Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 02, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TRXC | |
Entity Registrant Name | TRANSENTERIX INC. | |
Entity Central Index Key | 876,378 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 216,119,434 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 5,422 | $ 183 | $ 16,578 | $ 3,713 |
Cost of revenue | 4,249 | 921 | 10,536 | 3,227 |
Gross profit (loss) | 1,173 | (738) | 6,042 | 486 |
Operating Expenses (Income) | ||||
Research and development | 4,838 | 4,889 | 15,384 | 16,814 |
Sales and marketing | 5,819 | 4,528 | 17,835 | 12,000 |
General and administrative | 3,686 | 2,920 | 9,989 | 8,688 |
Amortization of intangible assets | 2,674 | 1,821 | 8,244 | 5,144 |
Change in fair value of contingent consideration | (1,358) | 773 | 81 | 1,226 |
Issuance costs for warrants | 627 | |||
Acquisition related costs | 345 | 345 | ||
Gain from sale of SurgiBot assets, net | 44 | (11,915) | ||
Reversal of transfer fee accrual | (2,994) | (2,994) | ||
Total Operating Expenses (Income) | 13,054 | 14,931 | 36,969 | 44,499 |
Operating Loss | (11,881) | (15,669) | (30,927) | (44,013) |
Other (Expense) Income | ||||
Change in fair value of warrant liabilities | (8,760) | (22,887) | (24,438) | (25,213) |
Interest income | 391 | 62 | 982 | 124 |
Interest expense | (685) | (563) | (3,398) | (1,581) |
Other expense | (52) | (194) | (109) | (294) |
Total Other (Expense) Income, net | (9,106) | (23,582) | (26,963) | (26,964) |
Loss before income taxes | (20,987) | (39,251) | (57,890) | (70,977) |
Income tax benefit | 781 | 738 | 2,554 | 2,337 |
Net loss | (20,206) | (38,513) | (55,336) | (68,640) |
Other comprehensive loss | ||||
Foreign currency translation (loss) gain | (561) | 2,952 | (2,651) | 9,515 |
Comprehensive loss | $ (20,767) | $ (35,561) | $ (57,987) | $ (59,125) |
Net loss per share - basic and diluted | $ (0.10) | $ (0.26) | $ (0.27) | $ (0.51) |
Weighted average common shares outstanding - basic and diluted | 209,088 | 149,516 | 204,531 | 134,622 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current Assets | ||
Cash and cash equivalents | $ 41,748 | $ 91,217 |
Short-term investments | 39,670 | |
Accounts receivable, net | 5,669 | 1,536 |
Inventories | 10,242 | 10,817 |
Interest receivable | 51 | 80 |
Other current assets | 9,039 | 9,344 |
Total Current Assets | 106,419 | 112,994 |
Restricted cash | 663 | 6,389 |
Property and equipment, net | 6,659 | 6,670 |
Goodwill | 70,669 | 71,368 |
Other long term assets | 224 | 192 |
Total Assets | 227,559 | 250,251 |
Current Liabilities | ||
Accounts payable | 2,785 | 3,771 |
Accrued expenses | 7,432 | 10,974 |
Deferred revenue - current portion | 1,270 | 1,088 |
Deferred gain from sale of SurgiBot assets | 7,500 | |
Contingent consideration – current portion | 555 | 719 |
Notes payable - current portion, net of debt discount | 4,788 | |
Total Current Liabilities | 12,042 | 28,840 |
Long Term Liabilities | ||
Deferred revenue - less current portion | 131 | |
Contingent consideration – less current portion | 11,549 | 11,699 |
Notes payable - less current portion, net of debt discount | 19,106 | 8,385 |
Warrant liabilities | 15,044 | 14,090 |
Net deferred tax liabilities | 5,624 | 8,389 |
Total Liabilities | 63,496 | 71,403 |
Commitments and Contingencies (Note 18) | ||
Stockholders’ Equity | ||
Common stock $0.001 par value, 750,000,000 shares authorized at September 30, 2018 and December 31, 2017; 212,631,801 and 199,282,003 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 212 | 199 |
Additional paid-in capital | 664,439 | 621,261 |
Accumulated deficit | (502,965) | (447,640) |
Accumulated other comprehensive income | 2,377 | 5,028 |
Total Stockholders’ Equity | 164,063 | 178,848 |
Total Liabilities and Stockholders’ Equity | 227,559 | 250,251 |
Intellectual Property, Net [Member] | ||
Current Assets | ||
Intangible assets | $ 42,925 | $ 52,638 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement Of Partners Capital [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 750,000,000 | 750,000,000 |
Common stock, shares issued | 212,631,801 | 199,282,003 |
Common stock, shares outstanding | 212,631,801 | 199,282,003 |
Consolidated Statements of Shar
Consolidated Statements of Shareholders' Equity - 9 months ended Sep. 30, 2018 - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Income [Member] |
Balance at Dec. 31, 2017 | $ 178,848 | $ 199 | $ 621,261 | $ (447,640) | $ 5,028 | |
Balance, Shares at Dec. 31, 2017 | 199,282 | |||||
Stock-based compensation | 6,694 | 6,694 | ||||
Issuance of common stock and warrants, net of issuance costs | 279 | 279 | ||||
Exercise of stock options and warrants | 34,880 | $ 11 | 34,869 | |||
Exercise of stock options and warrants, Shares | 11,028 | |||||
Award of restricted stock units | 1 | $ 1 | ||||
Award of restricted stock units, Shares | 1,036 | |||||
Return of common stock to pay withholding taxes on restricted stock | (1,664) | $ (1) | (1,663) | |||
Return of common stock to pay withholding taxes on restricted stock, Shares | (537) | |||||
Cancellation of treasury stock | 1 | $ 1 | ||||
Cancellation of treasury stock, Shares | 537 | |||||
Issuance of common stock related to sale of SurgiBot assets | 3,000 | $ 1 | 2,999 | |||
Issuance of common stock related to sale of SurgiBot assets, Shares | 1,286 | |||||
Cumulative effect of change in accounting principle (Note 2) | 11 | 11 | ||||
Other comprehensive loss | (2,651) | (2,651) | ||||
Net loss | (55,336) | (55,336) | ||||
Balance at Sep. 30, 2018 | $ 164,063 | $ 212 | $ 664,439 | $ (502,965) | $ 2,377 | |
Balance, Shares at Sep. 30, 2018 | 212,632 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net loss | $ (55,336) | $ (68,640) |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | ||
Gain from sale of SurgiBot assets, net | (11,915) | |
Depreciation | 1,876 | 1,816 |
Amortization of intangible assets | 8,244 | 5,144 |
Amortization of debt discount and debt issuance costs | 575 | 212 |
Amortization of held to maturity investment discount | (51) | |
Stock-based compensation | 6,694 | 5,321 |
Non-employee warrant awards | 571 | |
Deferred tax benefit | (2,572) | (2,320) |
Loss on extinguishment of debt | 1,400 | 308 |
Change in fair value of warrant liabilities | 24,438 | 25,213 |
Change in fair value of contingent consideration | 81 | 1,226 |
Recovery of transfer fee | (2,994) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (4,262) | 886 |
Interest receivable | 28 | 79 |
Inventories | (1,276) | (3,519) |
Other current and long term assets | 27 | (2,454) |
Accounts payable | (903) | (1,599) |
Accrued expenses | (56) | 207 |
Deferred revenue | 361 | |
Net cash and cash equivalents used in operating activities | (35,641) | (37,549) |
Investing Activities | ||
Purchase of short-term investments | (39,619) | |
Proceeds related to sale of SurgiBot assets, net | 4,496 | |
Purchase of property and equipment | (490) | (1,488) |
Purchase of intellectual property | (418) | |
Proceeds from sale of property and equipment | 32 | |
Net cash and cash equivalents used in investing activities | (35,581) | (1,906) |
Financing Activities | ||
Payment of notes payable | (15,305) | (13,343) |
Proceeds from issuance of debt and warrants, net of issuance costs | 18,828 | 12,956 |
Payment of contingent consideration | (395) | (395) |
Proceeds from issuance of common stock and warrants, net of issuance costs | 279 | 31,546 |
Taxes paid related to net share settlement of vesting of restricted stock units | (1,662) | (168) |
Proceeds from issuance of common stock related to sale of SurgiBot assets | 3,000 | |
Proceeds from exercise of stock options and warrants | 11,396 | 5,449 |
Net cash and cash equivalents provided by financing activities | 16,141 | 36,045 |
Effect of exchange rate changes on cash and cash equivalents | (114) | (311) |
Net decrease in cash, cash equivalents and restricted cash | (55,195) | (3,721) |
Cash, cash equivalents and restricted cash, beginning of period | 97,606 | 34,590 |
Cash, cash equivalents and restricted cash, end of period | 42,411 | 30,869 |
Supplemental Disclosure for Cash Flow Information | ||
Interest paid | 1,135 | 597 |
Supplemental Schedule of Noncash Investing and Financing Activities | ||
Transfer of inventories to property and equipment | 2,160 | |
Transfer of property and equipment to inventories | 648 | |
Issuance of common stock as contingent consideration | 5,227 | |
Relative fair value of warrants issued with debt | 300 | |
Reclass of warrant liability to common stock and additional paid-in capital | 23,485 | $ 2,289 |
Cashless exercise of warrants | $ 4,272 |
Organization and Capitalization
Organization and Capitalization | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Organization and Capitalization | 1. Organization and Capitalization TransEnterix, Inc. (the “Company”) is a medical device company that is digitizing the interface between the surgeon and the patient to improve minimally invasive surgery by addressing the clinical and economic challenges associated with current laparoscopic and robotic options in today's value-based healthcare environment. The Company is focused on the commercialization of the Senhance™ Surgical System (the “Senhance System”), which digitizes laparoscopic minimally invasive surgery. The Senhance System allows for robotic precision, haptic feedback, surgeon camera control via eye sensing and improved ergonomics while offering responsible economics. The Senhance System has been granted a CE Mark in Europe for laparoscopic abdominal and pelvic surgery, as well as limited thoracic operations excluding cardiac and vascular surgery. In April 2017, the Company submitted a 510(k) application to the FDA for the Senhance System. On October 13, 2017, the Company received 510(k) clearance from the FDA for use in laparoscopic The Senhance System is a multi-port robotic surgery system which allows multiple robotic arms to control instruments and a camera. The system features advanced technology to enable surgeons with haptic feedback and the ability to move the camera via eye movement. The system replicates laparoscopic motion that is familiar to experienced surgeons, and integrates three-dimensional high definition vision technology. The Senhance System also offers responsible economics to hospitals by offering robotic technology with reusable instruments thereby reducing additional costs per surgery when compared to other robotic solutions. The Company also developed the SurgiBot™ System, a single-port, robotically enhanced laparoscopic surgical platform. On December 18, 2017, the Company announced that it had entered into an agreement with Great Belief International Limited (“GBIL”) to advance the SurgiBot System towards global commercialization. The agreement transfers ownership of the SurgiBot System assets, while the Company retains the option to distribute or co-distribute the SurgiBot System outside of China. GBIL intends to have the SurgiBot System manufactured in China and obtain Chinese regulatory clearance from the China Food and Drug Administration (“CFDA”), while entering into a nationwide distribution agreement with China National Scientific and Instruments and Materials Company (“CSIMC”) for the Chinese market. The agreement provides the Company with proceeds of at least $29 million, of which $7.5 million was received in December 2017. An additional $7.5 million was received at the second closing in March 2018, which included a $3.0 million equity investment at $2.33 per share of common stock. The remaining $14.0 million, representing minimum royalties, will be paid beginning at the earlier of receipt of Chinese regulatory approval or five years after the second closing date. On September 18, 2015, the Company entered into a Membership Interest Purchase Agreement, (the “Purchase Agreement”) with Sofar S.p.A., (“Sofar”) as seller, Vulcanos S.r.l. (“Vulcanos”), as the acquired company, and TransEnterix International, Inc. (“TransEnterix International”), a direct, wholly owned subsidiary of the Company which was incorporated in September 2015, as buyer. The closing of the transactions occurred on September 21, 2015 (the “Closing Date”) pursuant to which the Company acquired all of the membership interests of Vulcanos from Sofar (now known as the “Senhance Acquisition”), and changed the name of Vulcanos to TransEnterix Italia S.r.l (“TransEnterix Italia”). The Senhance Acquisition included all of the assets, employees and contracts related to the Senhance System. See Note 3 for a description of the related transactions. On September 3, 2013, TransEnterix Surgical, Inc. a Delaware corporation (“TransEnterix Surgical”), and SafeStitch Medical, Inc., a Delaware corporation (“SafeStitch”) consummated a merger transaction whereby TransEnterix Surgical merged with a merger subsidiary of SafeStitch, with TransEnterix Surgical as the surviving entity in the merger (the “Merger”). As a result of the Merger, TransEnterix Surgical became a wholly owned subsidiary of SafeStitch. On December 6, 2013, SafeStitch changed its name to TransEnterix, Inc. and increased the authorized shares of common stock from 225,000,000 to 750,000,000, and authorized 25,000,000 shares of preferred stock, par value $0.01 per share. As used herein, the term “Company” refers to the combination of SafeStitch and TransEnterix Surgical after giving effect to the Merger, and includes TransEnterix International, Inc.; TransEnterix Italia S.r.l.; TransEnterix Asia Pte. Ltd.; TransEnterix Taiwan Ltd.; TransEnterix Japan KK and TransEnterix Israel Ltd. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Basis of Presentation The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the standards of accounting measurement set forth in the Interim Reporting Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Consequently, the Company has not necessarily included in this Form 10-Q all information and footnotes required for audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements in this Form 10-Q contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Fiscal 2017 Form 10-K. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) have been condensed or omitted in the accompanying interim consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying Consolidated Financial Statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, SafeStitch LLC, TransEnterix Surgical, Inc., TransEnterix International, Inc., TransEnterix Italia S.r.l., TransEnterix Europe S.Á.R.L; TransEnterix Asia Pte. Ltd.; TransEnterix Taiwan Ltd.; TransEnterix Japan KK and TransEnterix Israel Ltd. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include identifiable intangible assets and goodwill, contingent consideration, warrant liabilities, stock compensation expense, revenue recognition, restructuring and other charges, excess and obsolete inventory reserves, and deferred tax asset valuation allowances. Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents. Restricted cash at September 30, 2018 includes $663,000 in cash accounts held as collateral primarily under the terms of an office operating lease, credit cards and automobile leases. Restricted cash at December 31, 2017 includes $6.0 million in a money market account, held in connection with the Company’s notes payable and $389,000 in cash accounts held as collateral primarily under the terms of an office operating lease, credit card agreement and automobile leases. Short-term Investments Short-term investments are considered to be “ ” The Company reassesses the appropriateness of the classification of its investments at the end of each reporting period. The Company has determined that its debt securities should be classified as held-to-maturity as of September 30, 2018. This classification was based upon management ’ The Company reviews its short-term investments for other-than-temporary impairment if the cost exceeds the fair value. No such impairment was recorded as of September 30, 2018. Concentrations and Credit Risk The Company’s principal financial instruments subject to potential concentration of credit risk are cash and cash equivalents, including amounts held in money market accounts. The Company places cash deposits with a federally insured financial institution. The Company maintains its cash at banks and financial institutions it considers to be of high credit quality; however, the Company’s cash deposits may at times exceed the FDIC insured limit. Balances in excess of federally insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts. The Company’s accounts receivable are derived from net revenue to customers located throughout the world. The Company evaluates its customers’ financial condition and, generally, requires no collateral from its customers. The Company provides reserves for potential credit losses but has not experienced significant losses to date. The Company had four customers who accounted for 88% of the Company’s net accounts receivable at September 30, 2018 and one customer who constituted 88% of the Company’s net accounts receivable at December 31, 2017. The Company had five customers who accounted for 68% of the Company’s net revenue for the nine months ended September 30, 2018 and two customers who constituted 89% of the Company’s net revenue for the nine months ended September 30, 2017. The Company had four customers who accounted for 96% of the Company’s net revenue for the three months ended September 30, 2018 and five customers who constituted 100% of the Company’s net revenue for the three months ended September 30, 2017. Accounts Receivable Accounts receivable are recorded at net realizable value, which includes an allowance for estimated uncollectable accounts. The allowance for uncollectible accounts was determined based on historical collection experience. Inventories Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or net realizable value. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The Company records reserves, when necessary, to reduce the carrying value of inventory to its net realizable value. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Identifiable Intangible Assets and Goodwill Identifiable intangible assets are recorded at cost, or when acquired as part of a business acquisition, at estimated fair value. Certain intangible assets are amortized over 5 to 10 years. Similar to tangible personal property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intellectual property consists of purchased patent rights and developed technology acquired as part of a business acquisition. Amortization of the patent rights is recorded using the straight-line method over the estimated useful life of the patents of 10 years. Amortization of the developed technology is recorded using the straight-line method over the estimated useful life of 5 to 7 years. This method approximates the period over which the Company expects to receive the benefit from these assets. No impairment existed at September 30, 2018 or December 31, 2017. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis at December 31 or when events or changes in circumstances indicate evidence a potential impairment exists, using a fair value based test. The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill is tested for impairment at the enterprise level. No impairment existed at September 30, 2018 or December 31, 2017. In-Process Research and Development In-process research and development (“IPR&D”) assets represent the fair value assigned to technologies that were acquired, which at the time of acquisition have not reached technological feasibility and have no alternative future use. IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. During the period that the IPR&D assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval, and the Company is able to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. The IPR&D was acquired on September 21, 2015. On October 13, 2017, upon regulatory approval and the ability to commercialize the products associated with the IPR&D assets, the assets were deemed definite-lived, reclassified to intellectual property and are now amortized based on their estimated useful lives. Property and Equipment Property and equipment consists primarily of machinery, manufacturing equipment, demonstration equipment, computer equipment, furniture, and leasehold improvements, which are recorded at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Machinery, manufacturing and demonstration equipment 3-5 years Computer equipment 3 years Furniture 5 years Leasehold improvements Lesser Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. Impairment of Long-Lived Assets The Company reviews its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the assets. If such estimated cash flows are less than the carrying amount of the long-lived assets, then such assets are written down to their fair value. The Company’s estimates of anticipated cash flows and the remaining estimated useful lives of long-lived assets could be reduced in the future, resulting in a reduction to the carrying amount of long-lived assets. Contingent Consideration Contingent consideration is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss. Deferred Gain from Sale of SurgiBot Assets In conjunction with the agreement with GBIL in relation to the transfer of the SurgiBot System assets, the Company received $7.5 million in December 2017. This amount was included in deferred gain from sale of SurgiBot assets in the consolidated balance sheet pending transfer of the assets in March 2018 and was recognized in gain from sale of SurgiBot assets in the consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2018. Warrant Liabilities The Company’s Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant (see Note 5). The warrant liability is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss. The selection of the appropriate valuation model and the inputs and assumptions that are required to determine the valuation requires significant judgment and requires management to make estimates and assumptions that affect the reported amount of the related liability and reported amounts of the change in fair value. Actual results could differ from those estimates, and changes in these estimates are recorded when known. As the warrant liability is required to be measured at fair value at each reporting date, it is reasonably possible that these estimates and assumptions could change in the near term. Translation of Foreign Currencies The functional currency of the Company’s operational foreign subsidiaries is Euros. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for a subsidiary using a functional currency other than the U.S. dollar is included in accumulated other comprehensive income or loss as a separate component of stockholders’ equity. The Company’s intercompany accounts are denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in accumulated other comprehensive income or loss as a separate component of stockholders’ equity, while gains and losses resulting from the remeasurement of intercompany receivables from a foreign subsidiary for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statement of operations and comprehensive loss. The net gains and losses included in net loss in the consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2018 and 2017 were not significant. Risk and Uncertainties The Company is subject to a number of risks similar to other similarly-sized companies in the medical device industry. These risks include, without limitation, the historical lack of profitability; the Company’s ability to raise additional capital; its ability to successfully develop, clinically test and commercialize its products; the timing and outcome of the regulatory review process for its products; changes in the health care and regulatory environments of the United States, Italy, other countries in the European Union, and other countries in which the Company intends to operate; its ability to attract and retain key management, marketing and scientific personnel; competition from new entrants; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution concern; competition in the market for robotic surgical devices; and its ability to identify and pursue development of additional products. Revenue Recognition The Company adopted ASC Topic 606, Revenue from Contracts with Customers The Company's system sale arrangements generally contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct, which is if a product or service is separately identifiable from other items in the bundled package, and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company’s system sale arrangements include a combination of the following performance obligations: system(s), system components, instruments, accessories, and system service. The Company’s system sale arrangements generally include a five-year period of service. The first year of service is generally free and included in the system sale arrangement and the remaining four years are generally included at a stated service price. The Company considers the service terms in the arrangements that are legally enforceable to be performance obligations. Other than service, the Company generally satisfies all of the performance obligations up-front. System components, system accessories, instruments, accessories, and service are also sold on a standalone basis. The Company recognizes revenues as the performance obligations are satisfied by transferring control of the product or service to a customer. The Company generally recognizes revenue for the performance obligations as follows: • System sales. For systems and system components sold directly to end customers, revenue is recognized when the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgment of delivery or installation, depending on the terms of the arrangement. For systems sold through distributors, for which distributors are responsible for installation, revenue is recognized generally at the time of shipment. The Company’s system arrangements generally do not provide a right of return. The systems are generally covered by a one-year warranty. Warranty costs were not material for the periods presented. • Instruments and accessories. Revenue from sales of instruments and accessories is recognized when control is transferred to the customers, which generally occurs at the time of shipment, but also occurs at the time of delivery depending on the customer arrangement. Accessory products include sterile drapes used to help ensure a sterile field during surgery, vision products such as replacement endoscopes, camera heads, light guides, and other items that facilitate use of the Senhance Surgical System. • Service. Service revenue is recognized ratably over the term of the service period as the customers benefit from the service throughout the service period. Revenue related to services performed on a time-and-materials basis is recognized when performed. For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which the Company separately sells the products or services. Due to limited sales to date, standalone selling prices are not directly observable. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer, and market conditions. The Company regularly reviews standalone selling prices and updates these estimates if necessary. The following table presents revenue disaggregated by types and geography: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in thousands) (in thousands) (unaudited) (unaudited) U.S. Systems $ 868 $ — $ 1,742 $ — Instruments and accessories 426 — 835 — Services 87 — 137 — Total U.S. revenue 1,381 — 2,714 — Outside of U.S. ("OUS") Systems 3,450 — 10,686 2,609 Instruments and accessories 441 10 2,653 683 Services 150 173 525 421 Total OUS revenue 4,041 183 13,864 3,713 Total Systems 4,318 — 12,428 2,609 Instruments and accessories 867 10 3,488 683 Services 237 173 662 421 Total revenue $ 5,422 $ 183 $ 16,578 $ 3,713 The Company recognizes sales by geographic area based on the country in which the customer is based. Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations was approximately $4.4 million as of September 30, 2018. The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Contract assets are included in accounts receivable and totaled $0.1 million and $0 as of September 30, 2018 and 2017, respectively. Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets for the periods presented. Revenue recognized for the nine months ended September 30, 2018 and 2017, that was included in the deferred revenue balance at the beginning of each reporting period was $0.3 million and $0.2 million, respectively. In connection with assets recognized from the costs to obtain a contract with a customer, the Company determined that the sales incentive programs for its sales team do not meet the requirements to be capitalized as the Company does not expect to generate future economic benefits from the related revenue from the initial sales transaction. Cost of Revenue Cost of revenue consists of contract manufacturing, materials, labor and manufacturing overhead incurred internally to produce the products. Shipping and handling costs incurred by the Company are included in cost of revenue. Research and Development Costs Research and development expenses primarily consist of engineering, product development and regulatory expenses, incurred in the design, development, testing and enhancement of our products. Research and development costs are expensed as incurred. Stock-Based Compensation The Company follows ASC 718 “Stock Compensation” and ASC 505-50 “Equity-Based Payments to Non-employees”, which provide guidance in accounting for share-based awards exchanged for services rendered and requires companies to expense the estimated fair value of these awards over the requisite service period. For awards granted to non-employees, the Company determines the fair value of the stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The Company recognizes compensation expense for stock-based awards based on estimated fair values on the date of grant for awards granted to employees. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The fair value of restricted stock units is determined by the market price of the Company’s common stock on the date of grant. The expense associated with stock-based compensation is recognized on a straight-line basis over the requisite service period of each award. The Company records as expense the fair value of stock-based compensation awards, including stock options and restricted stock units. Compensation expense for stock-based compensation was approximately $6,694,000 and $5,321,000 for the nine months ended September 30, 2018 and 2017, respectively. The TransEnterix, Inc. 2007 Incentive Compensation Plan (the “Plan”) was originally approved by the Company’s board of directors, (the “Board”) and adopted by the majority of the Company’s stockholders on November 13, 2007. The Plan has been subsequently amended, and approved by stockholders, as required, to increase the number of shares available under the Plan and to make other changes. As of May 24, 2018, the date of the Company’s annual meeting of stockholders for 2018, the number of shares of common stock, par value $0.001 per share (the “Common Stock”), authorized under the Plan is 40,940,000. Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets or liabilities for the temporary differences between financial reporting and tax basis of the Company’s assets and liabilities, and for tax carryforwards at enacted statutory rates in effect for the years in which the asset or liability is expected to be realized. The effect on deferred taxes of a change in tax rates is recognized in income during the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amounts expected to be realized. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Legislation”) was enacted into law, which reduced the U.S. federal corporate income tax rate to 21% for tax years beginning after December 31, 2017. As a result of the newly enacted tax rate, the Company adjusted its U.S. deferred tax assets as of December 31, 2017, by applying the new 21% rate, which resulted in a decrease to the deferred tax assets and a corresponding decrease to the valuation allowance of approximately $36.1 million. The Tax Legislation also implements a territorial tax system. Under the territorial tax system, in general, the Company's foreign earnings will no longer be subject to tax in the U.S. As part of transition to the territorial tax system the Tax Legislation includes a mandatory deemed repatriation of all undistributed foreign earnings that are subject to a U.S. income tax. The Company estimates that the deemed repatriation will not result in any additional U.S. income tax liability as it estimates it currently has no undistributed foreign earnings. In accordance with Staff Accounting Bulletin (“SAB”) No. 118, income tax effects of the Tax Legislation may be refined upon obtaining, preparing, or analyzing additional information during a measurement period of one year. During the measurement period provisional amounts may be adjusted for the effects, if any, of interpretive guidance issued after December 31, 2017, by U.S. regulatory and standard-setting bodies. Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Segments The Company operates in one business segment—the research, development and sale of medical device robotics to improve minimally invasive surgery. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results. Approximately 60% of the Company’s total consolidated assets are located within the U.S. as of September 30, 2018 and December 31, 2017. The remaining assets are mostly located in Europe and are primarily related to the Company’s facility in Italy, and include goodwill, intellectual property, other current assets, property and equipment, cash, accounts receivable and inventory of $91.8 million and $99.9 million at September 30, 2018 and December 31, 2017, respectively. Total assets outside of the U.S. excluding goodwill amounted to 31% of total consolidated assets at September 30, 2018 and December 31, 2017. The Company recognizes sales by geographic area based on the country in which the customer is based. For the nine months ended September 30, 2018, 16% of net revenue was generated in the U.S. and 83% was generated in Europe. For the nine months ended September 30, 2017, 62% of net revenue was generated in Europe and 38% in Asia. Impact of Recently Issued Accounting Standards In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. assessing this ASU and has In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments assessing this ASU and has In July 2017, the FASB Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception The adoption of this ASU should not have a material impact on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) In February 2016, the FASB issued ASU 2016-02, Leases In July 2018, the FASB issued ASU 2018-10, which provides narrow-scope improvements to the lease standard. We expect to elect the ‘package of practical expedients’, which permits us to forgo reassessment of our prior conclusions about lease identification, lease classification and initial direct costs for leases entered into prior to the effective date. Additionally, we expect to elect the practical expedient to not provide comparative reporting periods; therefore, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We do not expect to elect the ‘use-of-hindsight practical expedient’ or the land easement transition relief, the latter of which is not applicable to our industry. Upon adoption, operating leases will be reported on the statement of financial position as gross-up assets and liabilities. The Company has begun evaluating and planning for adoption and implementation of this ASU, including reviewing all material leases, the ASU practical expedient guidelines and current accounting policy elections, and assessing the overall financial statement impact. We expect this ASU will have a material impact on the Company’s financial position. The impact on the Company’s results of operations is currently being evaluated. The impact of this ASU is non-cash in nature and is not expected to affect the Company’s cash flows. In February 2017, the FASB issued ASU No. 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) — Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The adoption of this ASU did not have an impact on the consolidated financial statements. The Company adopted the New Revenue Standard in the first quarter of fiscal year 2018 using |
Acquisition of Senhance Surgica
Acquisition of Senhance Surgical Robotic System | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition of Senhance Surgical Robotic System | 3. Acquisition of Senhance Surgical Robotic System On September 21, 2015, the Company completed the strategic acquisition, through its wholly owned subsidiary TransEnterix International, from Sofar, of all of the assets, employees and contracts related to the advanced robotic system for minimally invasive laparoscopic surgery now known as the Senhance System and changed the name of the acquired company from Vulcanos S.r.l. to TransEnterix Italia S.r.l. Under the terms of the Purchase Agreement, the consideration consisted of the issuance of 15,543,413 shares of the Company’s common stock (the “Securities Consideration”) and approximately $25.0 million U.S. Dollars and €27.5 million Euro in cash consideration (the “Cash Consideration”). The Securities Consideration was issued in full at the closing of the Senhance Acquisition; the Cash Consideration was or will be paid in four tranches, as follows: (1) $25.0 million of the Cash Consideration, which was paid at closing. (2) On December 30, 2016, the Company and Sofar entered into an Amendment to the Purchase Agreement (the “Amendment”) to restructure the terms of the second tranche of the Cash Consideration (the “Second Tranche”). Under the Amendment, the Second Tranche was restructured to be paid through the (A) the issuance of 3,722,685 shares of the Company’s common stock with an aggregate fair market value of €5.0 million and (B) the payment of €5.0 million in cash upon the occurrence of either (i) receipt of clearance from the FDA for the Senhance System; or (ii) the Company having cash on hand of at least $50.0 million, or (iii) successfully completing a financing, raising at least $50.0 million in gross proceeds after September 2015, exclusive of any financing proceeds related to the December 2016 purchase agreement between the Company and Lincoln Park Capital Fund, LLC; with payment of simple interest at a rate of 9.0% per annum beginning on December 31, 2016. The Five Million Euro (€5,000,000) cash payment began to accrue simple interest at a rate of 9% per annum beginning on December 31, 2016 and continued to accrue interest until November 15, 2017 when it was paid in full. (3) The third tranche of the Cash Consideration (the “Third Tranche”) of €15.0 million shall be payable upon achievement of trailing revenues from sales or services contracts of the Senhance System of at least €25.0 million over a calendar quarter. (4) The fourth tranche of the Cash Consideration of €2.5 million was payable in installments by December 31 of each year as reimbursement for certain debt payments made by Sofar under an existing Sofar loan agreement in such year, with payments beginning as of December 31, 2016. As of September 30, 2018, the Company had paid €2.1 million of the fourth tranche. The Third Tranche payments will be accelerated in the event that (i) the Company or TransEnterix International is acquired, (ii) the Company significantly reduces or suspends selling efforts of the Senhance System, or (iii) the Company acquires a business that offers alternative products that are directly competitive with the Senhance System. The Purchase Agreement contains customary representations and warranties of the parties and the parties have customary indemnification obligations, which are subject to certain limitations described further in the Purchase Agreement. The Senhance Acquisition was accounted for as a business combination utilizing the methodology prescribed in ASC 805. The purchase price for the Senhance Acquisition was allocated to the assets acquired and liabilities assumed based on their estimated fair values. |
Cash, Cash Equivalents, and Res
Cash, Cash Equivalents, and Restricted Cash | 9 Months Ended |
Sep. 30, 2018 | |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents, and Restricted Cash | 4. Cash, Cash Equivalents, and Restricted Cash Cash, cash equivalents and restricted cash consist of the following: September 30, December 31, 2018 2017 (In thousands) (unaudited) Cash $ 6,987 $ 4,039 Money market 34,761 87,178 Total cash and cash equivalents $ 41,748 $ 91,217 Restricted cash $ 663 $ 6,389 Total $ 42,411 $ 97,606 Restricted cash at September 30, 2018 includes $663,000 in cash accounts held as collateral primarily under the terms of an office operating lease, credit card agreement and automobile leases. Restricted cash at December 31, 2017 includes $6.0 million in a money market account, held in connection with the Company’s notes payable and $389,000 in cash accounts held as collateral primarily under the terms of an office operating lease, credit card agreement and automobile leases. |
Fair Value
Fair Value | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 5. Fair Value The Company held certain assets and liabilities that are required to be measured at fair value on a recurring basis. These assets and liabilities include cash and cash equivalents, restricted cash, contingent consideration and warrant liabilities. ASC 820-10 (“Fair Value Measurement Disclosure”) requires the valuation using a three-tiered approach, which requires that fair value measurements be classified and disclosed in one of three tiers. These tiers are: Level 1, defined as quoted prices in active markets for identical assets or liabilities; Level 2, defined as valuations based on observable inputs other than those included in Level 1, such as quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable input data; and Level 3, defined as valuations based on unobservable inputs reflecting the Company’s own assumptions, consistent with reasonably available assumptions made by other market participants. The Company did not have any transfers of assets and liabilities between Level 1, Level 2, and Level 3 of the fair value hierarchy during the nine months ended September 30, 2018 and the year ended December 31, 2017. For assets and liabilities recorded at fair value, it is the Company’s policy to maximize the use of observable inputs and minimize the use of unobservable inputs when developing fair value measurements, in accordance with the fair value hierarchy. Fair value measurements for assets and liabilities where there exists limited or no observable market data and therefore, are based primarily upon estimates, are often calculated based on the economic and competitive environment, the characteristics of the asset or liability and other factors. Therefore, the results cannot be determined with precision and may not be realized in an actual sale or immediate settlement of the asset or liability. Additionally, there may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results of current or future values. The Company utilizes fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. As prescribed by U.S. GAAP, the Company groups assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. An adjustment to the pricing method used within either Level 1 or Level 2 inputs could generate a fair value measurement that effectively falls in a lower level in the hierarchy. The determination of where an asset or liability falls in the hierarchy requires significant judgment. The Company evaluates its hierarchy disclosures and based on various factors, it is possible that an asset or liability may be classified differently from period to period. However, the Company expects changes in classifications between levels will be rare. The carrying values of accounts receivable, short-term investments, interest receivable, accounts payable, and certain accrued expenses at September 30, 2018 and December 31, 2017, approximate their fair values due to the short-term nature of these items. The Company’s notes payable balance also approximates fair value as of September 30, 2018 and December 31, 2017, as the interest rates on the notes payable approximate the rates available to the Company as of these dates. The following are the major categories of assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): September 30, 2018 (In thousands) (unaudited) Description Quoted Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets measured at fair value Cash and cash equivalents $ 41,748 $ — $ — $ 41,748 Restricted cash 663 — — 663 Total Assets measured at fair value $ 42,411 $ — $ — $ 42,411 Liabilities measured at fair value Contingent consideration $ — $ — $ 12,104 $ 12,104 Warrant liabilities — — 15,044 15,044 Total liabilities measured at fair value $ — $ — $ 27,148 $ 27,148 December 31, 2017 (In thousands) Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets measured at fair value Cash and cash equivalents $ 91,217 $ — $ — $ 91,217 Restricted cash 6,389 — — 6,389 Total Assets measured at fair value $ 97,606 $ — $ — $ 97,606 Liabilities measured at fair value Contingent consideration $ — $ — $ 12,418 $ 12,418 Warrant liabilities — — 14,090 14,090 Total liabilities measured at fair value $ — $ — $ 26,508 $ 26,508 The Company’s financial liabilities consisted of contingent consideration potentially payable to Sofar related to the Senhance Acquisition in September 2015 (Note 3). This liability is reported as Level 3 as estimated fair value of the contingent consideration related to the acquisition requires significant management judgment or estimation and is calculated using the income approach, using various revenue and cost assumptions and applying a probability to each outcome. The change in fair value of the contingent consideration of $0.1 million for the nine months ended September 30, 2018 was primarily due to a change in the estimated discount rate, the effect of the passage of time on the fair value measurement and the impact of foreign currency exchange rates. The change in fair value of the contingent consideration of $1.2 million for the nine months ended September 30, 2017 was primarily due to the change in discount rate, effect of the passage of time on the fair value measurement and the impact of foreign currency exchange rates. Adjustments associated with the change in fair value of contingent consideration are included in the Company’s consolidated statements of operations and comprehensive loss. On April 28, 2017, the Company sold 24.9 million units (the “Units”), each consisting of one share of the Company’s Common Stock, a Series A warrant to purchase one share of Common Stock with an exercise price of $1.00 per share (the “Series A Warrants”), and a Series B warrant to purchase 0.75 shares of Common Stock with an exercise price of $1.00 per share (the “Series B Warrants,” together with the Series A Warrants, the “Warrants”), at an offering price of $1.00 per Unit. Each Series A Warrant was exercisable at any time beginning on the date of issuance, and from time to time thereafter, through and including the first anniversary of the issuance date, unless terminated earlier as provided in the Series A Warrant. Receipt of 510(k) clearance for the Senhance System on October 13, 2017, triggered the acceleration of the expiration date of the Series A Warrants to October 31, 2017. Each Series B Warrant may be exercised at any time beginning on the date of issuance and from time to time thereafter through and including the fifth anniversary of the issuance date. The fair value of the Series A Warrants of $2.5 million at the date of issuance was estimated using the Black-Scholes Merton model which used the following inputs: term of 1 year, risk free rate of 1.07%, no dividends, volatility of 73.14%, and share price of $0.65 per share based on the trading price of the Company’s Common Stock. All Series A Warrants were exercised as of December 31, 2017. The change in fair value of warrants for the nine months ended September 30, 2018 and 2017 of $24.4 million and $25.2 million, respectively was included in the Company’s consolidated statement of operations and comprehensive loss. The following table presents the inputs and valuation methodologies used for the Company’s fair value of the Series B warrants: April 28, 2017 Series B September 30, 2018 December 31, 2017 (date of issuance) Fair value $15.0 million $14.1 million $6.2 million Valuation methodology Monte Carlo Monte Carlo Black-Scholes Merton Term 3.58 years 4.33 years 5 years Risk free rate 2.90% 2.13% 1.81% Dividends — — — Volatility 89.47% 80.60% 73.14% Share price $ 5.80 $ 1.93 $ 0.65 Probability of additional financing 100% in 2019 25% in 2018 and 75% in 2019 Not Applicable The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements classified in Level 3, with the exception of the warrant liability, which is explained above as of September 30, 2018 and December 31, 2017: Valuation Methodology Significant Unobservable Input Weighted (range, if applicable) Contingent consideration Probability income approach Milestone dates 2018 to Discount rate Probability 9% to 12% 100% The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the nine months ended September 30, 2018: Fair Value Measurement Reporting Date (Level 3) (In thousands) (unaudited) Common stock Contingent warrants consideration Balance at December 31, 2017 $ 14,090 $ 12,418 Exercise of warrants (23,484 ) — Change in fair value 24,438 81 Payment for contingent consideration — (395 ) Balance at September 30, 2018 $ 15,044 $ 12,104 Current portion — 555 Long-term portion 15,044 11,549 Balance at September 30, 2018 $ 15,044 $ 12,104 |
Accounts Receivable, Net
Accounts Receivable, Net | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Accounts Receivable, Net | 6. Accounts Receivable, Net The following table presents the components of accounts receivable: September 30, December 31, 2018 2017 (In thousands) (unaudited) Gross accounts receivable $ 5,742 $ 1,609 Allowance for uncollectible accounts (73 ) (73 ) Total accounts receivable, net $ 5,669 $ 1,536 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 7. Inventories The components of inventories are as follows: September 30, December 31, 2018 2017 (In thousands) (unaudited) Finished goods $ 4,212 $ 4,432 Raw materials 6,030 6,385 Total inventories $ 10,242 $ 10,817 |
Other Current Assets
Other Current Assets | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Other Current Assets | 8. Other Current Assets The following table presents the components of other current assets: September 30, December 31, 2018 2017 (In thousands) (unaudited) Advances to vendors $ 6,406 $ 6,403 Prepaid expenses 2,540 1,519 Other receivables 93 1,422 Total $ 9,039 $ 9,344 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | 9. Property and Equipment Property and equipment consisted of the following: September 30, December 31, 2018 2017 (In thousands) (unaudited) Machinery, manufacturing and demonstration equipment $ 12,095 $ 10,866 Computer equipment 2,260 2,187 Furniture 628 598 Leasehold improvements 2,273 2,237 Total property and equipment 17,256 15,888 Accumulated depreciation and amortization (10,597 ) (9,218 ) Property and equipment, net $ 6,659 $ 6,670 Depreciation expense was $1,876,000 and $1,816,000, for the nine months ended September 30, 2018 and 2017, respectively. |
Goodwill, In-Process Research a
Goodwill, In-Process Research and Development and Intellectual Property | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, In-Process Research and Development and Intellectual Property | 10. Goodwill, In-Process Research and Development and Intellectual Property Goodwill Goodwill of $93.8 million was recorded in connection with the Merger, as described in Note 1, and goodwill of $38.3 million was recorded in connection with the Senhance Acquisition, as described in Note 3. The carrying value of goodwill and the change in the balance for the nine months ended September 30, 2018 is as follows: Goodwill (In (unaudited) Balance at December 31, 2017 $ 71,368 Foreign currency translation impact (699 ) Balance at September 30, 2018 $ 70,669 Accumulated impairment of goodwill as of September 30, 2018 and December 31, 2017 was $61.8 million. No impairment was recorded as of September 30, 2018 and December 31, 2017. During the second quarter of 2017, the Company’s stock price experienced a significant decline. The Company performed a Step 1 goodwill impairment test as of the second quarter of 2017 and determined that no charge to goodwill for impairment was required during such second quarter. As of December 31, 2017, the Company elected to bypass the qualitative assessment and calculated the fair value of the Company’s reporting unit, which exceeded the carrying amount. Accordingly, no charge for goodwill impairment was required as of December 31, 2017. No impairment indicators were noted during the nine months ended September 30, 2018. In-Process Research and Development As described in Note 3, on September 21, 2015, the Company acquired all of the assets related to the Senhance System and recorded $17.1 million of IPR&D. The estimated fair value of the IPR&D was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flows were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 45% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions. On October 13, 2017, upon receipt of regulatory clearance to commercialize the products associated with the IPR&D assets in the United States, the assets were deemed definite-lived, transferred to developed technology and are amortized based on their estimated useful lives. Intellectual Property As described in Note 3, on September 21, 2015, the Company acquired all of the developed technology related to the Senhance System and recorded $48.5 million of intellectual property. The estimated fair value of the intellectual property was determined using a probability-weighted income approach, which discounts expected future cash flows to present value. The projected cash flows were based on certain key assumptions, including estimates of future revenue and expenses, taking into account the stage of development of the technology at the acquisition date and the time and resources needed to complete development. The Company used a discount rate of 45% and cash flows that have been probability adjusted to reflect the risks of product commercialization, which the Company believes are appropriate and representative of market participant assumptions. In November 2016, the Company agreed to enter into a technology and patents purchase agreement with Sofar to acquire from Sofar certain technology and intellectual property rights related to the Senhance Acquisition, and formerly licensed by the Company. The technology and patents were acquired in 2017 at an acquisition price of $400,000. The components of gross intellectual property, accumulated amortization, and net intellectual property as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 (In thousands) (In thousands) (unaudited) Gross Carrying Amount Accumulated Amortization Foreign currency translation impact Net Carrying Amount Gross Carrying Amount Accumulated Amortization Foreign currency translation impact Net Carrying Amount Developed technology 66,413 (27,936 ) 4,074 42,551 66,413 (19,724 ) 5,529 52,218 Technology and patents purchased 400 (62 ) 36 374 400 (30 ) 50 420 Total intellectual property $ 66,813 $ (27,998 ) $ 4,110 $ 42,925 $ 66,813 $ (19,754 ) $ 5,579 $ 52,638 The weighted average remaining useful life of the developed technology and technology and patents purchased was 4 years and 8.6 years, respectively as of September 30, 2018 and 4.8 years and 9.3 years, respectively as of December 31, 2017. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 11. Income Taxes Income taxes have been accounted for using the asset and liability method in accordance with ASC 740 “Income Taxes”. The Company computes its interim provision for income taxes by applying the estimated annual effective tax rate method. The Company estimates an annual effective tax rate of 5.0% for the year ending December 31, 2018. This rate does not include the impact of any discrete items. The Company incurred losses for the nine month period ended September 30, 2018 and is forecasting additional losses through the year, resulting in an estimated net loss for both financial statement and tax purposes for the year ending December 31, 2018. Due to the Company’s history of losses, there is not sufficient evidence to record a net deferred tax asset associated with the U.S., Luxembourg, Swiss, and Asian operations. Accordingly, a full valuation allowance has been recorded related to the net deferred tax asset in those jurisdictions. There is no net deferred tax asset recorded in relation to TransEnterix Italia and accordingly no valuation allowance has been recorded in that jurisdiction The deferred tax benefit during the nine months ended September 30, 2018 and 2017, was approximately $2.6 million and $2.3 million, respectively. The Company’s effective tax rate for each of the nine-month periods ended September 30, 2018 and 2017 was 4.4% and 3.3%, respectively. At September 30, 2018, the Company had no unrecognized tax benefits that would affect the Company’s effective tax rate. At September 30, 2018, the Company’s accounting for the 2017 Tax Cuts and Jobs Act is still in process; however, it expects to complete the accounting by December 2018. Updates to the Company’s calculations may result in changes to the provisional adjustments recorded at year-end. |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2018 | |
Accrued Liabilities Current [Abstract] | |
Accrued Expenses | 12. Accrued Expenses The following table presents the components of accrued expenses: September 30, December 31, 2018 2017 (In thousands) (unaudited) Compensation and benefits $ 4,975 $ 4,533 Other 814 504 Deferred rent 437 595 Legal and professional fees 400 386 Consulting and other vendors 299 1,414 Taxes and other assessments 190 3,192 Interest 159 309 Royalties 158 41 Total $ 7,432 $ 10,974 |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Notes Payable | 13. Notes Payable On May 23, 2018, the Company and its domestic subsidiaries, as co-borrowers, entered into a Loan and Security Agreement (the “Hercules Loan Agreement”) with several banks and other financial institutions or entities from time to time party to the Loan Agreement (collectively, the “Lender”) and Hercules Capital, Inc., as administrative agent and collateral agent (the “Agent”). Under the Hercules Loan Agreement, the Lender has agreed to make certain term loans to the Company in the aggregate principal amount of up to $40,000,000, with funding of the first $20,000,000 tranche occurring on May 23, 2018 (the “Initial Funding Date”). The Company will be eligible to draw on the second tranche of $10,000,000 upon achievement of certain Senhance System revenue-related milestones for its 2018 fiscal year, and a third tranche of $10,000,000 upon achievement of designated trailing six month GAAP net revenue from Senhance System sales. The Company is entitled to make interest-only payments until December 1, 2020, and at the end the interest-only period, the Company will be required to repay the term loans over an eighteen-month period based on an eighteen-month amortization schedule, with a final maturity date of June 1, 2022. The term loans will be required to be repaid if the term loans are accelerated following an event of default. The term loans bear interest at a rate equal to the greater of (i) 9.55% per annum (the “Fixed Rate”) and (ii) the Fixed Rate plus the prime rate (as reported in The Wall Street Journal) minus 5.00%. Following the draw of the third tranche, the Fixed Rate will be reduced to 9.20% effective on the first interest payment date to occur during the first fiscal quarter following the draw of the third tranche. On the Initial Funding Date, the Company was obligated to pay a facility fee of $400,000, recorded as a debt discount. In addition, the Company is permitted to prepay the term loans in full at any time, with a prepayment fee of 3.0% of the outstanding principal amount of the loan in the first year after the Initial Funding Date, 2.0% if the prepayment occurs in the second year after the Initial Funding Date and 1.0% thereafter. Upon prepayment of the term loans in full or repayment of the terms loans at the maturity date or upon acceleration, the Company is required to pay a final fee of 6.95% of the aggregate principal amount of term loans funded. The final payment fee is accreted to interest expense over the life of the term loan and included within notes payable on the consolidated balance sheet. The Company’s obligations under the Hercules Loan Agreement are to be guaranteed by all current and future material foreign subsidiaries of the Company and are secured by a security interest in all of the assets of the Company and their current and future domestic subsidiaries and all of the assets of their current and future material foreign subsidiaries, including a security interest in the intellectual property. The Hercules Loan Agreement contains customary representations and covenants that, subject to exceptions, restrict the Company’s and its subsidiaries’ ability to do the following, among other things: declare dividends or redeem or repurchase equity interests; incur additional indebtedness and liens; make loans and investments; engage in mergers, acquisitions, and asset sales; transact with affiliates; undergo a change in control; add or change business locations; and engage in businesses that are not related to its existing business. Under the terms of the Hercules Loan Agreement, the Company is required to maintain cash and/or investment property in accounts which perfect the Agent’s first priority security interest in such accounts in an amount equal to the lesser of (i) (x) 120% of the then-outstanding principal balance of the term loans, including accrued interest and any other fees payable under the agreement to the extent accrued and payable plus (y) an amount equal to the then-outstanding accounts payable of the Company on a consolidated basis that are more than 90 days past due and (ii) of the aggregate cash of the Company and its consolidated subsidiaries In connection with its entrance into the Hercules Loan Agreement, the Company repaid its existing loan and security agreement The Company recognized a loss of $1.4 million on the extinguishment of notes payable which is included in interest expense on the consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2018. The Company paid $680,000 in final payment obligations and $287,000 in prepayment fees under the Innovatus Loan Agreement upon repayment. Under the Innovatus Loan Agreement, entered into on May 10, 2017, Innovatus agreed to make certain term loans in the aggregate principal amount of up to $17,000,000. Funding of the first $14,000,000 tranche occurred on May 10, 2017. The Innovatus Loan Agreement allowed for interest-only payments for up to twenty-four months at a fixed rate equal to 11% per annum, of which 2.5% could be paid in-kind and added to the outstanding principal amount of the term loans until the earlier of (i) the first anniversary following the funding date and (ii) the Company’s failure to achieve an Interest-Only Milestone. At the end of the interest-only period, the Company would be required to repay the term loans over a two-year period, based on a twenty-four (24) month amortization schedule, with a final maturity date of May 10, 2021. In connection with the funding, the Company paid a facility fee of $170,000 on the date of funding of the first tranche and incurred additional debt issuance costs of approximately $1.2 million, recorded as debt discount. In addition, the Company issued warrants to the Lender to purchase shares of the Company’s common stock that will expire five (5) years from such issue date. The warrants issued in connection with funding of the first tranche entitle the Lender to purchase up to 1,244,746 shares of the Company’s common stock at an exercise price of $1.00 per share. The Company estimated the fair value of the warrants to be $300,000. The value of the warrants was classified as equity and recorded as a discount to the loan. The debt discount was amortized as interest expense using the effective interest method over the life of the loan. As of September 30, 2018 and December 31, 2017, the unamortized debt discount was $0 and $1.0 million, respectively. In connection with its entrance into the Innovatus Loan Agreement, the Company repaid its then-existing credit facility with Silicon Valley Bank and Oxford Finance LLC, which loan and security agreement, as subsequently amended and restated is referred to as the “SVB Loan Agreement.” The Company recognized a loss of $308,000 on the extinguishment of notes payable which is included in interest expense on the consolidated statements of operations and comprehensive loss for the year ended December 31, 2017. The Company paid $1.3 million in final payment obligations and $255,000 in facility fees under the SVB Loan Agreement upon repayment. In connection with the issuance of the notes payable and amendments under the SVB Loan Agreement, the Company incurred approximately $371,000 in debt issuance costs paid to Silicon Valley Bank and Oxford Finance and third parties and $280,000 in debt issuance costs related to issuance of warrants to such prior lenders. The unamortized balance of $107,000 as of December 31, 2016, was amortized using the effective interest method, until the debt was extinguished in May 2017. At the time of extinguishment in May 2017, $63,000 of unamortized debt issuance costs were included in the loss on extinguishment of notes payable. |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Warrants | 14. Warrants The following table summarizes the change in warrants for the nine months ended September 30, 2018: Weighted Weighted Average Weighted Average Remaining Average Number of Exercise Contractual Grant Date Warrants Price Life (in years) Fair Value Outstanding at December 31, 2017 13,162,668 $ 1.08 4.5 $ 0.39 Exercised (8,562,631 ) 1.09 — — Cancelled (95,600 ) 1.65 — — Outstanding at September 30, 2018 4,504,437 1.03 4.0 $ 0.26 In connection with the borrowings under the SVB Loan Agreement, the Company issued warrants to Silicon Valley Bank and Oxford Finance to purchase shares of the Company’s Common Stock amounting to an aggregate of 430,815 warrants under the SVB Loan Agreement. The warrants expire seven years from their respective issue date. In February 2018, the Company terminated its relationship with a vendor who had been issued warrants to acquire 950,000 shares of Common Stock (the “Service Warrants”) with staggered vesting requirements. As part of the termination agreement, the Company accelerated the full vesting of the Service Warrants. |
Purchase Agreement, Controlled
Purchase Agreement, Controlled Equity Offering and Public Offering of Common Stock | 9 Months Ended |
Sep. 30, 2018 | |
Purchase Agreement Controlled Equity Offering And Public Offering Of Common Stock [Abstract] | |
Purchase Agreement, Controlled Equity Offering and Public Offering of Common Stock | 15. Purchase Agreement, Controlled Equity Offering and Public Offering of Common Stock On April 28, 2017, the Company sold 24.9 million units, each consisting of one share of the Company’s Common Stock, a Series A warrant to purchase one share of Common Stock, and a Series B warrant to purchase 0.75 shares of Common Stock, at a public offering price of $1.00 per unit for aggregate gross proceeds of $24.9 million in an underwritten firm commitment public offering. Net proceeds after issuance costs were $23.2 million, assuming no exercise of the warrants. The closing of the public offering occurred on May 3, 2017. On December 16, 2016, the Company entered into a purchase agreement (the “LPC Purchase Agreement”) with Lincoln Park Capital Fund, LLC, (“Lincoln Park”), pursuant to which the Company had the right to sell to Lincoln Park up to an aggregate of $25.0 million in shares of the Company’s Common Stock, subject to certain limitations and conditions set forth in the LPC Purchase Agreement. The Company issued to Lincoln Park 345,421 shares of Common Stock as commitment shares in consideration for the LPC Purchase Agreement through April 27, 2017. Sales under the LPC Purchase Agreement for the year ended December 31, 2016 were 300,000 shares, with gross proceeds of $412,500 and net proceeds of $392,500. Sales under the LPC Purchase Agreement for the year ended December 31, 2017 were 3,972,741 shares, with gross and net proceeds of $5,304,000. Effective April 27, 2017, the Company terminated the LPC Purchase Agreement. The LPC Purchase Agreement provided the Company with an election to terminate the Purchase Agreement for any reason or for no reason by delivering a notice to Lincoln Park, and the Company did not incur any early termination penalties in connection with the termination of the LPC Purchase Agreement. On August 31, 2017, the Company entered into an At-the-Market Equity Offering Sales Agreement (the “2017 Sales Agreement”) with Stifel, Nicolaus & Company, Incorporated (“Stifel”), as sales agent, pursuant to which the Company can sell through Stifel, from time to time, up to $50.0 million in shares of Common Stock in an at-the-market offering. The Company pays Stifel a commission of approximately 3% of the aggregate gross proceeds received from all sales of common stock under the 2017 Sales Agreement. Unless otherwise terminated earlier, the 2017 Sales Agreement continues until all shares available under the Sales Agreement have been sold. The following table summarizes the total sales under the 2017 Sales Agreement for the periods indicated (in thousands, except per share amounts): 2017 Sales Agreement Year Ended December 31, 2017 Total shares of common stock sold 15,998.5 Average price per share $ 3.13 Gross proceeds $ 50,000 Commissions earned by Stifel $ 1,500 Other issuance costs $ 97 |
Basic and Diluted Net Loss per
Basic and Diluted Net Loss per Share | 9 Months Ended |
Sep. 30, 2018 | |
Earnings Per Share [Abstract] | |
Basic and Diluted Net Loss per Share | 16 . Basic and Diluted Net Loss per Share Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net loss per common share is computed giving effect to all dilutive potential common shares that were outstanding during the period. Diluted potential common shares consist of incremental shares issuable upon exercise of stock options, warrants and restricted stock units. In computing diluted net loss per share for the nine months ended September 30, 2018 and 2017, no adjustment has been made to the weighted average outstanding common shares as the assumed exercise of outstanding options, warrants and restricted stock units would be anti-dilutive. |
Related Person Transactions
Related Person Transactions | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | 17. Related Person Transactions On September 18, 2015, TransEnterix Italia entered into a services agreement for receipt of administrative services from Sofar and payment of rent to Sofar, a stockholder that owned approximately 9% and 12% of the Company’s Common Stock at September 30, 2018 and 2017, respectively. Expenses for administrative services were approximately $0 and $52,000 for the nine months ended September 30, 2018 and 2017, respectively. The services agreement terminated in 2017. As discussed in Note 3, in September 2015, the Company completed the Senhance Acquisition using a combination of cash, stock and potential post-acquisition milestone payments. On December 30, 2016, the Company entered into an Amendment to the Senhance Acquisition purchase agreement with Sofar to restructure the terms of the Second Tranche of the Cash Consideration. Under the Amendment, the Second Tranche was restructured to reduce the contingent cash consideration by €5.0 million in exchange for the issuance of 3,722,685 shares of the Company’s Common Stock with an aggregate fair market value of €5.0 million. On January 4, 2017, the Company issued to Sofar 3,722,685 shares of the Common Stock with a fair value of €5.0 million. The price per share was $1.404 and was calculated based on the average of the closing prices of the Company’s Common Stock on ten consecutive trading days ending one day before the execution of the Amendment. In March 2018, TransEnterix Europe entered into a Service Supply Agreement with 1Med S.A. for certain regulatory consulting services. Andrea Biffi, a current member of the Company’s Board of Directors, owns a non-controlling interest in 1Med S.A. Expenses under the Service Supply Agreement were approximately $62,000 for the nine months ended September 30, 2018. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. Commitments and Contingencies Contingent Consideration As discussed in Note 3, in September 2015, the Company completed the Senhance Acquisition using a combination of cash, stock and potential post-acquisition milestone payments. These milestone payments may be payable in the future, depending on the achievement of certain regulatory and commercial milestones. On December 30, 2016, the Company entered into an Amendment to restructure the terms of the Second Tranche of the Cash Consideration. Under the Amendment, the Second Tranche was restructured to reduce the contingent cash consideration by €5.0 million in exchange for the issuance of 3,722,685 shares of the Company’s Common Stock with an aggregate fair market value of €5.0 million. As of December 31, 2017, the fair value of the contingent consideration was $12.4 million. On September 30, 2018, the fair value of the contingent consideration was $12.1 million. Legal Proceedings No liability or related charge was recorded to earnings in the Company’s consolidated financial statements for legal contingencies for the nine months ended September 30, 2018 or the year ended December 31, 2017, as all pending litigation, including two putative derivative claims, was dismissed in 2017 with prejudice in the Company's favor. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. Subsequent Events On September 23, 2018, the Company entered into an Asset Purchase Agreement (the “MST Purchase Agreement”) with MST Medical Surgery Technologies Ltd., an Israeli private company (the “Seller”), and two of the Company’s wholly owned subsidiaries, as purchasers of the assets of the Seller, including the intellectual property assets (collectively, the “Buyers”). The closing of the transactions contemplated by the MST Purchase Agreement occurred on October 31, 2018, pursuant to which the Company acquired the Under the terms of the MST Purchase Agreement, at the closing the Buyers purchased substantially all of the assets of the Seller. The acquisition price consisted of two tranches. At or prior to the closing of the transaction the Buyers paid $5.8 million in cash and the Company issued 3.15 million shares of the Company’s common stock. A second tranche of $6.6 million in additional consideration will be payable in cash, stock or cash and stock, at the discretion of the Company, within one year after the closing date. The MST Purchase Agreement contains customary representations and warranties of the parties and the parties have customary indemnification obligations, which are subject to certain limitations described further in the MST Purchase Agreement. On October 23, 2018, Hercules funded the Second Tranche of $10,000,000 under the Hercules Loan Agreement. The Second Tranche funding remains subject to all terms and conditions under the Hercules Loan Agreement . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company has prepared the accompanying unaudited interim condensed consolidated financial statements in accordance with the instructions to Form 10-Q and the standards of accounting measurement set forth in the Interim Reporting Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”). Consequently, the Company has not necessarily included in this Form 10-Q all information and footnotes required for audited financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements in this Form 10-Q contain all adjustments, consisting only of normal recurring adjustments, except as otherwise indicated, necessary for a fair statement of its financial position, results of operations, and cash flows of the Company for all periods presented. The results reported in these condensed consolidated financial statements should not be regarded as necessarily indicative of results that may be expected for any subsequent period or for the entire year. These unaudited condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and the notes thereto included in the Fiscal 2017 Form 10-K. Certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) have been condensed or omitted in the accompanying interim consolidated financial statements. The year-end condensed consolidated balance sheet data was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. The accompanying Consolidated Financial Statements include the accounts of the Company and its direct and indirect wholly owned subsidiaries, SafeStitch LLC, TransEnterix Surgical, Inc., TransEnterix International, Inc., TransEnterix Italia S.r.l., TransEnterix Europe S.Á.R.L; TransEnterix Asia Pte. Ltd.; TransEnterix Taiwan Ltd.; TransEnterix Japan KK and TransEnterix Israel Ltd. All inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include identifiable intangible assets and goodwill, contingent consideration, warrant liabilities, stock compensation expense, revenue recognition, restructuring and other charges, excess and obsolete inventory reserves, and deferred tax asset valuation allowances. |
Cash and Cash Equivalents and Restricted Cash | Cash and Cash Equivalents and Restricted Cash The Company considers all highly liquid investments with original maturities of 90 days or less at the time of purchase to be cash equivalents. Restricted cash at September 30, 2018 includes $663,000 in cash accounts held as collateral primarily under the terms of an office operating lease, credit cards and automobile leases. Restricted cash at December 31, 2017 includes $6.0 million in a money market account, held in connection with the Company’s notes payable and $389,000 in cash accounts held as collateral primarily under the terms of an office operating lease, credit card agreement and automobile leases. |
Short-term Investments | Short-term Investments Short-term investments are considered to be “ ” The Company reassesses the appropriateness of the classification of its investments at the end of each reporting period. The Company has determined that its debt securities should be classified as held-to-maturity as of September 30, 2018. This classification was based upon management ’ The Company reviews its short-term investments for other-than-temporary impairment if the cost exceeds the fair value. No such impairment was recorded as of September 30, 2018. |
Concentrations and Credit Risk | Concentrations and Credit Risk The Company’s principal financial instruments subject to potential concentration of credit risk are cash and cash equivalents, including amounts held in money market accounts. The Company places cash deposits with a federally insured financial institution. The Company maintains its cash at banks and financial institutions it considers to be of high credit quality; however, the Company’s cash deposits may at times exceed the FDIC insured limit. Balances in excess of federally insured limitations may not be insured. The Company has not experienced losses on these accounts, and management believes that the Company is not exposed to significant risks on such accounts. The Company’s accounts receivable are derived from net revenue to customers located throughout the world. The Company evaluates its customers’ financial condition and, generally, requires no collateral from its customers. The Company provides reserves for potential credit losses but has not experienced significant losses to date. The Company had four customers who accounted for 88% of the Company’s net accounts receivable at September 30, 2018 and one customer who constituted 88% of the Company’s net accounts receivable at December 31, 2017. The Company had five customers who accounted for 68% of the Company’s net revenue for the nine months ended September 30, 2018 and two customers who constituted 89% of the Company’s net revenue for the nine months ended September 30, 2017. The Company had four customers who accounted for 96% of the Company’s net revenue for the three months ended September 30, 2018 and five customers who constituted 100% of the Company’s net revenue for the three months ended September 30, 2017. |
Accounts Receivable | Accounts Receivable Accounts receivable are recorded at net realizable value, which includes an allowance for estimated uncollectable accounts. The allowance for uncollectible accounts was determined based on historical collection experience. |
Inventories | Inventories Inventories are stated at the lower of cost (determined on a first-in, first-out basis) or net realizable value. Inventory costs include direct materials, direct labor, and normal manufacturing overhead. The Company records reserves, when necessary, to reduce the carrying value of inventory to its net realizable value. Management considers forecast demand in relation to the inventory on hand, competitiveness of product offerings, market conditions and product life cycles when determining excess and obsolescence and net realizable value adjustments. At the point of loss recognition, a new, lower-cost basis for that inventory is established, and any subsequent improvements in facts and circumstances do not result in the restoration or increase in that newly established cost basis. |
Identifiable Intangible Assets and Goodwill | Identifiable Intangible Assets and Goodwill Identifiable intangible assets are recorded at cost, or when acquired as part of a business acquisition, at estimated fair value. Certain intangible assets are amortized over 5 to 10 years. Similar to tangible personal property and equipment, the Company periodically evaluates identifiable intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Intellectual property consists of purchased patent rights and developed technology acquired as part of a business acquisition. Amortization of the patent rights is recorded using the straight-line method over the estimated useful life of the patents of 10 years. Amortization of the developed technology is recorded using the straight-line method over the estimated useful life of 5 to 7 years. This method approximates the period over which the Company expects to receive the benefit from these assets. No impairment existed at September 30, 2018 or December 31, 2017. Indefinite-lived intangible assets, such as goodwill, are not amortized. The Company tests the carrying amounts of goodwill for recoverability on an annual basis at December 31 or when events or changes in circumstances indicate evidence a potential impairment exists, using a fair value based test. The Company continues to operate in one segment, which is considered to be the sole reporting unit and therefore, goodwill is tested for impairment at the enterprise level. No impairment existed at September 30, 2018 or December 31, 2017. |
In-Process Research and Development | In-Process Research and Development In-process research and development (“IPR&D”) assets represent the fair value assigned to technologies that were acquired, which at the time of acquisition have not reached technological feasibility and have no alternative future use. IPR&D assets are considered to be indefinite-lived until the completion or abandonment of the associated research and development projects. During the period that the IPR&D assets are considered indefinite-lived, they are tested for impairment on an annual basis, or more frequently if the Company becomes aware of any events occurring or changes in circumstances that indicate that the fair value of the IPR&D assets are less than their carrying amounts. If and when development is complete, which generally occurs upon regulatory approval, and the Company is able to commercialize products associated with the IPR&D assets, these assets are then deemed definite-lived and are amortized based on their estimated useful lives at that point in time. If development is terminated or abandoned, the Company may have a full or partial impairment charge related to the IPR&D assets, calculated as the excess of carrying value of the IPR&D assets over fair value. The IPR&D was acquired on September 21, 2015. On October 13, 2017, upon regulatory approval and the ability to commercialize the products associated with the IPR&D assets, the assets were deemed definite-lived, reclassified to intellectual property and are now amortized based on their estimated useful lives. |
Property and Equipment | Property and Equipment Property and equipment consists primarily of machinery, manufacturing equipment, demonstration equipment, computer equipment, furniture, and leasehold improvements, which are recorded at cost. Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Machinery, manufacturing and demonstration equipment 3-5 years Computer equipment 3 years Furniture 5 years Leasehold improvements Lesser Upon retirement or sale, the cost of assets disposed of and the related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is credited or charged to operations. Repairs and maintenance costs are expensed as incurred. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company reviews its long-lived assets for possible impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the assets. If such estimated cash flows are less than the carrying amount of the long-lived assets, then such assets are written down to their fair value. The Company’s estimates of anticipated cash flows and the remaining estimated useful lives of long-lived assets could be reduced in the future, resulting in a reduction to the carrying amount of long-lived assets. |
Contingent Consideration | Contingent Consideration Contingent consideration is recorded as a liability and is the estimate of the fair value of potential milestone payments related to business acquisitions. Contingent consideration is measured at fair value using a discounted cash flow model utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate associated with the risks of the expected cash flows attributable to the various milestones. Significant increases or decreases in any of the probabilities of success or changes in expected timelines for achievement of any of these milestones would result in a significantly higher or lower fair value of these milestones, respectively, and commensurate changes to the associated liability. The contingent consideration is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss. |
Deferred Gain from Sale of SurgiBot Assets | Deferred Gain from Sale of SurgiBot Assets In conjunction with the agreement with GBIL in relation to the transfer of the SurgiBot System assets, the Company received $7.5 million in December 2017. This amount was included in deferred gain from sale of SurgiBot assets in the consolidated balance sheet pending transfer of the assets in March 2018 and was recognized in gain from sale of SurgiBot assets in the consolidated statement of operations and comprehensive loss for the nine months ended September 30, 2018. |
Warrant Liabilities | Warrant Liabilities The Company’s Series B Warrants are measured at fair value using a simulation model which takes into account, as of the valuation date, factors including the current exercise price, the expected life of the warrant, the current price of the underlying stock, its expected volatility, holding cost and the risk-free interest rate for the term of the warrant (see Note 5). The warrant liability is revalued at each reporting period and changes in fair value are recognized in the consolidated statements of operations and comprehensive loss. The selection of the appropriate valuation model and the inputs and assumptions that are required to determine the valuation requires significant judgment and requires management to make estimates and assumptions that affect the reported amount of the related liability and reported amounts of the change in fair value. Actual results could differ from those estimates, and changes in these estimates are recorded when known. As the warrant liability is required to be measured at fair value at each reporting date, it is reasonably possible that these estimates and assumptions could change in the near term. |
Translation of Foreign Currencies | Translation of Foreign Currencies The functional currency of the Company’s operational foreign subsidiaries is Euros. The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at exchange rates in effect at the balance sheet date. Income and expense items are translated at the average exchange rates prevailing during the period. The cumulative translation effect for a subsidiary using a functional currency other than the U.S. dollar is included in accumulated other comprehensive income or loss as a separate component of stockholders’ equity. The Company’s intercompany accounts are denominated in the functional currency of the foreign subsidiary. Gains and losses resulting from the remeasurement of intercompany receivables that the Company considers to be of a long-term investment nature are recorded as a cumulative translation adjustment in accumulated other comprehensive income or loss as a separate component of stockholders’ equity, while gains and losses resulting from the remeasurement of intercompany receivables from a foreign subsidiary for which the Company anticipates settlement in the foreseeable future are recorded in the consolidated statement of operations and comprehensive loss. The net gains and losses included in net loss in the consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2018 and 2017 were not significant. |
Risk and Uncertainties | Risk and Uncertainties The Company is subject to a number of risks similar to other similarly-sized companies in the medical device industry. These risks include, without limitation, the historical lack of profitability; the Company’s ability to raise additional capital; its ability to successfully develop, clinically test and commercialize its products; the timing and outcome of the regulatory review process for its products; changes in the health care and regulatory environments of the United States, Italy, other countries in the European Union, and other countries in which the Company intends to operate; its ability to attract and retain key management, marketing and scientific personnel; competition from new entrants; its ability to successfully prepare, file, prosecute, maintain, defend and enforce patent claims and other intellectual property rights; its ability to successfully transition from a research and development company to a marketing, sales and distribution concern; competition in the market for robotic surgical devices; and its ability to identify and pursue development of additional products. |
Revenue Recognition | Revenue Recognition The Company adopted ASC Topic 606, Revenue from Contracts with Customers The Company's system sale arrangements generally contain multiple products and services. For these bundled sale arrangements, the Company accounts for individual products and services as separate performance obligations if they are distinct, which is if a product or service is separately identifiable from other items in the bundled package, and if a customer can benefit from it on its own or with other resources that are readily available to the customer. The Company’s system sale arrangements include a combination of the following performance obligations: system(s), system components, instruments, accessories, and system service. The Company’s system sale arrangements generally include a five-year period of service. The first year of service is generally free and included in the system sale arrangement and the remaining four years are generally included at a stated service price. The Company considers the service terms in the arrangements that are legally enforceable to be performance obligations. Other than service, the Company generally satisfies all of the performance obligations up-front. System components, system accessories, instruments, accessories, and service are also sold on a standalone basis. The Company recognizes revenues as the performance obligations are satisfied by transferring control of the product or service to a customer. The Company generally recognizes revenue for the performance obligations as follows: • System sales. For systems and system components sold directly to end customers, revenue is recognized when the Company transfers control to the customer, which is generally at the point when acceptance occurs that indicates customer acknowledgment of delivery or installation, depending on the terms of the arrangement. For systems sold through distributors, for which distributors are responsible for installation, revenue is recognized generally at the time of shipment. The Company’s system arrangements generally do not provide a right of return. The systems are generally covered by a one-year warranty. Warranty costs were not material for the periods presented. • Instruments and accessories. Revenue from sales of instruments and accessories is recognized when control is transferred to the customers, which generally occurs at the time of shipment, but also occurs at the time of delivery depending on the customer arrangement. Accessory products include sterile drapes used to help ensure a sterile field during surgery, vision products such as replacement endoscopes, camera heads, light guides, and other items that facilitate use of the Senhance Surgical System. • Service. Service revenue is recognized ratably over the term of the service period as the customers benefit from the service throughout the service period. Revenue related to services performed on a time-and-materials basis is recognized when performed. For multiple-element arrangements, revenue is allocated to each performance obligation based on its relative standalone selling price. Standalone selling prices are based on observable prices at which the Company separately sells the products or services. Due to limited sales to date, standalone selling prices are not directly observable. The Company estimates the standalone selling price using the market assessment approach considering market conditions and entity-specific factors including, but not limited to, features and functionality of the products and services, geographies, type of customer, and market conditions. The Company regularly reviews standalone selling prices and updates these estimates if necessary. The following table presents revenue disaggregated by types and geography: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in thousands) (in thousands) (unaudited) (unaudited) U.S. Systems $ 868 $ — $ 1,742 $ — Instruments and accessories 426 — 835 — Services 87 — 137 — Total U.S. revenue 1,381 — 2,714 — Outside of U.S. ("OUS") Systems 3,450 — 10,686 2,609 Instruments and accessories 441 10 2,653 683 Services 150 173 525 421 Total OUS revenue 4,041 183 13,864 3,713 Total Systems 4,318 — 12,428 2,609 Instruments and accessories 867 10 3,488 683 Services 237 173 662 421 Total revenue $ 5,422 $ 183 $ 16,578 $ 3,713 The Company recognizes sales by geographic area based on the country in which the customer is based. Transaction price allocated to remaining performance obligations relates to amounts allocated to products and services for which the revenue has not yet been recognized. A significant portion of this amount relates to service obligations performed under the Company's system sales contracts that will be invoiced and recognized as revenue in future periods. Transaction price allocated to remaining performance obligations was approximately $4.4 million as of September 30, 2018. The Company invoices its customers based on the billing schedules in its sales arrangements. Contract assets for the periods presented primarily represent the difference between the revenue that was recognized based on the relative selling price of the related performance obligations and the contractual billing terms in the arrangements. Contract assets are included in accounts receivable and totaled $0.1 million and $0 as of September 30, 2018 and 2017, respectively. Deferred revenue for the periods presented was primarily related to service obligations, for which the service fees are billed up-front, generally annually. The associated deferred revenue is generally recognized ratably over the service period. The Company did not have any significant impairment losses on its contract assets for the periods presented. Revenue recognized for the nine months ended September 30, 2018 and 2017, that was included in the deferred revenue balance at the beginning of each reporting period was $0.3 million and $0.2 million, respectively. In connection with assets recognized from the costs to obtain a contract with a customer, the Company determined that the sales incentive programs for its sales team do not meet the requirements to be capitalized as the Company does not expect to generate future economic benefits from the related revenue from the initial sales transaction. |
Cost of Revenue | Cost of Revenue Cost of revenue consists of contract manufacturing, materials, labor and manufacturing overhead incurred internally to produce the products. Shipping and handling costs incurred by the Company are included in cost of revenue. |
Research and Development Costs | Research and Development Costs Research and development expenses primarily consist of engineering, product development and regulatory expenses, incurred in the design, development, testing and enhancement of our products. Research and development costs are expensed as incurred. |
Stock-Based Compensation | Stock-Based Compensation The Company follows ASC 718 “Stock Compensation” and ASC 505-50 “Equity-Based Payments to Non-employees”, which provide guidance in accounting for share-based awards exchanged for services rendered and requires companies to expense the estimated fair value of these awards over the requisite service period. For awards granted to non-employees, the Company determines the fair value of the stock-based compensation awards granted as either the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. If the fair value of the equity instruments issued is used, it is measured using the stock price and other measurement assumptions as of the earlier of either (1) the date at which a commitment for performance by the counterparty to earn the equity instruments is reached, or (2) the date at which the counterparty’s performance is complete. The Company recognizes compensation expense for stock-based awards based on estimated fair values on the date of grant for awards granted to employees. The Company uses the Black-Scholes-Merton option pricing model to determine the fair value of stock options. The fair value of restricted stock units is determined by the market price of the Company’s common stock on the date of grant. The expense associated with stock-based compensation is recognized on a straight-line basis over the requisite service period of each award. The Company records as expense the fair value of stock-based compensation awards, including stock options and restricted stock units. Compensation expense for stock-based compensation was approximately $6,694,000 and $5,321,000 for the nine months ended September 30, 2018 and 2017, respectively. The TransEnterix, Inc. 2007 Incentive Compensation Plan (the “Plan”) was originally approved by the Company’s board of directors, (the “Board”) and adopted by the majority of the Company’s stockholders on November 13, 2007. The Plan has been subsequently amended, and approved by stockholders, as required, to increase the number of shares available under the Plan and to make other changes. As of May 24, 2018, the date of the Company’s annual meeting of stockholders for 2018, the number of shares of common stock, par value $0.001 per share (the “Common Stock”), authorized under the Plan is 40,940,000. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method, which requires the recognition of deferred tax assets or liabilities for the temporary differences between financial reporting and tax basis of the Company’s assets and liabilities, and for tax carryforwards at enacted statutory rates in effect for the years in which the asset or liability is expected to be realized. The effect on deferred taxes of a change in tax rates is recognized in income during the period that includes the enactment date. In addition, valuation allowances are established when necessary to reduce deferred tax assets and liabilities to the amounts expected to be realized. On December 22, 2017, the Tax Cuts and Jobs Act (“Tax Legislation”) was enacted into law, which reduced the U.S. federal corporate income tax rate to 21% for tax years beginning after December 31, 2017. As a result of the newly enacted tax rate, the Company adjusted its U.S. deferred tax assets as of December 31, 2017, by applying the new 21% rate, which resulted in a decrease to the deferred tax assets and a corresponding decrease to the valuation allowance of approximately $36.1 million. The Tax Legislation also implements a territorial tax system. Under the territorial tax system, in general, the Company's foreign earnings will no longer be subject to tax in the U.S. As part of transition to the territorial tax system the Tax Legislation includes a mandatory deemed repatriation of all undistributed foreign earnings that are subject to a U.S. income tax. The Company estimates that the deemed repatriation will not result in any additional U.S. income tax liability as it estimates it currently has no undistributed foreign earnings. In accordance with Staff Accounting Bulletin (“SAB”) No. 118, income tax effects of the Tax Legislation may be refined upon obtaining, preparing, or analyzing additional information during a measurement period of one year. During the measurement period provisional amounts may be adjusted for the effects, if any, of interpretive guidance issued after December 31, 2017, by U.S. regulatory and standard-setting bodies. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. |
Segments | Segments The Company operates in one business segment—the research, development and sale of medical device robotics to improve minimally invasive surgery. The Company’s chief operating decision maker (determined to be the Chief Executive Officer) does not manage any part of the Company separately, and the allocation of resources and assessment of performance are based on the Company’s consolidated operating results. Approximately 60% of the Company’s total consolidated assets are located within the U.S. as of September 30, 2018 and December 31, 2017. The remaining assets are mostly located in Europe and are primarily related to the Company’s facility in Italy, and include goodwill, intellectual property, other current assets, property and equipment, cash, accounts receivable and inventory of $91.8 million and $99.9 million at September 30, 2018 and December 31, 2017, respectively. Total assets outside of the U.S. excluding goodwill amounted to 31% of total consolidated assets at September 30, 2018 and December 31, 2017. The Company recognizes sales by geographic area based on the country in which the customer is based. For the nine months ended September 30, 2018, 16% of net revenue was generated in the U.S. and 83% was generated in Europe. For the nine months ended September 30, 2017, 62% of net revenue was generated in Europe and 38% in Asia. |
Impact of Recently Issued Accounting Standards | Impact of Recently Issued Accounting Standards In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement. assessing this ASU and has In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718), Improvements to Nonemployee Share-based Payments assessing this ASU and has In July 2017, the FASB Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception The adoption of this ASU should not have a material impact on the consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230) In February 2016, the FASB issued ASU 2016-02, Leases In July 2018, the FASB issued ASU 2018-10, which provides narrow-scope improvements to the lease standard. We expect to elect the ‘package of practical expedients’, which permits us to forgo reassessment of our prior conclusions about lease identification, lease classification and initial direct costs for leases entered into prior to the effective date. Additionally, we expect to elect the practical expedient to not provide comparative reporting periods; therefore, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. We do not expect to elect the ‘use-of-hindsight practical expedient’ or the land easement transition relief, the latter of which is not applicable to our industry. Upon adoption, operating leases will be reported on the statement of financial position as gross-up assets and liabilities. The Company has begun evaluating and planning for adoption and implementation of this ASU, including reviewing all material leases, the ASU practical expedient guidelines and current accounting policy elections, and assessing the overall financial statement impact. We expect this ASU will have a material impact on the Company’s financial position. The impact on the Company’s results of operations is currently being evaluated. The impact of this ASU is non-cash in nature and is not expected to affect the Company’s cash flows. In February 2017, the FASB issued ASU No. 2017-05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20) — Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets The adoption of this ASU did not have an impact on the consolidated financial statements. The Company adopted the New Revenue Standard in the first quarter of fiscal year 2018 using the modified retrospective method resulting in a cumulative catch-up adjustment to opening retained earnings. The Company applied the New Revenue Standard to all contracts and concluded that the timing and measurement of revenue recognition is materially consistent under the New Revenue Standard, except for the future billings related to future service included in its multi-year contracts that should be part of the consideration allocated to all performance obligations under the New Revenue Standard. Under the prior standard, future service billings were considered to be contingent revenue, and therefore, were not included in the consideration allocated. Accordingly, the amount of consideration allocated to the performance obligations identified in the Company’s system arrangements is different under the New Revenue Standard than the amount allocated under the prior standard. In general, this will result in an acceleration of the amount of revenue recognized for system sales with multi-year service contracts. Due to limited sales to date, the Company recorded a $11,000 cumulative catch-up adjustment to retained earnings in the first quarter of fiscal year 2018, offset by reductions in accounts receivable of $4,000 and deferred revenue of $15,000. Under the prior standard, revenue would have been $15,000 greater for the nine months ended September 30, 2018 than under the New Revenue Standard. |
Reclassifications | Reclassifications Certain prior year amounts within the consolidated statement of operations and comprehensive loss have been reclassified. Such reclassifications have no effect on previously recorded net loss. |
Classification of Certain Items Within the Company's Form 10-K | Classification of Certain Items Within the Company’s Form 10-K Certain reclassifications of prior period amounts will be made within the Company’s Form 10-K filing for the year ended December 31, 2018 to conform to current period presentation. Specifically, during the nine months ended September 30, 2018, the Company determined that the amount related to the deferred gain on sale of SurgiBot assets as reflected within one line in the operating activities section of the consolidated statement of cash flows for the year ended December 31, 2017 should have been classified as cash flows provided from investing activities. There is no impact to the consolidated statements of operations or consolidated balance sheets. The Company evaluated the effect of this misclassification and concluded it was not material to any of its previously issued consolidated financial statements. Upon revision, cash flows from operating activities for the year ended December 31, 2017, will decrease by $7.5 million to cash and cash equivalents used in operating activities of $47.3 million and cash flows from investing activities will increase by $7.5 million to cash and cash equivalents provided by investing activities of $5.5 million. There is no impact of the reclassification to the nine months ended September 30, 2017. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Estimated Lives of Assets | Depreciation is recorded using the straight-line method over the estimated useful lives of the assets as follows: Machinery, manufacturing and demonstration equipment 3-5 years Computer equipment 3 years Furniture 5 years Leasehold improvements Lesser |
Summary of Revenue Disaggregated by Types and Geography | The following table presents revenue disaggregated by types and geography: Three Months Ended Nine Months Ended September 30, September 30, 2018 2017 2018 2017 (in thousands) (in thousands) (unaudited) (unaudited) U.S. Systems $ 868 $ — $ 1,742 $ — Instruments and accessories 426 — 835 — Services 87 — 137 — Total U.S. revenue 1,381 — 2,714 — Outside of U.S. ("OUS") Systems 3,450 — 10,686 2,609 Instruments and accessories 441 10 2,653 683 Services 150 173 525 421 Total OUS revenue 4,041 183 13,864 3,713 Total Systems 4,318 — 12,428 2,609 Instruments and accessories 867 10 3,488 683 Services 237 173 662 421 Total revenue $ 5,422 $ 183 $ 16,578 $ 3,713 |
Cash, Cash Equivalents, and R_2
Cash, Cash Equivalents, and Restricted Cash (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | |
Summary of Cash, Cash Equivalents and Restricted Cash | Cash, cash equivalents and restricted cash consist of the following: September 30, December 31, 2018 2017 (In thousands) (unaudited) Cash $ 6,987 $ 4,039 Money market 34,761 87,178 Total cash and cash equivalents $ 41,748 $ 91,217 Restricted cash $ 663 $ 6,389 Total $ 42,411 $ 97,606 |
Fair Value (Tables)
Fair Value (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Measurements Disclosure [Line Items] | |
Summary of Assets Measured at Fair Value on Recurring Basis | The following are the major categories of assets measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017, using quoted prices in active markets for identical assets (Level 1); significant other observable inputs (Level 2); and significant unobservable inputs (Level 3): September 30, 2018 (In thousands) (unaudited) Description Quoted Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets measured at fair value Cash and cash equivalents $ 41,748 $ — $ — $ 41,748 Restricted cash 663 — — 663 Total Assets measured at fair value $ 42,411 $ — $ — $ 42,411 Liabilities measured at fair value Contingent consideration $ — $ — $ 12,104 $ 12,104 Warrant liabilities — — 15,044 15,044 Total liabilities measured at fair value $ — $ — $ 27,148 $ 27,148 December 31, 2017 (In thousands) Description Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets measured at fair value Cash and cash equivalents $ 91,217 $ — $ — $ 91,217 Restricted cash 6,389 — — 6,389 Total Assets measured at fair value $ 97,606 $ — $ — $ 97,606 Liabilities measured at fair value Contingent consideration $ — $ — $ 12,418 $ 12,418 Warrant liabilities — — 14,090 14,090 Total liabilities measured at fair value $ — $ — $ 26,508 $ 26,508 |
Change in Fair Value for All Assets and Liabilities Using Unobservable Level 3 Inputs As Determined By Level 3 Inputs | The following table summarizes the change in fair value, as determined by Level 3 inputs, for all assets and liabilities using unobservable Level 3 inputs for the nine months ended September 30, 2018: Fair Value Measurement Reporting Date (Level 3) (In thousands) (unaudited) Common stock Contingent warrants consideration Balance at December 31, 2017 $ 14,090 $ 12,418 Exercise of warrants (23,484 ) — Change in fair value 24,438 81 Payment for contingent consideration — (395 ) Balance at September 30, 2018 $ 15,044 $ 12,104 Current portion — 555 Long-term portion 15,044 11,549 Balance at September 30, 2018 $ 15,044 $ 12,104 |
Level 3 [Member] | |
Fair Value Measurements Disclosure [Line Items] | |
Quantitative Information about Inputs and Valuation Methodologies Used for Fair Value Measurements Classification | The following table presents quantitative information about the inputs and valuation methodologies used for the Company’s fair value measurements classified in Level 3, with the exception of the warrant liability, which is explained above as of September 30, 2018 and December 31, 2017: Valuation Methodology Significant Unobservable Input Weighted (range, if applicable) Contingent consideration Probability income approach Milestone dates 2018 to Discount rate Probability 9% to 12% 100% |
Series B Warrant [Member] | |
Fair Value Measurements Disclosure [Line Items] | |
Quantitative Information about Inputs and Valuation Methodologies Used for Fair Value Measurements Classification | The following table presents the inputs and valuation methodologies used for the Company’s fair value of the Series B warrants: April 28, 2017 Series B September 30, 2018 December 31, 2017 (date of issuance) Fair value $15.0 million $14.1 million $6.2 million Valuation methodology Monte Carlo Monte Carlo Black-Scholes Merton Term 3.58 years 4.33 years 5 years Risk free rate 2.90% 2.13% 1.81% Dividends — — — Volatility 89.47% 80.60% 73.14% Share price $ 5.80 $ 1.93 $ 0.65 Probability of additional financing 100% in 2019 25% in 2018 and 75% in 2019 Not Applicable |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Summary of Accounts Receivable | The following table presents the components of accounts receivable: September 30, December 31, 2018 2017 (In thousands) (unaudited) Gross accounts receivable $ 5,742 $ 1,609 Allowance for uncollectible accounts (73 ) (73 ) Total accounts receivable, net $ 5,669 $ 1,536 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | The components of inventories are as follows: September 30, December 31, 2018 2017 (In thousands) (unaudited) Finished goods $ 4,212 $ 4,432 Raw materials 6,030 6,385 Total inventories $ 10,242 $ 10,817 |
Other Current Assets (Tables)
Other Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | The following table presents the components of other current assets: September 30, December 31, 2018 2017 (In thousands) (unaudited) Advances to vendors $ 6,406 $ 6,403 Prepaid expenses 2,540 1,519 Other receivables 93 1,422 Total $ 9,039 $ 9,344 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following: September 30, December 31, 2018 2017 (In thousands) (unaudited) Machinery, manufacturing and demonstration equipment $ 12,095 $ 10,866 Computer equipment 2,260 2,187 Furniture 628 598 Leasehold improvements 2,273 2,237 Total property and equipment 17,256 15,888 Accumulated depreciation and amortization (10,597 ) (9,218 ) Property and equipment, net $ 6,659 $ 6,670 |
Goodwill, In-Process Research_2
Goodwill, In-Process Research and Development and Intellectual Property (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Carrying Value of Goodwill and Change in Balance | The carrying value of goodwill and the change in the balance for the nine months ended September 30, 2018 is as follows: Goodwill (In (unaudited) Balance at December 31, 2017 $ 71,368 Foreign currency translation impact (699 ) Balance at September 30, 2018 $ 70,669 |
Carrying Value of Company's Intangible Assets and Change in Balance | The components of gross intellectual property, accumulated amortization, and net intellectual property as of September 30, 2018 and December 31, 2017 are as follows: September 30, 2018 December 31, 2017 (In thousands) (In thousands) (unaudited) Gross Carrying Amount Accumulated Amortization Foreign currency translation impact Net Carrying Amount Gross Carrying Amount Accumulated Amortization Foreign currency translation impact Net Carrying Amount Developed technology 66,413 (27,936 ) 4,074 42,551 66,413 (19,724 ) 5,529 52,218 Technology and patents purchased 400 (62 ) 36 374 400 (30 ) 50 420 Total intellectual property $ 66,813 $ (27,998 ) $ 4,110 $ 42,925 $ 66,813 $ (19,754 ) $ 5,579 $ 52,638 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accrued Liabilities Current [Abstract] | |
Schedule of Accrued Expenses | The following table presents the components of accrued expenses: September 30, December 31, 2018 2017 (In thousands) (unaudited) Compensation and benefits $ 4,975 $ 4,533 Other 814 504 Deferred rent 437 595 Legal and professional fees 400 386 Consulting and other vendors 299 1,414 Taxes and other assessments 190 3,192 Interest 159 309 Royalties 158 41 Total $ 7,432 $ 10,974 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Summary of Change in Warrant | The following table summarizes the change in warrants for the nine months ended September 30, 2018: Weighted Weighted Average Weighted Average Remaining Average Number of Exercise Contractual Grant Date Warrants Price Life (in years) Fair Value Outstanding at December 31, 2017 13,162,668 $ 1.08 4.5 $ 0.39 Exercised (8,562,631 ) 1.09 — — Cancelled (95,600 ) 1.65 — — Outstanding at September 30, 2018 4,504,437 1.03 4.0 $ 0.26 |
Purchase Agreement, Controlle_2
Purchase Agreement, Controlled Equity Offering and Public Offering of Common Stock (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Purchase Agreement Controlled Equity Offering And Public Offering Of Common Stock [Abstract] | |
Schedule of Total Sales under 2017 Sales Agreement | The following table summarizes the total sales under the 2017 Sales Agreement for the periods indicated (in thousands, except per share amounts): 2017 Sales Agreement Year Ended December 31, 2017 Total shares of common stock sold 15,998.5 Average price per share $ 3.13 Gross proceeds $ 50,000 Commissions earned by Stifel $ 1,500 Other issuance costs $ 97 |
Organization and Capitalizati_2
Organization and Capitalization - Additional Information (Detail) - USD ($) | Dec. 18, 2017 | Dec. 31, 2017 | Mar. 31, 2018 | Sep. 30, 2018 | Dec. 06, 2013 |
Organization And Capitalization [Line Items] | |||||
Common stock, shares authorized | 750,000,000 | 750,000,000 | |||
Preferred stock, shares authorized | 25,000,000 | ||||
Preferred stock, par value (in dollars per share) | $ 0.01 | ||||
Minimum [Member] | |||||
Organization And Capitalization [Line Items] | |||||
Common stock, shares authorized | 225,000,000 | ||||
Maximum [Member] | |||||
Organization And Capitalization [Line Items] | |||||
Common stock, shares authorized | 750,000,000 | ||||
China National Scientific and Instruments and Materials Company [Member] | |||||
Organization And Capitalization [Line Items] | |||||
Proceeds from distribution agreement | $ 7,500,000 | ||||
Proceeds from distribution agreement including equity investment | $ 7,500,000 | ||||
Distribution agreement, equity investment | $ 3,000,000 | ||||
Distribution agreement, equity investment per share | $ 2.33 | ||||
Distribution minimum royalties payment | $ 14,000,000 | ||||
Distribution minimum royalties payment term | 5 years | ||||
China National Scientific and Instruments and Materials Company [Member] | Minimum [Member] | |||||
Organization And Capitalization [Line Items] | |||||
Expected proceeds from distribution agreement | $ 29,000,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2018USD ($)$ / shares | Mar. 31, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)Segment$ / shares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)$ / shares | May 24, 2018$ / sharesshares | |
Accounting Policies [Line Items] | |||||||
Short-term investments | $ 39,670,000 | $ 39,670,000 | |||||
Impairment charges | $ 0 | $ 0 | |||||
Deferred gain from sale of SurgiBot assets | $ 7,500,000 | ||||||
Period of service sale arrangement | 5 years | ||||||
Period of service sale arrangement at stated service price | 4 years | ||||||
Product warranty | 1 year | ||||||
Revenue, remaining performance obligation | 4,400,000 | $ 4,400,000 | |||||
Contract assets included in accounts receivable | $ 100,000 | $ 0 | 100,000 | $ 0 | |||
Revenue recognized, included in deferred revenue | $ 300,000 | 200,000 | |||||
Common stock, capital shares authorized for issuance | shares | 40,940,000 | ||||||
Common stock, par value | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||
Statutory income tax rate | 21.00% | ||||||
Decrease in deferred tax assets due to newly enacted tax rate | $ 36,100,000 | ||||||
Decrease in valuation allowance due to newly enacted tax rate | 36,100,000 | ||||||
Tax cuts and jobs act of 2017, measurement period | 1 year | ||||||
Number of business segments | Segment | 1 | ||||||
Assets | $ 227,559,000 | $ 227,559,000 | 250,251,000 | ||||
Cumulative catch-up adjustment to retained earnings | 11,000 | ||||||
Reductions in accounts receivable | (4,262,000) | 886,000 | |||||
Cash and cash equivalents used in operating activities | (35,641,000) | (37,549,000) | 47,300,000 | ||||
Cash and cash equivalents provided by investing activities | (35,581,000) | (1,906,000) | 5,500,000 | ||||
Restatement Adjustment [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Cash and cash equivalents used in operating activities | (7,500,000) | ||||||
Cash and cash equivalents provided by investing activities | $ 7,500,000 | ||||||
ASU 2014-09 [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Cumulative catch-up adjustment to retained earnings | $ 11,000 | ||||||
Reductions in accounts receivable | 4,000 | ||||||
Deferred revenue | $ 15,000 | ||||||
ASU 2014-09 [Member] | Prior Standard, Revenue [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Deferred revenue | $ 15,000 | $ 15,000 | |||||
U.S. [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Percentage of total consolidated assets | 60.00% | 60.00% | 60.00% | ||||
Europe [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Assets | $ 91,800,000 | $ 91,800,000 | $ 99,900,000 | ||||
International [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Percentage of total consolidated assets, excluding goodwill | 31.00% | 31.00% | 31.00% | ||||
Stock Options [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Share based compensation, expense recognized | $ 6,694,000 | $ 5,321,000 | |||||
Patents [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Amortization period | 10 years | ||||||
Minimum [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Amortization period | 5 years | ||||||
Minimum [Member] | Developed Technology [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Amortization period | 5 years | ||||||
Maximum [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Amortization period | 10 years | ||||||
Maximum [Member] | Developed Technology [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Amortization period | 7 years | ||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | Four Customer [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 88.00% | ||||||
Customer Concentration Risk [Member] | Accounts Receivable [Member] | One Customer [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 88.00% | ||||||
Customer Concentration Risk [Member] | Sales [Member] | Four Customer [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 96.00% | ||||||
Customer Concentration Risk [Member] | Sales [Member] | Five Customer [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 100.00% | 68.00% | |||||
Customer Concentration Risk [Member] | Sales [Member] | Two Customer [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 89.00% | ||||||
Geographic Concentration Risk [Member] | Sales [Member] | U.S. [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 16.00% | ||||||
Geographic Concentration Risk [Member] | Sales [Member] | Europe [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 83.00% | 62.00% | |||||
Geographic Concentration Risk [Member] | Sales [Member] | Asia [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Concentration Risk Percentage | 38.00% | ||||||
U.S. Government Securities [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Short-term investments | $ 39,700,000 | $ 39,700,000 | $ 0 | ||||
Short-term investments, other-than-temporary impairment | 0 | ||||||
Held In Cash Money Market Account [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Restricted cash | 6,000,000 | ||||||
Held In Cash Collateral Accounts [Member] | |||||||
Accounting Policies [Line Items] | |||||||
Restricted cash | $ 663,000 | $ 663,000 | $ 389,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Estimated Lives of Assets (Detail) | 9 Months Ended |
Sep. 30, 2018 | |
Computer Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Furniture [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | Lesser of lease term or 3 to 10 years |
Minimum [Member] | Machinery, Manufacturing Equipment and Demonstration Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Minimum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 3 years |
Maximum [Member] | Machinery, Manufacturing Equipment and Demonstration Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 5 years |
Maximum [Member] | Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property and equipment, estimated useful lives | 10 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Revenue Disaggregated by Types and Geography (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 5,422 | $ 183 | $ 16,578 | $ 3,713 |
Services [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 237 | 173 | 662 | 421 |
Systems [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 4,318 | 12,428 | 2,609 | |
Instruments and Accessories [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 867 | 10 | 3,488 | 683 |
U.S. [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 1,381 | 2,714 | ||
U.S. [Member] | Services [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 87 | 137 | ||
U.S. [Member] | Systems [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 868 | 1,742 | ||
U.S. [Member] | Instruments and Accessories [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 426 | 835 | ||
Outside of U.S. [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 4,041 | 183 | 13,864 | 3,713 |
Outside of U.S. [Member] | Services [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 150 | 173 | 525 | 421 |
Outside of U.S. [Member] | Systems [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | 3,450 | 10,686 | 2,609 | |
Outside of U.S. [Member] | Instruments and Accessories [Member] | ||||
Disaggregation Of Revenue [Line Items] | ||||
Total revenue | $ 441 | $ 10 | $ 2,653 | $ 683 |
Acquisition of Senhance Surgi_2
Acquisition of Senhance Surgical Robotic System - Additional Information (Detail) - Senhance Surgical Robotic System Acquisition [Member] | Dec. 30, 2016EUR (€)shares | Sep. 21, 2015USD ($)shares | Sep. 30, 2018EUR (€) | Dec. 31, 2016USD ($) | Sep. 21, 2015EUR (€) |
Business Acquisition [Line Items] | |||||
Common shares issued | shares | 15,543,413 | ||||
First Tranche [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ | $ 25,000,000 | ||||
Second Tranche [Member] | |||||
Business Acquisition [Line Items] | |||||
Common shares issued | shares | 3,722,685 | ||||
Aggregate fair market value | € 5,000,000 | ||||
Aggregate fair market value payment | € 5,000,000 | ||||
Second Tranche [Member] | Lincoln Park Capital Fund, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Gross proceeds from financing | $ | $ 50,000,000 | ||||
Interest rate | 9.00% | ||||
Second Tranche [Member] | Minimum [Member] | Lincoln Park Capital Fund, LLC [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash on hand | $ | $ 50,000,000 | ||||
Third Tranche [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration payable | € 15,000,000 | ||||
Third Tranche [Member] | Minimum [Member] | |||||
Business Acquisition [Line Items] | |||||
Target revenue to be achieved | 25,000,000 | ||||
Fourth Tranche [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | € 2,100,000 | ||||
Cash consideration payable | 2,500,000 | ||||
U.S. Dollars [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration | $ | $ 25,000,000 | ||||
Euro [Member] | |||||
Business Acquisition [Line Items] | |||||
Cash consideration payable | € 27,500,000 |
Cash, Cash Equivalents, and R_3
Cash, Cash Equivalents, and Restricted Cash - Summary of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Cash Cash Equivalents Restricted Cash And Restricted Cash Equivalents [Abstract] | ||||
Cash | $ 6,987 | $ 4,039 | ||
Money market | 34,761 | 87,178 | ||
Total cash and cash equivalents | 41,748 | 91,217 | ||
Restricted cash | 663 | 6,389 | ||
Total | $ 42,411 | $ 97,606 | $ 30,869 | $ 34,590 |
Cash, Cash Equivalents, and R_4
Cash, Cash Equivalents, and Restricted Cash - Additional Information (Detail) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 |
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 663,000 | $ 6,389,000 |
Held In Cash Money Market Account [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Restricted cash | 6,000,000 | |
Held In Cash Collateral Accounts [Member] | ||
Restricted Cash And Cash Equivalents Items [Line Items] | ||
Restricted cash | $ 663,000 | $ 389,000 |
Fair Value - Additional Informa
Fair Value - Additional Information (Detail) | Apr. 28, 2017USD ($)$ / sharesshares | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($)$ / shares | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)$ / shares |
Fair Value Measurements Disclosure [Line Items] | ||||||
Transfers of assets between Level 1, Level 2, and Level 3 of the fair value hierarchy | $ 0 | $ 0 | $ 0 | |||
Transfers of liabilities between Level 1, Level 2, and Level 3 of the fair value hierarchy | 0 | 0 | 0 | |||
Warrants to purchase common shares | shares | 24,900,000 | |||||
Offering price | $ / shares | $ 1 | |||||
Change in fair value of warrant liabilities | 8,760,000 | $ 22,887,000 | 24,438,000 | $ 25,213,000 | ||
Series A Warrant [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Warrants, exercise price | $ / shares | $ 1 | |||||
Warrant expiration date | Oct. 31, 2017 | |||||
Series A Warrant [Member] | Black-Scholes Merton Model [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Estimated fair value of warrants | $ 2,500,000 | |||||
Fair value input, share price | $ / shares | $ 0.65 | |||||
Series A Warrant [Member] | Black-Scholes Merton Model [Member] | Measurement Input, Expected Term [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, term | 1 year | |||||
Series A Warrant [Member] | Black-Scholes Merton Model [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, risk free rate | 0.0107 | |||||
Series A Warrant [Member] | Black-Scholes Merton Model [Member] | Measurement Input, Expected Dividend Payment [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, risk free rate | 0 | |||||
Series A Warrant [Member] | Black-Scholes Merton Model [Member] | Measurement Input, Price Volatility [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, risk free rate | 0.7314 | |||||
Series B Warrant [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Warrants, exercise price | $ / shares | $ 1 | |||||
Estimated fair value of warrants | $ 6,200,000 | $ 15,000,000 | $ 15,000,000 | $ 14,100,000 | ||
Fair value input, share price | $ / shares | $ 0.65 | $ 5.80 | $ 5.80 | $ 1.93 | ||
Series B Warrant [Member] | Measurement Input, Expected Term [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, term | 5 years | 3 years 6 months 29 days | 3 years 6 months 29 days | 4 years 3 months 29 days | ||
Series B Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, risk free rate | 1.81 | 2.90 | 2.90 | 2.13 | ||
Series B Warrant [Member] | Measurement Input, Price Volatility [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value input, risk free rate | 73.14 | 89.47 | 89.47 | 80.60 | ||
Common Stock [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Number of common stock or warrants in each unit | shares | 1 | |||||
Common Stock [Member] | Series A Warrant [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Number of common stock or warrants in each unit | shares | 1 | |||||
Common Stock [Member] | Series B Warrant [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Number of common stock or warrants in each unit | shares | 0.75 | |||||
Senhance Surgical Robotic System Acquisition [Member] | ||||||
Fair Value Measurements Disclosure [Line Items] | ||||||
Fair value of contingent consideration | $ 100,000 | $ 1,200,000 |
Fair Value - Summary of Assets
Fair Value - Summary of Assets Measured at Fair Value on Recurring Basis (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Assets measured at fair value | ||
Cash and cash equivalents | $ 41,748 | $ 91,217 |
Restricted cash | 663 | 6,389 |
Total Assets measured at fair value | 42,411 | 97,606 |
Liabilities measured at fair value | ||
Contingent consideration | 12,104 | 12,418 |
Warrant liabilities | 15,044 | 14,090 |
Total liabilities measured at fair value | 27,148 | 26,508 |
Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | ||
Assets measured at fair value | ||
Cash and cash equivalents | 41,748 | 91,217 |
Restricted cash | 663 | 6,389 |
Total Assets measured at fair value | 42,411 | 97,606 |
Significant Unobservable Inputs (Level 3) [Member] | ||
Liabilities measured at fair value | ||
Contingent consideration | 12,104 | 12,418 |
Warrant liabilities | 15,044 | 14,090 |
Total liabilities measured at fair value | $ 27,148 | $ 26,508 |
Fair Value - Quantitative Infor
Fair Value - Quantitative Information about Inputs and Valuation Methodologies Used for Fair Value Measurements Classification (Detail) $ / shares in Units, $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2018USD ($)$ / shares | Dec. 31, 2017USD ($)$ / shares | Apr. 28, 2017USD ($)$ / shares | |
Senhance Surgical Robotic System Acquisition [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Probability of occurrence | 100.00% | ||
Senhance Surgical Robotic System Acquisition [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration [Member] | Minimum [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Milestone dates | 2,018 | ||
Senhance Surgical Robotic System Acquisition [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration [Member] | Maximum [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Milestone dates | 2,021 | ||
Measurement Input, Discount Rate [Member] | Senhance Surgical Robotic System Acquisition [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration [Member] | Minimum [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Discount rate | 0.09 | ||
Measurement Input, Discount Rate [Member] | Senhance Surgical Robotic System Acquisition [Member] | Significant Unobservable Inputs (Level 3) [Member] | Contingent Consideration [Member] | Maximum [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Discount rate | 0.12 | ||
Series B Warrant [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Fair value | $ | $ 15 | $ 14.1 | $ 6.2 |
Valuation methodology | trxc:MonteCarloMember | trxc:MonteCarloMember | trxc:BlackScholesMertonMember |
Share price | $ / shares | $ 5.80 | $ 1.93 | $ 0.65 |
Probability of additional financing in 2018 | 25.00% | ||
Probability of additional financing in 2019 | 100.00% | 75.00% | |
Series B Warrant [Member] | Measurement Input, Expected Term [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Term | 3 years 6 months 29 days | 4 years 3 months 29 days | 5 years |
Series B Warrant [Member] | Measurement Input, Risk Free Interest Rate [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Risk free rate | 2.90 | 2.13 | 1.81 |
Series B Warrant [Member] | Measurement Input, Price Volatility [Member] | |||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | |||
Risk free rate | 89.47 | 80.60 | 73.14 |
Fair Value - Change in Fair Val
Fair Value - Change in Fair Value for All Assets and Liabilities Using Unobservable Level 3 Inputs As Determined By Level 3 Inputs (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Common Stock Warrants [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning balance | $ 14,090 |
Exercise of warrants | (23,484) |
Change in fair value | 24,438 |
Long-term portion | 15,044 |
Ending balance | 15,044 |
Contingent Consideration [Member] | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | |
Beginning balance | 12,418 |
Change in fair value | 81 |
Current portion | 555 |
Long-term portion | 11,549 |
Payment for contingent consideration | (395) |
Ending balance | $ 12,104 |
Accounts Receivable, Net - Summ
Accounts Receivable, Net - Summary of Accounts Receivable (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Gross accounts receivable | $ 5,742 | $ 1,609 |
Allowance for uncollectible accounts | (73) | (73) |
Total accounts receivable, net | $ 5,669 | $ 1,536 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventory (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 4,212 | $ 4,432 |
Raw materials | 6,030 | 6,385 |
Total inventories | $ 10,242 | $ 10,817 |
Other Current Assets - Schedule
Other Current Assets - Schedule of Other Current Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Deferred Costs Capitalized Prepaid And Other Assets Disclosure [Abstract] | ||
Advances to vendors | $ 6,406 | $ 6,403 |
Prepaid expenses | 2,540 | 1,519 |
Other receivables | 93 | 1,422 |
Total | $ 9,039 | $ 9,344 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 17,256 | $ 15,888 |
Accumulated depreciation and amortization | (10,597) | (9,218) |
Property and equipment, net | 6,659 | 6,670 |
Machinery, Manufacturing and Demonstration Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 12,095 | 10,866 |
Computer Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 2,260 | 2,187 |
Furniture [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | 628 | 598 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, Gross | $ 2,273 | $ 2,237 |
Property and Equipment - Additi
Property and Equipment - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Property Plant And Equipment [Abstract] | ||
Depreciation | $ 1,876,000 | $ 1,816,000 |
Goodwill, In-Process Research_3
Goodwill, In-Process Research and Development and Intellectual Property - Additional Information (Detail) - USD ($) | Sep. 21, 2015 | Jun. 30, 2017 | Sep. 30, 2018 | Dec. 31, 2017 |
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill | $ 70,669,000 | $ 71,368,000 | ||
Accumulated impairment of goodwill | 61,800,000 | 61,800,000 | ||
Goodwill impairment | $ 0 | $ 0 | $ 0 | |
In-Process Research and Development [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Discount rate | 45.00% | |||
Intellectual Property [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Discount rate | 45.00% | |||
Technology and Patents Purchased [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 8 years 7 months 6 days | 9 years 3 months 18 days | ||
Developed Technology [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Weighted average remaining useful life | 4 years | 4 years 9 months 18 days | ||
Safe Stitch Medical Inc [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill | $ 93,800,000 | |||
Senhance Surgical Robotic System Acquisition [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Goodwill | $ 38,300,000 | |||
Intellectual property | $ 48,500,000 | |||
Senhance Surgical Robotic System Acquisition [Member] | In-Process Research and Development [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
In-process research and development | $ 17,100,000 | |||
Senhance Surgical Robotic System Acquisition [Member] | Technology and Patents Purchased [Member] | ||||
Goodwill And Intangible Assets [Line Items] | ||||
Acquisition price | $ 400,000 |
Goodwill, In-Process Research_4
Goodwill, In-Process Research and Development and Intellectual Property - Carrying Value of Goodwill and Change in Balance (Detail) $ in Thousands | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 71,368 |
Foreign currency translation impact | (699) |
Ending balance | $ 70,669 |
Goodwill, In-Process Research_5
Goodwill, In-Process Research and Development and Intellectual Property - Summary of Gross Intellectual Property, Accumulated Amortization, and Net Intellectual Property (Detail) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Developed Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 66,413 | $ 66,413 |
Accumulated Amortization | (27,936) | (19,724) |
Foreign currency translation impact | 4,074 | 5,529 |
Net Carrying Amount | 42,551 | 52,218 |
Technology and Patents Purchased [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 400 | 400 |
Accumulated Amortization | (62) | (30) |
Foreign currency translation impact | 36 | 50 |
Net Carrying Amount | 374 | 420 |
Intellectual Property [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 66,813 | 66,813 |
Accumulated Amortization | (27,998) | (19,754) |
Foreign currency translation impact | 4,110 | 5,579 |
Net Carrying Amount | $ 42,925 | $ 52,638 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | Sep. 30, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Income Tax Contingency [Line Items] | |||
Estimates annual effective tax rate | 5.00% | ||
Deferred tax benefit | $ 2,572,000 | $ 2,320,000 | |
Effective tax rate | 4.40% | 3.30% | |
Unrecognized tax benefits that would affect effective tax rate | $ 0 | $ 0 | |
Accounting for the 2017 tax cuts and jobs act was complete | false | ||
Foreign Tax Authority [Member] | TransEnterix Italia [Member] | |||
Income Tax Contingency [Line Items] | |||
Net deferred tax asset | $ 0 | 0 | |
Valuation allowance | $ 0 | $ 0 |
Accrued Expenses - Schedule of
Accrued Expenses - Schedule of Accrued Expenses (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Accrued Liabilities Current [Abstract] | ||
Compensation and benefits | $ 4,975 | $ 4,533 |
Other | 814 | 504 |
Deferred rent | 437 | 595 |
Legal and professional fees | 400 | 386 |
Consulting and other vendors | 299 | 1,414 |
Taxes and other assessments | 190 | 3,192 |
Interest | 159 | 309 |
Royalties | 158 | 41 |
Total | $ 7,432 | $ 10,974 |
Notes Payable - Additional Info
Notes Payable - Additional Information (Detail) - USD ($) | May 23, 2018 | May 10, 2017 | Sep. 26, 2014 | May 31, 2018 | May 31, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Apr. 28, 2017 | Dec. 31, 2016 | Jan. 17, 2012 |
Debt Instrument [Line Items] | |||||||||||
Loss on Extinguishment of notes payable | $ (1,400,000) | $ (308,000) | |||||||||
Warrant expiration period | 7 years | ||||||||||
Issue of warrants to purchase shares of company's common stock | 24,900,000 | ||||||||||
Notes Payable [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt issuance costs paid to prior lenders and third parties | 371,000 | ||||||||||
Debt issuance cost | 280,000 | ||||||||||
Debt unamortized balance | $ 107,000 | ||||||||||
Notes Payable [Member] | Loss on Extinguishment of Notes Payable [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt unamortized balance | $ 63,000 | ||||||||||
Hercules Loan Agreement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt discount liability, facility fee recorded as debt discount | 287,000 | ||||||||||
Debt Instrument, redemption price amount | $ 680,000 | ||||||||||
Hercules Loan Agreement [Member] | Notes Payable [Member] | Interest Expense [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on Extinguishment of notes payable | $ (1,400,000) | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Note issuance date | May 23, 2018 | ||||||||||
Term loans aggregate principal amount | $ 40,000,000 | ||||||||||
Repayment of term loans period | 18 months | ||||||||||
Debt instrument amortization schedule | 18 months | ||||||||||
Debt instrument repayment term | The Company is entitled to make interest-only payments until December 1, 2020, and at the end the interest-only period, the Company will be required to repay the term loans over an eighteen-month period based on an eighteen-month amortization schedule, with a final maturity date of June 1, 2022. | ||||||||||
Interest only payment date | Dec. 1, 2020 | ||||||||||
Maturity date of the term loans | Jun. 1, 2022 | ||||||||||
Debt discount liability, facility fee recorded as debt discount | $ 400,000 | ||||||||||
Prepayment fee percentage | 6.95% | ||||||||||
Term loans payment terms | In addition, the Company is permitted to prepay the term loans in full at any time, with a prepayment fee of 3.0% of the outstanding principal amount of the loan in the first year after the Initial Funding Date, 2.0% if the prepayment occurs in the second year after the Initial Funding Date and 1.0% thereafter. Upon prepayment of the term loans in full or repayment of the terms loans at the maturity date or upon acceleration, the Company is required to pay a final fee of 6.95% of the aggregate principal amount of term loans funded. The final payment fee is accreted to interest expense over the life of the term loan and included within notes payable on the consolidated balance sheet. | ||||||||||
Percentage outstanding principal balance of term loans required to be maintained | 120.00% | ||||||||||
Percentage of maintained cash and investment property in accounts of aggregate cash of parent and subsidiaries | 80.00% | ||||||||||
Amount of investment to any future equity offering | $ 2,000,000 | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | Fixed Rate and Prime Rate [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loans interest rate | 5.00% | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loans fixed interest rate | 9.55% | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | First Year After Initial Funding Date [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Prepayment fee percentage | 3.00% | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | Second Year After Initial Funding Date [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Prepayment fee percentage | 2.00% | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | Second Year After Initial Funding Date And Thereafter [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Prepayment fee percentage | 1.00% | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | First Tranche [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loans aggregate principal amount | $ 20,000,000 | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | Second Tranche [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loans aggregate principal amount | 10,000,000 | ||||||||||
Hercules Loan Agreement [Member] | Term Loan [Member] | Third Tranche [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loans aggregate principal amount | $ 10,000,000 | ||||||||||
Term loans fixed interest rate | 9.20% | ||||||||||
Loan and Security Agreement [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt discount liability, facility fee recorded as debt discount | 255,000 | ||||||||||
Debt Instrument, redemption price amount | $ 1,300,000 | ||||||||||
Issue of warrants to purchase shares of company's common stock | 430,815 | ||||||||||
Loan and Security Agreement [Member] | Notes Payable [Member] | Interest Expense [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Loss on Extinguishment of notes payable | $ (308,000) | ||||||||||
Loan and Security Agreement [Member] | Term Loan [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt issuance costs recorded as debt discount | $ 1,200,000 | ||||||||||
Warrant expiration period | 5 years | ||||||||||
Loan and Security Agreement [Member] | Term Loan [Member] | Innovatus Life Sciences Lending Fund I, LP [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Note issuance date | May 10, 2017 | ||||||||||
Term loans aggregate principal amount | $ 17,000,000 | ||||||||||
Repayment of term loans period | 2 years | ||||||||||
Debt instrument amortization schedule | 24 months | ||||||||||
Maturity date of the term loans | May 10, 2021 | ||||||||||
Term loans fixed interest rate | 11.00% | ||||||||||
Term loans fixed interest rate, paid in-kind percentage | 2.50% | ||||||||||
Interest only payment period | 24 months | ||||||||||
Loan and Security Agreement [Member] | Term Loan [Member] | First Tranche [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt discount liability, facility fee recorded as debt discount | $ 170,000 | ||||||||||
Warrants, exercise price | $ 1 | ||||||||||
Estimated fair value of warrants | $ 300,000 | ||||||||||
Unamortized debt discount | $ 0 | $ 1,000,000 | |||||||||
Loan and Security Agreement [Member] | Term Loan [Member] | First Tranche [Member] | Innovatus Life Sciences Lending Fund I, LP [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Term loans aggregate principal amount | $ 14,000,000 | ||||||||||
Loan and Security Agreement [Member] | Term Loan [Member] | First Tranche [Member] | Maximum [Member] | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Issue of warrants to purchase shares of company's common stock | 1,244,746 |
Warrants - Summary of Change in
Warrants - Summary of Change in Warrant (Detail) - Warrants Not Settleable in Cash [Member] - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2018 | Dec. 31, 2017 | |
Class of Warrant or Right [Line Items] | ||
Number of Warrants, Outstanding, Beginning balance | 13,162,668 | |
Number of Warrants, Exercised | (8,562,631) | |
Number of Warrants, Cancelled | (95,600) | |
Number of Warrants, Outstanding, Ending balance | 4,504,437 | 13,162,668 |
Weighted Average Exercise Price, Outstanding, Beginning balance | $ 1.08 | |
Weighted Average Exercise Price, Exercised | 1.09 | |
Weighted Average Exercise Price, Cancelled | 1.65 | |
Weighted Average Exercise Price, Outstanding, Ending balance | $ 1.03 | $ 1.08 |
Weighted Average Remaining Contractual Life, Outstanding | 4 years | 4 years 6 months |
Weighted Average Grant Date Fair Value, Outstanding, Beginning balance | $ 0.39 | |
Weighted Average Grant Date Fair Value, Outstanding, Ending balance | $ 0.26 | $ 0.39 |
Warrants - Additional Informati
Warrants - Additional Information (Detail) - shares | Sep. 26, 2014 | Sep. 30, 2018 | Apr. 28, 2017 | Jan. 17, 2012 |
Class of Warrant or Right [Line Items] | ||||
Service agreement termination description | In February 2018, the Company terminated its relationship with a vendor who had been issued warrants to acquire 950,000 shares of Common Stock (the “Service Warrants”) with staggered vesting requirements. As part of the termination agreement, the Company accelerated the full vesting of the Service Warrants. | |||
Issue of warrants to purchase shares of company's common stock | 24,900,000 | |||
Warrant expiration period | 7 years | |||
Loan and Security Agreement [Member] | ||||
Class of Warrant or Right [Line Items] | ||||
Issue of warrants to purchase shares of company's common stock | 430,815 |
Purchase Agreement, Controlle_3
Purchase Agreement, Controlled Equity Offering and Public Offering of Common Stock - Additional Information (Detail) - USD ($) | Aug. 31, 2017 | Apr. 28, 2017 | Apr. 27, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 16, 2016 |
Stockholders Equity Common Stock [Line Items] | ||||||
Warrants to purchase common shares | 24,900,000 | |||||
Offering price | $ 1 | |||||
Gross proceeds from public offering | $ 24,900,000 | |||||
Net proceeds from public offering | $ 23,200,000 | |||||
Warrants exercised | 0 | |||||
Lincoln Park Capital Fund, LLC [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Right to sell common stock | 25,000,000 | |||||
Stock issued, shares | 3,972,741 | 300,000 | ||||
Gross proceeds | $ 5,304,000 | $ 412,500 | ||||
Proceeds from issuance of common stock, net of issuance costs | $ 5,304,000 | $ 392,500 | ||||
Stifel, Nicolaus & Company, Incorporated [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Percentage of commission paid | 3.00% | |||||
Stifel, Nicolaus & Company, Incorporated [Member] | Maximum [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Sale of common stock in an at-the-market offering | $ 50,000,000 | |||||
Commitment Shares [Member] | Lincoln Park Capital Fund, LLC [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Stock issued, shares | 345,421 | |||||
Common Stock [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Number of common stock or warrants in each unit | 1 | |||||
Common Stock [Member] | Series A Warrant [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Number of common stock or warrants in each unit | 1 | |||||
Common Stock [Member] | Series B Warrant [Member] | ||||||
Stockholders Equity Common Stock [Line Items] | ||||||
Number of common stock or warrants in each unit | 0.75 |
Purchase Agreement, Controlle_4
Purchase Agreement, Controlled Equity Offering and Public Offering of Common Stock - Schedule of Total Sales under 2017 Sales Agreement (Detail) - Stifel, Nicolaus & Company, Incorporated [Member] - 2017 Sales Agreement [Member] $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($)$ / sharesshares | |
Sale And Issue Of Shares Under Agreement [Line Items] | |
Total shares of common stock sold | shares | 15,998,500 |
Average price per share | $ / shares | $ 3.13 |
Gross proceeds | $ 50,000 |
Commissions earned by Stifel | 1,500 |
Other issuance costs | $ 97 |
Basic and Diluted Net Loss pe_2
Basic and Diluted Net Loss per Share - Additional Information (Detail) - shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Basic And Diluted Earning Per Share [Abstract] | ||
Adjustment to weighted average outstanding common shares | 0 | 0 |
Related Person Transactions - A
Related Person Transactions - Additional Information (Detail) $ / shares in Units, € in Millions | Jan. 04, 2017EUR (€)shares | Dec. 30, 2016EUR (€)shares | Sep. 21, 2015shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) | Jan. 04, 2017$ / shares |
Related Party Transaction [Line Items] | |||||||
Fair value of contingent consideration | $ 12,104,000 | $ 12,418,000 | |||||
Senhance Surgical Robotic System Acquisition [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Reduction of contingent consideration | 100,000 | $ 1,200,000 | |||||
Common shares issued | shares | 15,543,413 | ||||||
Fair value of contingent consideration | 12,100,000 | $ 12,400,000 | |||||
Senhance Surgical Robotic System Acquisition [Member] | Second Tranche [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Reduction of contingent consideration | € | € (5) | ||||||
Common shares issued | shares | 3,722,685 | ||||||
Aggregate fair market value of common stock | € | € 5 | ||||||
Fair value of contingent consideration | € | € 5 | ||||||
Share price | $ / shares | $ 1.404 | ||||||
Number of consecutive trading days | 10 days | ||||||
Sofar [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses for administrative services with related party | $ 0 | $ 52,000 | |||||
Service agreement termination period | 2,017 | ||||||
Sofar [Member] | Senhance Surgical Robotic System Acquisition [Member] | Second Tranche [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Common shares issued | shares | 3,722,685 | ||||||
Sofar [Member] | Common Stock [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Noncontrolling Interest, Ownership Percentage by Noncontrolling Owners | 9.00% | 12.00% | |||||
1Med S.A [Member] | Service Supply Agreement [Member] | |||||||
Related Party Transaction [Line Items] | |||||||
Expenses incurred under related party transactions | $ 62,000 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) € in Millions | Jan. 04, 2017EUR (€) | Dec. 30, 2016EUR (€)shares | Sep. 21, 2015shares | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Operating Leased Assets [Line Items] | ||||||
Fair value of contingent consideration | $ 12,104,000 | $ 12,418,000 | ||||
Liability or related charge recorded for legal contingencies | 0 | 0 | ||||
Senhance Surgical Robotic System Acquisition [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Contingent consideration related to acquisition | 100,000 | $ 1,200,000 | ||||
Common shares issued | shares | 15,543,413 | |||||
Fair value of contingent consideration | $ 12,100,000 | $ 12,400,000 | ||||
Senhance Surgical Robotic System Acquisition [Member] | Second Tranche [Member] | ||||||
Operating Leased Assets [Line Items] | ||||||
Contingent consideration related to acquisition | € | € (5) | |||||
Common shares issued | shares | 3,722,685 | |||||
Aggregate fair market value of common stock | € | € 5 | |||||
Fair value of contingent consideration | € | € 5 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Detail) - USD ($) shares in Thousands | Oct. 31, 2018 | Oct. 23, 2018 | May 23, 2018 |
Hercules Loan Agreement [Member] | Term Loan [Member] | |||
Subsequent Event [Line Items] | |||
Term loans aggregate principal amount | $ 40,000,000 | ||
Hercules Loan Agreement [Member] | Term Loan [Member] | Second Tranche [Member] | |||
Subsequent Event [Line Items] | |||
Term loans aggregate principal amount | $ 10,000,000 | ||
Subsequent Event [Member] | Hercules Loan Agreement [Member] | Term Loan [Member] | Second Tranche [Member] | |||
Subsequent Event [Line Items] | |||
Term loans aggregate principal amount | $ 10,000,000 | ||
Subsequent Event [Member] | MST Purchase Agreement [Member] | Medical Surgery Technologies Ltd. [Member] | First Tranche [Member] | |||
Subsequent Event [Line Items] | |||
Cash consideration | $ 5,800,000 | ||
Common shares issued | 3,150 | ||
Subsequent Event [Member] | MST Purchase Agreement [Member] | Medical Surgery Technologies Ltd. [Member] | Second Tranche [Member] | |||
Subsequent Event [Line Items] | |||
Additional consideration payable in cash, stock or cash and stock | $ 6,600,000 |