60 | 72 | 57 |
State | -118 | 12 | |
Foreign | 16 | -8 | |
Total deferred income tax provision (benefit) | 60 | -30 | 61 |
Total income tax provision (benefit) | $112 | ($164) | $111 |
Income_Taxes_Additional_Inform
Income Taxes - Additional Information (Detail) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Income Tax Disclosure [Line Items] | ||
Reversal of deferred tax liabilities associated with unrecognized tax benefits related to international operations | $138,000 | |
Tax benefit for federal alternative minimum tax credits and California R&D credits | 107,000 | |
Tax benefit on reversed deferred tax liabilities and recognized AMT and R&D credits | 245,000 | |
Valuation allowance | 42,069,000 | 35,566,000 |
Net operating loss carryforwards federal | 93,200,000 | |
Net operating loss carryforwards state | 63,900,000 | |
Cumulative unrealized excess tax deductions | 6,900,000 | 7,000,000 |
Unrealized tax benefits, if realized, would increase in additional paid-in-capital | 2,600,000 | 2,700,000 |
Valuation allowance percentage against the state deferred tax asset | 100.00% | |
Undistributed earnings from foreign subsidiaries | 0 | |
Minimum | ||
Income Tax Disclosure [Line Items] | ||
Operating loss carryforwards, expiration period | 2018 | |
Maximum | ||
Income Tax Disclosure [Line Items] | ||
Operating loss carryforwards, expiration period | 2034 | |
Federal | ||
Income Tax Disclosure [Line Items] | ||
Research and development tax credit carryforwards | 1,400,000 | |
Federal | Minimum | ||
Income Tax Disclosure [Line Items] | ||
Research and development tax credit carryforwards, expiration period | 2018 | |
Federal | Maximum | ||
Income Tax Disclosure [Line Items] | ||
Research and development tax credit carryforwards, expiration period | 2034 | |
State | Indefinite Life | ||
Income Tax Disclosure [Line Items] | ||
Research and development tax credit carryforwards | $1,100,000 |
Federal_Income_Tax_Provision_C
Federal Income Tax Provision Compared With Statutory Rates (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Income Tax Disclosure [Abstract] | |||
Statutory regular federal income tax rate | -34.00% | -34.00% | -34.00% |
Change in valuation allowance | 37.40% | 27.00% | -13.00% |
Tax return to prior year provision adjustments | -0.90% | 16.20% | |
Expiration of federal net operating losses | 28.20% | ||
Reduction of net operating loss attributes | -3.10% | -3.70% | |
State tax benefit (net of federal benefit) | -3.30% | -4.20% | 4.10% |
Research credits | -1.90% | -2.10% | |
Foreign amounts with no tax benefit | -0.10% | -0.20% | -0.60% |
Non-deductible expenses | 1.00% | 1.60% | 6.10% |
Effect of change in rate | 2.30% | 14.20% | |
Other | -0.80% | 0.30% | 0.50% |
Total | 0.60% | -1.40% | 3.80% |
Summary_of_Net_Deferred_Tax_As
Summary of Net Deferred Tax Assets and Net Deferred Tax Liabilities (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Capitalized intangible assets for tax purposes | $202 | $283 |
Reserves not currently deductible | 1,871 | 1,702 |
Deferred revenue | 8 | 8 |
Stock options | 2,911 | 2,565 |
State taxes | 8 | 7 |
Income tax credits | 2,200 | 1,583 |
Inventory | 1,225 | 871 |
Property and equipment | 280 | 376 |
Other comprehensive income | 222 | 109 |
Unrealized gain on foreign currency | 136 | 142 |
Net operating losses | 33,140 | 28,058 |
Total deferred tax assets | 42,203 | 35,704 |
Valuation allowance | -42,069 | -35,566 |
Net deferred tax assets | 134 | 138 |
Capitalized intangible assets | -752 | -696 |
Other | -59 | -59 |
Total deferred tax liabilities | -811 | -755 |
Net deferred tax liabilities | ($677) | ($617) |
Summary_of_Unrecognized_Tax_Be
Summary of Unrecognized Tax Benefits (Detail) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Income Tax Disclosure [Abstract] | ||
Beginning balance | $568 | $568 |
Ending balance | $568 | $568 |
Commitments_and_Contingencies_1
Commitments and Contingencies - Additional Information (Detail) | 0 Months Ended | 1 Months Ended | 12 Months Ended | ||||||
Sep. 24, 2009 | Jan. 31, 2006 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2014 | Dec. 31, 2013 | Apr. 29, 2014 | Sep. 30, 2014 | |
USD ($) | USD ($) | USD ($) | USD ($) | Employee Arrangements and Other Compensation | Employee Arrangements and Other Compensation | Bond | Statutory Bond | ||
sqft | USD ($) | USD ($) | EUR (€) | EUR (€) | |||||
Commitment And Contingencies [Line Items] | |||||||||
Lease period | 5 years | ||||||||
Area of corporate headquarters and manufacturing facility | 57,000 | ||||||||
Initial monthly installments | $38,692 | ||||||||
Extended lease term | 20-Apr-15 | ||||||||
Rent expense | 1,000,000 | 1,100,000 | 789,000 | ||||||
Change in control, if occurs, may require severance benefits payable | 503,000 | 717,000 | |||||||
Accrued for performance bonuses | 125,000 | 0 | |||||||
Purchase commitments pending | 14,100,000 | ||||||||
Legal costs paid in connection with class action lawsuits | 0 | 250,000 | |||||||
Amount of injunction bond to be posted | € 500,000 | € 146,000 |
Future_Minimum_Rental_Commitme
Future Minimum Rental Commitments Under Operating Lease Agreements (Detail) (USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Commitments And Contingencies Disclosure [Abstract] | |
2015 | $597 |
2016 | 306 |
2017 | 131 |
Total future minimum lease obligations | $1,034 |
Stockholders_Equity_Additional
Stockholders' Equity - Additional Information (Detail) (USD $) | 0 Months Ended | 1 Months Ended | 3 Months Ended | 12 Months Ended | 0 Months Ended | 1 Months Ended | 0 Months Ended | |||||||||||||||||||||
Nov. 07, 2014 | Jul. 22, 2014 | Feb. 10, 2014 | Feb. 28, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Jun. 06, 2013 | Jul. 13, 2014 | Jan. 02, 2015 | Aug. 27, 2014 | Apr. 26, 2013 | Nov. 08, 2012 | Sep. 30, 2010 | Dec. 19, 2013 | Sep. 23, 2013 | Jul. 12, 2013 | Jul. 18, 2014 | Jul. 26, 2013 | Mar. 23, 2013 | Dec. 31, 2011 | Aug. 10, 2011 | 7-May-12 | Apr. 18, 2013 | |
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Preferred stock, shares authorized | 1,000,000 | 1,000,000 | 1,000,000 | |||||||||||||||||||||||||
Preferred stock, shares outstanding | 0 | 0 | 0 | |||||||||||||||||||||||||
Common stock, shares issued | 37,336,000 | 58,115,000 | 37,336,000 | |||||||||||||||||||||||||
Common stock, shares outstanding | 35,372,000 | 58,115,000 | 35,372,000 | |||||||||||||||||||||||||
Common stock, shares authorized | 50,000,000 | 100,000,000 | 50,000,000 | |||||||||||||||||||||||||
Treasury Stock Shares | 1,964,000 | 1,964,000 | 1,964,000 | 1,963,500 | 1,964,000 | |||||||||||||||||||||||
Issuance of stock, net, shares | 14,162,873 | 6,250,000 | 1,945,525 | |||||||||||||||||||||||||
Common stock issued, price per share | $2.39 | $1.92 | $2.57 | |||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4 | |||||||||||||||||||||||||||
Proceeds from equity offering, gross | $35,000,000 | $12,000,000 | $5,000,000 | |||||||||||||||||||||||||
Payments of stock issuance costs | 235,000 | 462,000 | 188,000 | |||||||||||||||||||||||||
Proceeds from equity offering, net of expenses | 34,800,000 | 11,500,000 | 4,800,000 | 51,118,000 | 5,201,000 | |||||||||||||||||||||||
Maximum stock offering price | 5,000,000 | |||||||||||||||||||||||||||
Dividends Payable, Date Declared | 31-Dec-13 | 30-Sep-13 | 30-Jun-13 | 31-Mar-13 | ||||||||||||||||||||||||
Dividends Payable, Date of Record | 14-Mar-14 | 16-Dec-13 | 30-Aug-13 | 14-Jun-13 | 15-Mar-13 | |||||||||||||||||||||||
Stock dividend policy adopted | 2.00% | |||||||||||||||||||||||||||
Annual Stock Dividend Payable Rate | 0.50% | |||||||||||||||||||||||||||
Annual Stock Dividend Payable, Value | 0 | |||||||||||||||||||||||||||
Number of shares authorized to repurchase | 2,000,000 | |||||||||||||||||||||||||||
Average price paid per share | $1.73 | |||||||||||||||||||||||||||
Stock-based compensation | 1,233,000 | 1,609,000 | 1,600,000 | |||||||||||||||||||||||||
Minimum required closing price of common stock on the NASDAQ in order to exercise | $6 | |||||||||||||||||||||||||||
Allocated Share-based Compensation Expense | 1,233,000 | 1,609,000 | 1,600,000 | |||||||||||||||||||||||||
Options outstanding | 4,441,000 | 3,475,000 | 4,441,000 | 3,860,000 | 3,858,000 | |||||||||||||||||||||||
Stock option and Restricted stock units vesting description | One-sixth of the stock options and one-sixth of the RSUs vested immediately, with the remaining five-sixths vesting ratably on a monthly basis over the twelve-month period ending on July 13, 2015. | |||||||||||||||||||||||||||
Expected term (years) | 3 years 9 months 29 days | 3 years 7 months 24 days | 3 years 8 months 12 days | |||||||||||||||||||||||||
Volatility | 94.00% | 84.00% | 97.00% | |||||||||||||||||||||||||
Risk-free interest rate | 1.66% | 1.04% | 0.77% | |||||||||||||||||||||||||
Coo | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Stock options granted to COO | 350,000 | |||||||||||||||||||||||||||
Exercise Price of Stock Options | $4 | |||||||||||||||||||||||||||
Stock options vesting beginning date | 6-Jun-14 | |||||||||||||||||||||||||||
Unvested stock options forfeited | 306,250 | |||||||||||||||||||||||||||
Stock options expiration date | 28-Feb-16 | |||||||||||||||||||||||||||
Consultants | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | ||||||||||||||||||||||||||
Exercise Price of Stock Options | $2.55 | |||||||||||||||||||||||||||
Stock options granted - Consultant | 65,000 | |||||||||||||||||||||||||||
Stock options expiration period | 5 years | |||||||||||||||||||||||||||
Cancellation of stock options | 31-Dec-14 | |||||||||||||||||||||||||||
2002 Stock Incentive Plan | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Plan expiration date | 5-May-19 | |||||||||||||||||||||||||||
Common stock authorized for issuance under the 2002 Plan | 9,250,000 | |||||||||||||||||||||||||||
Common stock issued pursuant to options exercised | 2,993,000 | |||||||||||||||||||||||||||
Options outstanding | 3,475,000 | |||||||||||||||||||||||||||
Options available for future grant | 2,782,000 | |||||||||||||||||||||||||||
Non-qualified Stock Options | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Options available for future grant | 172,282 | |||||||||||||||||||||||||||
Exercise Price of Stock Options | $1.98 | |||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | |||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Fair Value Assumptions, Exercise Price | $1.31 | |||||||||||||||||||||||||||
Expected term (years) | 3 years 7 months 6 days | |||||||||||||||||||||||||||
Volatility | 98.37% | |||||||||||||||||||||||||||
Risk-free interest rate | 1.65% | |||||||||||||||||||||||||||
Non-qualified Stock Options | Share-based Compensation Award, Tranche One | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 16.67% | |||||||||||||||||||||||||||
Non-qualified Stock Options | Share-based Compensation Award, Tranche Two | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 83.33% | |||||||||||||||||||||||||||
Non-qualified Stock Options | Subsequent Event | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Exercise Price of Stock Options | 2.64 | |||||||||||||||||||||||||||
Non-qualified Stock Options | Officers | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Options vesting description | (i) as to 50% of the options, one-fourth on the one-year anniversary of the grant date and the remaining three-fourths, ratably over the next thirty-six month period, commencing on the thirteenth month from grant date, and (ii) as to 50% of the options, upon achievement of specific annual Company performance criteria. | |||||||||||||||||||||||||||
Non-qualified Stock Options | Officers | Subsequent Event | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Stock options granted | 1,365,702 | |||||||||||||||||||||||||||
Options expiration period | 10 years | |||||||||||||||||||||||||||
Non-qualified Stock Options | Consultants | Subsequent Event | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Stock options granted | 86,000 | |||||||||||||||||||||||||||
Options expiration period | 5 years | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Options available for future grant | 37,879 | |||||||||||||||||||||||||||
Exercise Price of Stock Options | $1.98 | |||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | Share-based Compensation Award, Tranche One | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 16.67% | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | Share-based Compensation Award, Tranche Two | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 83.33% | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | One Independent Directors | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period | 9,217 | |||||||||||||||||||||||||||
Restricted Stock Units (RSUs) | Four Independent Director | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 12 months | |||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period | 36,868 | |||||||||||||||||||||||||||
Share-based compensation arrangement by share-based payment award, equity instruments other than options, value per share | 2.17 | |||||||||||||||||||||||||||
Sun Dental Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $5.90 | |||||||||||||||||||||||||||
Stock-based compensation | 0 | |||||||||||||||||||||||||||
Plan expiration date | 24-Apr-14 | |||||||||||||||||||||||||||
Sun Dental Warrant vesting rate per assisted sale | 1,000 | |||||||||||||||||||||||||||
2013 IR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $5.10 | |||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | ||||||||||||||||||||||||||
Minimum required closing price of common stock on the NASDAQ in order to exercise | $7.50 | |||||||||||||||||||||||||||
CMR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Stock-based compensation | 0 | 0 | ||||||||||||||||||||||||||
2012 IR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $2.50 | |||||||||||||||||||||||||||
Minimum required closing price of common stock on the NASDAQ in order to exercise | $7 | |||||||||||||||||||||||||||
Number of warrant vesting upon early termination | 25,000 | |||||||||||||||||||||||||||
Allocated Share-based Compensation Expense | 64,000 | |||||||||||||||||||||||||||
Stock based compensation, shares issued | 9,296 | |||||||||||||||||||||||||||
2010 IR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Recognized expense related to the IR Warrants | 23,000 | |||||||||||||||||||||||||||
2010 IR Warrant | First Tranche | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
IR Warrants to purchase common stock granted | 50,000 | |||||||||||||||||||||||||||
IR warrants issued to purchase common stock | $0.74 | |||||||||||||||||||||||||||
2010 IR Warrant | Mar. 23, 2013 Maximum Second Tranche CMR Warrant Cancelled Dec 2013 | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
IR Warrants to purchase common stock granted | 50,000 | |||||||||||||||||||||||||||
IR warrants issued to purchase common stock | $0.74 | |||||||||||||||||||||||||||
Stock repurchase program | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Total number of shares purchased | 133,365 | |||||||||||||||||||||||||||
Oracle Group | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Issuance of stock, net, shares | 340,000 | |||||||||||||||||||||||||||
Common stock issued, price per share | $1.80 | |||||||||||||||||||||||||||
Proceeds from equity offering, gross | 612,000 | |||||||||||||||||||||||||||
Proceeds from equity offering, net of expenses | 582,000 | |||||||||||||||||||||||||||
Cost associated with transaction | 30,000 | |||||||||||||||||||||||||||
Northland Securities Inc | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Issuance of stock, net, shares | 2,688,172 | |||||||||||||||||||||||||||
Common stock issued, price per share | 1.86 | |||||||||||||||||||||||||||
Proceeds from equity offering, gross | 5,000,000 | |||||||||||||||||||||||||||
Proceeds from equity offering, net of expenses | 4,600,000 | |||||||||||||||||||||||||||
Cost associated with transaction | 408,000 | |||||||||||||||||||||||||||
Valam First Tranche | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 165,000 | |||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4 | |||||||||||||||||||||||||||
Vesting of Valam warrant | 30,000 | |||||||||||||||||||||||||||
Warrants and rights outstanding | 30,000 | 30,000 | 30,000 | |||||||||||||||||||||||||
Stock-based compensation | 41,000 | 41,000 | ||||||||||||||||||||||||||
Valam | Original Agreed Price | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $6 | |||||||||||||||||||||||||||
Plan expiration date | 14-Jul-20 | |||||||||||||||||||||||||||
Fda Clearance | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Vesting of Valam warrant | 55,000 | |||||||||||||||||||||||||||
Second Ent Laser | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Vesting of Valam warrant | 40,000 | |||||||||||||||||||||||||||
ENT laser revenues required during a 12-month period | 5,000,000 | |||||||||||||||||||||||||||
Third Ent Laser | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Vesting of Valam warrant | 40,000 | |||||||||||||||||||||||||||
ENT laser revenues required during a 12-month period | 10,000,000 | |||||||||||||||||||||||||||
2014 Common Stock Issuances | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Issuance of stock, net, shares | 14,162,873 | 6,250,000 | ||||||||||||||||||||||||||
Common stock issued, price per share | $2.39 | $1.92 | ||||||||||||||||||||||||||
Warrants issued to purchase common stock | 9,205,862 | |||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4 | |||||||||||||||||||||||||||
Proceeds from equity offering, gross | 35,000,000 | 12,000,000 | ||||||||||||||||||||||||||
Payments of stock issuance costs | 235,000 | 462,000 | ||||||||||||||||||||||||||
Proceeds from equity offering, net of expenses | 34,800,000 | 11,500,000 | ||||||||||||||||||||||||||
Warrants exercisable | 7-May-15 | |||||||||||||||||||||||||||
Warrants issued for term | 3 years | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Retirement of treasury stock | 2,000 | |||||||||||||||||||||||||||
Additional Paid-in Capital | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Retirement of treasury stock | 16,397,000 | |||||||||||||||||||||||||||
Series B Junior Participating Cumulative Preferred Stock | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Preferred stock, shares authorized | 500,000 | |||||||||||||||||||||||||||
Preferred Stock Purchase Rights Under Stockholder Rights Plan | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Preferred stock purchase right expiration date | 31-Dec-18 | |||||||||||||||||||||||||||
Preferred stock purchase right redemption price per share prior to becoming exercisable | 0.001 | |||||||||||||||||||||||||||
Preferred Stock Purchase Rights Under Stockholder Rights Plan | Initial | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Exercise price of right, initially | 30 | |||||||||||||||||||||||||||
February Two Thousand Fourteen Subscription Agreement | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Issuance of stock, net, shares | 1,945,525 | |||||||||||||||||||||||||||
Common stock issued, price per share | $2.57 | |||||||||||||||||||||||||||
Proceeds from equity offering, gross | 5,000,000 | |||||||||||||||||||||||||||
Proceeds from equity offering, net of expenses | 4,800,000 | |||||||||||||||||||||||||||
Cost associated with transaction | 188,000 | |||||||||||||||||||||||||||
Maximum | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Preferred stock, shares authorized | 1,000,000 | |||||||||||||||||||||||||||
Preferred stock, shares outstanding | 0 | |||||||||||||||||||||||||||
Maximum | Sun Dental Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 500,000 | |||||||||||||||||||||||||||
Stock-based compensation | $1,000 | |||||||||||||||||||||||||||
Maximum | 2013 IR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 60,000 | |||||||||||||||||||||||||||
Maximum | CMR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 100,000 | |||||||||||||||||||||||||||
Maximum | CMR Warrant | First Tranche | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 50,000 | |||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4.50 | |||||||||||||||||||||||||||
Maximum | CMR Warrant | Mar. 23, 2013 Maximum Second Tranche CMR Warrant Cancelled Dec 2013 | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Class of Warrant or Right, Exercise Price of Warrants or Rights | $4.50 | |||||||||||||||||||||||||||
Maximum | CMR Warrant Cancelled Dec 2013 | First Tranche | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 50,000 | 50,000 | ||||||||||||||||||||||||||
Maximum | CMR Warrant Cancelled Dec 2013 | Mar. 23, 2013 Maximum Second Tranche CMR Warrant Cancelled Dec 2013 | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 50,000 | |||||||||||||||||||||||||||
Maximum | 2012 IR Warrant | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Warrants issued to purchase common stock | 50,000 | |||||||||||||||||||||||||||
Minimum | Preferred Stock Purchase Rights Under Stockholder Rights Plan | ||||||||||||||||||||||||||||
Stockholders Equity [Line Items] | ||||||||||||||||||||||||||||
Single person ownership percentage that triggers preferred stock rights | 20.00% | |||||||||||||||||||||||||||
Sale of assets or earning power that triggers preferred stock rights | 50.00% |
Summary_of_Option_Activity_Det
Summary of Option Activity (Detail) (USD $) | 12 Months Ended | |||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | ||
Number of Shares | ||||
Beginning Balance | 4,441,000 | 3,860,000 | 3,858,000 | |
Exercised | -153,000 | -343,000 | -214,000 | |
Forfeited, cancelled, or expired | -1,422,000 | -765,000 | -966,000 | |
Ending Balance | 3,475,000 | 4,441,000 | 3,860,000 | |
Options exercisable, December 31, 2014 | 2,627,000 | |||
Vested options expired during the twelve months ended December 31, 2014 | 185,000 | |||
Weighted Average Exercise Price Per Share | ||||
Beginning Balance | $3.51 | $3.48 | $3.75 | |
Exercised | $2.03 | $2.07 | $2.12 | |
Forfeited, cancelled, or expired | $4.50 | $4.23 | $3.63 | |
Ending Balance | $3.03 | $3.51 | $3.48 | |
Options exercisable, December 31, 2014 | $3 | |||
Vested options expired during the twelve months ended December 31, 2014 | $10.04 | |||
Weighted Average Remaining Contractual Term (In Years) | ||||
Options outstanding | 2 years 11 months 19 days | |||
Options exercisable | 2 years 5 months 16 days | |||
Aggregate Intrinsic Value | ||||
Options outstanding | $1,076,000 | [1] | ||
Options exercisable | $975,000 | [1] | ||
Granted at Fair Market Value | ||||
Number of Shares | ||||
Granted | 240,000 | 711,000 | 614,000 | |
Weighted Average Exercise Price Per Share | ||||
Granted | $2.23 | $3.79 | $2.61 | |
Granted at Above Fair Market Value | ||||
Number of Shares | ||||
Granted | 369,000 | 978,000 | 568,000 | |
Weighted Average Exercise Price Per Share | ||||
Granted | $3.05 | $3.72 | $2.45 | |
[1] | The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of a grant. |
Options_Outstanding_and_Exerci
Options Outstanding and Exercisable (Detail) (USD $) | 12 Months Ended |
Dec. 31, 2014 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Options Outstanding Number of Shares | 3,475,000 |
Options Outstanding Weighted Average Exercise Price | $3.03 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 11 months 19 days |
Options Exercisable Number of Shares | 2,627,000 |
Options Exercisable Weighted Average Exercise Price | $3 |
Range One | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $0.82 |
Range of Exercise Prices, Upper Limit | $1.99 |
Options Outstanding Number of Shares | 331,000 |
Options Outstanding Weighted Average Exercise Price | $1.41 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 9 months 4 days |
Options Exercisable Number of Shares | 321,000 |
Options Exercisable Weighted Average Exercise Price | $1.40 |
Range Two | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $2 |
Range of Exercise Prices, Upper Limit | $2.99 |
Options Outstanding Number of Shares | 1,978,000 |
Options Outstanding Weighted Average Exercise Price | $2.32 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 9 months 7 days |
Options Exercisable Number of Shares | 1,488,000 |
Options Exercisable Weighted Average Exercise Price | $2.26 |
Range Three | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $3 |
Range of Exercise Prices, Upper Limit | $3.99 |
Options Outstanding Number of Shares | 212,000 |
Options Outstanding Weighted Average Exercise Price | $3.15 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 8 months 9 days |
Options Exercisable Number of Shares | 46,000 |
Options Exercisable Weighted Average Exercise Price | $3.29 |
Range Four | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $4 |
Range of Exercise Prices, Upper Limit | $4.99 |
Options Outstanding Number of Shares | 416,000 |
Options Outstanding Weighted Average Exercise Price | $4.21 |
Options Outstanding Weighted Average Remaining Life (Years) | 3 years 6 months 22 days |
Options Exercisable Number of Shares | 356,000 |
Options Exercisable Weighted Average Exercise Price | $4.16 |
Range Five | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $5 |
Range of Exercise Prices, Upper Limit | $5.99 |
Options Outstanding Number of Shares | 412,000 |
Options Outstanding Weighted Average Exercise Price | $5.11 |
Options Outstanding Weighted Average Remaining Life (Years) | 2 years 9 months 4 days |
Options Exercisable Number of Shares | 290,000 |
Options Exercisable Weighted Average Exercise Price | $5.15 |
Range Six | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $6 |
Range of Exercise Prices, Upper Limit | $6.99 |
Options Outstanding Number of Shares | 53,000 |
Options Outstanding Weighted Average Exercise Price | $6.47 |
Options Outstanding Weighted Average Remaining Life (Years) | 1 year 4 months 10 days |
Options Exercisable Number of Shares | 53,000 |
Options Exercisable Weighted Average Exercise Price | $6.47 |
Range Seven | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $7 |
Range of Exercise Prices, Upper Limit | $7.99 |
Options Outstanding Number of Shares | 20,000 |
Options Outstanding Weighted Average Exercise Price | $7.26 |
Options Outstanding Weighted Average Remaining Life (Years) | 1 year 4 months 24 days |
Options Exercisable Number of Shares | 20,000 |
Options Exercisable Weighted Average Exercise Price | $7.26 |
Range Eight | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Range of Exercise Prices, Lower Limit | $8 |
Range of Exercise Prices, Upper Limit | $8.75 |
Options Outstanding Number of Shares | 53,000 |
Options Outstanding Weighted Average Exercise Price | $8.45 |
Options Outstanding Weighted Average Remaining Life (Years) | 1 year 11 months 19 days |
Options Exercisable Number of Shares | 53,000 |
Options Exercisable Weighted Average Exercise Price | $8.45 |
Cash_Proceeds_Along_with_Fair_
Cash Proceeds Along with Fair Value Disclosures Related to Grants, Exercises, and Vesting Options (Detail) (USD $) | 12 Months Ended | |||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |||
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||||||
Proceeds from stock options exercised | $310 | $707 | $455 | |||
Intrinsic value of stock options exercised | 108 | [1] | 860 | [1] | 91 | [1] |
Weighted-average fair value of options granted | $1.61 | $1.82 | $1.39 | |||
Total fair value of shares vested during the year | $1,208 | $1,544 | $1,737 | |||
[1] | The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the market price of the stock on the date of grant. |
Segment_Information_Additional
Segment Information - Additional Information (Detail) (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Customer | Customer | Customer | |
International | |||
Segment Reporting Information [Line Items] | |||
Long-lived assets outside of the United States | 374,000 | 430,000 | |
Sales Revenue, Net | International | |||
Segment Reporting Information [Line Items] | |||
Number of customers which represented more than 10% of the Company's revenue | 0 | 0 | 0 |
Customer Concentration Risk | Sales Revenue, Net | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk Percentage | 6.00% | 5.00% | 3.00% |
Customer Concentration Risk | Sales Revenue, Net | UNITED STATES | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk Percentage | 63.00% | 63.00% | 71.00% |
Customer Concentration Risk | Sales Revenue, Net | International | |||
Segment Reporting Information [Line Items] | |||
Concentration Risk Percentage | 37.00% | 37.00% | 29.00% |
Summary_of_Net_Revenue_by_Geog
Summary of Net Revenue by Geographic Location (Detail) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Segment Reporting Information [Line Items] | |||
Net revenue | $47,656 | $56,430 | $57,356 |
UNITED STATES | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 29,848 | 35,653 | 40,524 |
International | |||
Segment Reporting Information [Line Items] | |||
Net revenue | $17,808 | $20,777 | $16,832 |
Concentrations_Summary_of_Net_
Concentrations - Summary of Net Revenue from Various Products (Detail) (Product Concentration Risk, Sales Revenue, Net) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 100.00% | 100.00% | 100.00% |
Laser systems | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 61.90% | 68.60% | 73.80% |
Imaging systems | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 9.00% | 8.20% | 5.90% |
Consumables and other | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 13.70% | 11.50% | 10.40% |
Services | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 15.10% | 11.30% | 9.60% |
License fees and royalties | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 0.30% | 0.40% | 0.30% |
Concentrations_Additional_Info
Concentrations - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | |
Concentration Risk [Line Items] | |||
Maximum account receivable with individual customer | Less than 10% | Less than 10% | |
Number of customers which represented more than 10% of the Company's accounts receivable | 0 | 0 | |
Customer Concentration Risk | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 6.00% | 5.00% | 3.00% |
Subsequent_Events_unaudited_Ad
Subsequent Events (unaudited) - Additional Information (Detail) (Subsequent Event, Non-qualified Stock Options, USD $) | 0 Months Ended |
Jan. 02, 2015 | |
Subsequent Event [Line Items] | |
Granted | $2.64 |
Officers | |
Subsequent Event [Line Items] | |
Stock options granted | 1,365,702 |
Options expiration period | 10 years |
Consultants | |
Subsequent Event [Line Items] | |
Stock options granted | 86,000 |
Options expiration period | 5 years |
Consolidated_Valuation_and_Qua
Consolidated Valuation and Qualifying Accounts and Reserves (Detail) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
Allowance for doubtful accounts | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Year | $573 | $304 | $289 | |
Charges (Reversals) to Cost or Expenses | 1,261 | 291 | 241 | |
Deductions | -123 | -22 | -226 | |
Balance at End of Year | 1,711 | 573 | 304 | |
Allowance for sales returns | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Year | 110 | |||
Balance at End of Year | 110 | 110 | 110 | 110 |
Allowance for tax valuation | ||||
Valuation And Qualifying Accounts Disclosure [Line Items] | ||||
Balance at Beginning of Year | 35,566 | 33,341 | 33,784 | |
Charges (Reversals) to Cost or Expenses | 6,503 | 2,225 | -443 | |
Balance at End of Year | $42,069 | $35,566 | $33,341 |