Document And Entity Information
Document And Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 07, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | CLEAN DIESEL TECHNOLOGIES INC | |
Document Type | 10-Q | |
Current Fiscal Year End Date | --12-31 | |
Amendment Flag | false | |
Entity Central Index Key | 949,428 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Entity Common Stock, Shares Outstanding | 10,532,318 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash | $ 2,698 | $ 2,958 |
Accounts receivable, net | 5,539 | 4,255 |
Inventories | 8,866 | 7,918 |
Prepaid expenses and other current assets | 2,508 | 1,568 |
Total current assets | 19,611 | 16,699 |
Property and equipment, net | 1,264 | 1,538 |
Intangible assets, net | 1,609 | 1,901 |
Goodwill | 4,760 | 4,659 |
Other assets | 311 | 305 |
Total assets | 27,555 | 25,102 |
Current liabilities: | ||
Line of credit | 3,313 | 3,513 |
Accounts payable | 8,552 | 5,012 |
Accrued expenses and other current liabilities | 6,443 | 7,854 |
Current portion of notes payable | 2,750 | |
Income taxes payable | 647 | 534 |
Total current liabilities | 21,705 | 16,913 |
Notes payable, net of current portion | 7,559 | |
Deferred tax liability | 203 | 193 |
Total liabilities | 21,908 | 24,665 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.01 per share: authorized 100,000; no shares issued and outstanding | ||
Common stock, par value $0.01 per share: authorized 99,900,000 and 24,000,000 shares at September 30, 2016 and December 30, 2015; respectively; issued and outstanding 9,487,432 and 3,559,530 shares at September 30, 2016 and December 31, 2015, respectively | 95 | 36 |
Additional paid-in capital | 226,822 | 205,377 |
Accumulated other comprehensive loss | (5,847) | (5,387) |
Accumulated deficit | (215,423) | (199,589) |
Total stockholders' equity | 5,647 | 437 |
Total liabilities and stockholders' equity | $ 27,555 | $ 25,102 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2016 | Dec. 31, 2015 |
Condensed Consolidated Balance Sheets | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 100,000 | 100,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 99,900,000 | 24,000,000 |
Common stock, shares issued | 9,487,432 | 3,559,530 |
Common stock, shares outstanding | 9,487,432 | 3,559,530 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Condensed Consolidated Statements of Comprehensive Loss | ||||
Revenues | $ 10,132 | $ 9,759 | $ 28,284 | $ 30,038 |
Cost of revenues | 7,425 | 7,300 | 21,153 | 21,994 |
Gross profit | 2,707 | 2,459 | 7,131 | 8,044 |
Operating expenses: | ||||
Research and development | 762 | 2,303 | 3,955 | 6,276 |
Selling, general and administrative | 2,322 | 3,028 | 8,549 | 9,461 |
Severance and other charges | 571 | 3 | 1,945 | 4 |
Total operating expenses | 3,655 | 5,334 | 14,449 | 15,741 |
Loss from continuing operations | (948) | (2,875) | (7,318) | (7,697) |
Other income (expense): | ||||
Interest expense | (489) | (309) | (1,637) | (886) |
Gain on bifurcated derivative liability | 2,754 | |||
Loss on extinguishment of convertible debt | (12,572) | (12,572) | ||
Gain (loss) on warrant liability | (705) | 541 | 883 | 269 |
Other income, net | 196 | 474 | 824 | 640 |
Total other income (expense) | (13,570) | 706 | (9,748) | 23 |
Loss from continuing operations before income taxes | (14,518) | (2,169) | (17,066) | (7,674) |
Income tax benefit from continuing operations | (113) | (28) | (1,232) | (88) |
Net loss from continuing operations | (14,405) | (2,141) | (15,834) | (7,586) |
Net loss from discontinued operations | (67) | (67) | ||
Net loss | (14,405) | (2,208) | (15,834) | (7,653) |
Foreign currency translation adjustments | (190) | (1,155) | (460) | (2,026) |
Comprehensive loss | $ (14,595) | $ (3,363) | $ (16,294) | $ (9,679) |
Basic and diluted net loss per common share: | ||||
Net loss (in dollars per share) | $ (2.45) | $ (0.64) | $ (3.55) | $ (2.48) |
Weighted average shares outstanding - basic and diluted | 5,876 | 3,358 | 4,462 | 3,055 |
Condensed Consolidated Stateme5
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||
Net loss | $ (15,834) | $ (7,653) |
Net loss from discontinued operations | 67 | |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 599 | 660 |
Stock-based compensation expense | 841 | 486 |
Gain on change in fair value of liability-classified warrants | (883) | (269) |
Gain on change in fair value of bifurcated derivative liability | 2,754 | |
Loss on extinguishment of convertible debt | 12,572 | |
Gain on foreign currency transactions | (813) | (545) |
Amortization of debt discount | 494 | |
Loss on disposal of property and equipment | 20 | 1 |
Offering costs allocated to warrants issued | 88 | |
Other | (40) | 91 |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (1,583) | (1,690) |
Inventories | (666) | (1,135) |
Prepaid expenses and other assets | 170 | 23 |
Accounts payable, accrued expenses and other current liabilities | 3,929 | 1,189 |
Income taxes payable | (102) | 511 |
Cash used in operating activities of continuing operations | (4,050) | (8,176) |
Cash used in operating activities of discontinued operations | (667) | |
Net cash used in operating activities | (4,050) | (8,843) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (116) | (342) |
Proceeds from sale of property and equipment | 130 | 8 |
Net cash provided by (used in) investing activities | 14 | (334) |
Cash flows from financing activities: | ||
Net (payments) proceeds under demand line of credit | (201) | 722 |
Proceeds from issuance of debt | 3,750 | |
Proceeds from issuance of common stock and warrants, net of offering costs | 4,490 | |
Proceeds from exercise of warrants | 247 | |
Net cash provided by financing activities | 3,796 | 5,212 |
Effect of exchange rates on cash | (20) | (265) |
Net change in cash | (260) | (4,230) |
Cash at beginning of period | 2,958 | 7,220 |
Cash at end of period | $ 2,698 | $ 2,990 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2016 | |
Organization | |
Organization | 1. Organization Clean Diesel Technologies, Inc. (“CDTi,” “the Company,” “we,” “our,” or “us”) currently commercializes its material technology by manufacturing and distributing light duty vehicle catalysts and heavy duty diesel emissions control systems and products to major automakers, distributors, integrators and retrofitters. The Company is transitioning its business from being a niche manufacturer of emissions control solutions for the automotive and heavy duty diesel markets to becoming an advanced materials technology provider for these markets. The Company has a proven ability to develop proprietary materials incorporating various base metals that replace costly platinum group metals (“PGMs”) in coatings on vehicle catalytic converters. Recently, the Company has expanded its materials platform to include new synergized-PGM diesel oxidation catalysts (SPGM TM DOC), Base-Metal Activated Rhodium Support (BMARS TM ), and Spinel TM technologies, and it is in the process of introducing these new catalyst technologies to Original Equipment Manufacturers (“OEMs”) and other vehicle catalyst manufacturers in a proprietary powder form. The Company believes that its advanced materials focus and strategic repositioning will allow it to achieve greater scale and higher return on its technology investment than in the past. The Company’s business is driven by increasingly stringent global emission standards for internal combustion engines, which are major sources of a variety of harmful pollutants. It has operations in the United States (“U.S.”), the United Kingdom, Japan and Sweden as well as an Asian investment. CDTi is incorporated in the state of Delaware. Its headquarters are located at 1621 Fiske Place, Oxnard, California, phone number 805-486-4649. The Company’s stock trades on NASDAQ under the ticker symbol CDTI. The corporate website is www.CDTI.com. |
Liquidity and Going Concern
Liquidity and Going Concern | 9 Months Ended |
Sep. 30, 2016 | |
Liquidity and Going Concern | |
Liquidity and Going Concern | 2. Liquidity and Going Concern The accompanying condensed consolidated financial statements have been prepared assuming the Company will continue as a going concern. Therefore, the condensed consolidated financial statements contemplate the realization of assets and liquidation of liabilities in the ordinary course of business. The Company has suffered recurring losses and negative cash flows from operations since inception, resulting in an accumulated deficit of $215.4 million at September 30, 2016. The Company has funded its operating losses through asset sales, credit facilities and other borrowings and equity sales. At September 30, 2016, the Company had $2.7 million in cash. We entered into a securities purchase agreement on November 3, 2016, which provides for the sale by the Company of an aggregate of 5,172,250 shares of common stock of the Company at a price of $2.00 per share for $10.3 million. We believe this equity raise will provide us with adequate financing to ensure our ability to continue as a going concern for at least the next twelve months. However, the agreement requires two closings. The first closing was completed November 4, 2016 and provided the Company with gross proceeds of $1.9 million. The second closing will provide the Company with an additional $8.4 million of proceeds. In addition, at the initial closing the Company entered into a registration rights agreement with the investors, dated November 4, 2016, pursuant to which the Company agreed to register for resale by the investors the shares of Common Stock purchased by the investors pursuant to the Purchase Agreement. The Company has committed to file the registration statement no later than 45 days after the Second Closing and to cause the registration statement to become effective no later than the earlier of (i) five business days after the Securities and Exchange Commission “SEC” informs the Company that no review of the registration statement will be made or that the SEC has no further comments on the registration statement or (ii) 120 days after the Second Closing. As the Company will not receive the proceeds from the second closing until the registration filing has been completed, we cannot be certain the agreement will be completely executed and all funding will be received until such date as the filing is completed. If the Company is unable to complete the registration filing and does not receive the $8.4 million of proceeds, the company will require additional financing in the form of funding from outside sources during the first quarter of 2017. The Company will evaluate the amount of cash needed, and the manner in which such cash will be raised, on an ongoing basis. The Company’s continuation as a going concern is dependent upon its ability to obtain adequate financing, which the Company has successfully secured since inception, including financing from equity sales and asset divestitures. However, there is no assurance that the Company will be able to achieve projected levels of revenue and maintain access to sufficient working capital, and accordingly, there is substantial doubt as to whether the Company’s existing cash resources and working capital are sufficient to enable it to continue its operations for the next twelve months if the Company does not complete the second closing. If the Company is unable to obtain the necessary capital, it will be forced to license or liquidate its assets, significantly curtail or cease its operations and/or seek reorganization under the U.S. Bankruptcy Code. The Company has a $7.5 million secured demand financing facility backed by its receivables and inventory with Faunus Group International, Inc. (“FGI”). At September 30, 2016, the Company had $3.3 million in borrowings outstanding under this facility with $4.2 million available. There is no guarantee that the Company will be able to borrow to the full limit of $7.5 million if FGI chooses not to finance a portion of the Company’s receivables or inventory or if the Company does not have available assets to provide the required collateral. FGI can cancel the facility at any time. On May 19, 2015, the Company filed a shelf registration statement on Form S-3 with the SEC, which was declared effective on November 17, 2015. The Form S-3 permits the Company to sell in one or more registered transactions up to an aggregate of $50.0 million of various securities not to exceed one-third of the Company’s public float in any 12-month period. At September 30, 2016, the Company had sold an aggregate of $3.1 million using the Form S-3 and remained eligible to sell pursuant to the 12-month limitation an aggregate of $4.8 million of securities. During the nine months ended September 30, 2016, the Company entered into the following agreements or made amendments to existing debt in order to address cash requirements and improve the Company’s capital structure: · April 1, 2016 Kanis Promissory Note: Kanis S.A agreed to lend the Company $2.0 million at 8% per annum. · April 1, 2016 Kanis Amendment to Loan Agreement: We amended all prior conversion rights in the $7.5 million Kanis loan agreement to provide Kanis the right to convert the loan and accrued interest at $3.60 or market price. The amendment further allows the Company to mandatorily convert the loan and accrued interest upon a Liquidity Event at a discount of 25% below the Liquidity Event price. · April 11, 2016 Bell Director Note: Lon E. Bell, Ph.D. one of the Company’s directors, agreed to lend the Company $0.5 million at 8% per annum. · June 30, 2016 Kanis Exchange Agreement: Kanis S.A agreed to an exchange of $7.5 million in principal plus accrued interest for shares of the Company’s common stock, conditional upon receipt of shareholder approval. · June 30, 2016 Bell Exchange Agreement: Dr. Bell agreed to an exchange of $0.5 million in principal plus accrued interest for shares of the Company’s common stock, conditional upon receipt of shareholder approval. · June 30, 2016 Haldor Topsøe Convertible Notes: The Company agreed to sell and issue (i) a Senior Convertible Promissory Note in the principal amount of $0.75 million and a Convertible Promissory Note in the principal amount of $0.5 million, each of which is convertible into the Company’s equity securities. On August 25, 2016, the Company’s shareholders approved debt conversion transactions with Kanis S.A. and Lon E. Bell. Combined with the conversion of convertible debt held by Haldor Topsøe A/S, the Company issued approximately 5.5 million shares of common stock in exchange for the extinguishment of approximately $8.9 million of total indebtedness. On November 3, 2016, the Company entered into a securities purchase agreement with institutional and individual accredited investors and certain of its officers and directors to raise gross proceeds of approximately $10.3 million in a private placement of common stock at a per-share price of $2.00. The offering is expected to be consummated in two closings. The initial closing for 949,960 shares of common stock, for gross proceeds of approximately $1.9 million, was completed on November 4, 2016. As a condition of consummation of the second closing for approximately 4.2 million shares, for gross proceeds of approximately $8.4 million, the Company obtained approval of the offering from Kanis S.A., the holder of a majority of the Company’s outstanding voting securities at the time of its approval. Prior to consummating the second closing, the Company must file with the Securities and Exchange Commission - and wait at least 20 days after mailing to its stockholders - an information statement containing the information required by Schedule 14(c) of the Securities Exchange Act of 1934. The Company expects the second closing to occur in the fourth quarter of 2016, subject to the satisfaction of customary closing conditions. The Company intends to use the net proceeds from the offering for general corporate purposes, including, but not limited to, working capital, general and administrative expenses, capital expenditures, implementation of strategic priorities, and other corporate uses. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 3. Summary of Significant Accounting Policies Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for interim financial reporting. In the opinion of management, all normal recurring accruals and adjustments that are necessary for a fair presentation have been reflected. Intercompany transactions and balances have been eliminated in consolidation. The results reported in these unaudited condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), but is not required for interim reporting purposes, has been condensed or omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 30, 2016. On July 22, 2016, the Company effected a one-for-five reverse stock split. All share and per share information presented in these unaudited condensed consolidated financial statements has been retroactively adjusted to reflect the reverse stock split. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the condensed consolidated financial statements. Management regularly evaluates estimates and assumptions related to revenue recognition, valuations of liability warrants and the bifurcated derivative liability, allowances for doubtful accounts, warranty reserves, inventory valuation reserves, stock-based compensation, purchased intangible asset valuations and useful lives, goodwill, asset retirement obligations, and deferred income tax asset valuation allowances. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from management’s original estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. All discussions and amounts in the condensed consolidated financial statements and related notes for all periods presented relate to continuing operations only, unless otherwise noted. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. ASU No. 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”. ASU No. 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB finalized the delay of the effective date by one year, making the new standard effective for interim periods and annual periods beginning after December 15, 2017. Early adoption is permitted, but it is not permitted earlier than the original effective date. ASU No. 2014-09 provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. The Company is currently in the process of evaluating the impact of the adoption of ASU No. 2014-09 on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements-Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU No. 2014-15 defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. It is effective for annual reporting periods ending after December 15, 2016, and for annual and interim reporting periods thereafter. Early adoption is permitted. The Company has not elected to early adopt, and it is currently in the process of evaluating the impact of the adoption of ASU No. 2014-15 on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory”. ASU No. 2015-11 changes the measurement principle for inventory from the “lower of cost or market” to “lower of cost and net realizable value.” Net realizable value is defined as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.” ASU No. 2015-11 eliminates the guidance that entities consider replacement cost or net realizable value less an approximately normal profit margin in the subsequent measurement of inventory when cost is determined on a first-in, first-out or average cost basis. It is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company has not yet determined whether it will elect to early adopt ASU 2015-11, and it is currently in the process of evaluating the impact of the adoption of ASU No. 2015-11 on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01 “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”: ASU 2016-01 provides updated guidance that enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation, and disclosure. The standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Except for the early application guidance, early adoption of the amendments is not permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-01 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases”. ASU No. 2016-02 supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. ASU No. 2016-09 will change how companies account for certain aspects of share-based payments to employees. Entities will be required to recognize the income tax effects of awards in the statement of income when the awards vest or are settled, the guidance on employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation and for forfeitures is changing and the update requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU No. 2016-09 on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments: a consensus of the Emerging Task Force.” ASU 2016-15 provides guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. The standard is intended to reduce current diversity in practice. The standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted. The Company has not yet evaluated the impact of the adoption of this accounting standard update on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets of Other Than Inventory.” Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. ASU 2016-16 updates the current guidance by requiring that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU do not change GAAP for the pre-tax effects of an intra-entity asset transfer under Topic 810, Consolidation, or for the income tax effects of an intra-entity transfer of inventory. The standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this accounting standard on its consolidated financial statements. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2016 | |
Inventories | |
Inventories | 4. Inventories Inventories consists of the following (in thousands): September 30, December 31, 2016 2015 Raw materials $ $ Work in process Finished goods Total inventories $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets | |
Goodwill and Intangible Assets | 5. Goodwill and Intangible Assets Goodwill The change in the carrying amount of goodwill during the three and nine months ended September 30, 2016 was due to the effect of foreign currency translation. Intangible Assets Intangible assets consist of the following (in thousands): Useful Life September 30, December 31, in Years 2016 2015 Trade name 15 - 20 $ $ Patents and know-how 5 - 12 Customer relationships 4 - 8 Less accumulated amortization $ $ The Company recorded amortization expense related to amortizable intangible assets of $0.1 million and $0.1 million during the three months ended September 30, 2016 and 2015, respectively and $0.3 million and $0.4 million during the nine months ended September 30, 2016 and 2015, respectively. Estimated amortization expense for each of the next five years is as follows (in thousands): Years ending December 31: Remainder of 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ 2021 $ |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | 6. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): September 30, December 31, 2016 2015 Accrued salaries and benefits $ $ Accrued severance and other charges (1) Accrued warranty (2) Warrant liability (3) Liability for consigned precious metals Other $ $ (1) For additional information, refer to Note 7, “Severance and Other Charges”. (2) For additional information, refer to Note 8, “Accrued Warranty”. (3) For additional information, refer to Note 11, “Warrants” and Note 12, “Fair Value Measurements”. |
Severance and Other Charges
Severance and Other Charges | 9 Months Ended |
Sep. 30, 2016 | |
Severance and Other Charges | |
Severance and Other Charges | 7. Severance and Other Charges Severance and other charges consist of employee severance expense and lease exit costs, and the following summarizes the activity (in thousands): Lease Exit Severance Costs Total December 31, 2015 $ $ - $ Provision Payments - September 30, 2016 $ $ $ |
Accrued Warranty
Accrued Warranty | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Warranty | |
Accrued Warranty | 8. Accrued Warranty The Company establishes reserves for future product warranty costs that are expected to be incurred pursuant to specific warranty provisions with its customers. The Company generally warrants its products against defects between one and five years from date of shipment, depending on the product. The warranty reserves are established at the time of sale and updated throughout the warranty period based upon numerous factors including historical warranty return rates and expenses over various warranty periods. Historically, warranty returns have not been material. The following summarizes the activity in the Company’s accrual for product warranty (in thousands): Nine Months Ended September 30, 2016 2015 Balance at beginning of period $ $ Accrued warranty expense Warranty claims paid Balance at end of period $ $ |
Notes Payable
Notes Payable | 9 Months Ended |
Sep. 30, 2016 | |
Notes Payable | |
Notes Payable | 9. Notes Payable Notes payable consists of the following (in thousands): September 30, December 31, 2016 2015 Line of credit with FGI $ $ $0.8 million, 8% senior convertible promissory note due 2016 - $2.0 million, 8% shareholder note due 2017 - $1.5 million, 8% convertible shareholder note due 2018 (1) - $3.0 million, 8% subordinated convertible shareholder note due 2018 (1) - $3.0 million, 8% convertible shareholder note due 2018 (1) - Less current portion $ - $ (1) As the debt had been converted during the third quarter of 2016, there was no unamortized debt discount at September 30, 2016 . The aggregate amount of unamortized debt discount was $ 0.1 million at December 31, 2015. See below regarding recent amendments to the shareholder notes. Line of credit with FGI At September 30, 2016, the Company had $2.6 million gross accounts receivable pledged to FGI as collateral for short-term debt in the amount of $2.1 million. At September 30, 2016, the Company also had $1.2 million in borrowings outstanding against eligible inventory. The Company was in compliance with the terms of the FGI Facility at September 30, 2016 and December 31, 2015. However, there is no guarantee that the Company will be able to borrow to the full limit of $7.5 million if FGI chooses not to finance a portion of the Company’s receivables or inventory. Kanis S. A. Indebtedness On April 1, 2016, the Company executed a Promissory Note (the “Kanis Note”) and entered into an amendment of existing loan agreements (the “Kanis Agreement”) with Kanis S.A. Pursuant to the terms of the Kanis Note, Kanis S.A. agreed to lend the Company $2.0 million at 8% per annum with a maturity date of September 30, 2017. Pursuant to the terms of the Kanis Agreement, the Company and Kanis S.A. agreed to amend prior loans with an aggregate outstanding principal balance of $7.5 million (collectively, the “Loan Agreements”), such that: (i) Kanis S.A. shall have the right to convert the principal balance of the Loan Agreements and any accrued interest thereon into common stock of the Company at any time prior to maturity at a conversion price equal to the lower of the closing price of CDTI’s common stock on the date before the date of the Kanis Agreement or as of the date when Kanis S.A. exercises its conversion right; and (ii) the Company shall have the right to mandatorily convert the $7.5 million principal balance and any accrued interest thereon into its common stock upon maturity of the Loan Agreements or earlier upon the occurrence of a Liquidity Event at a conversion price equal to the lower of the closing price of CDTI as of the date immediately before the date of the Kanis Agreement or at a 25% discount to the Liquidity Event price. A Liquidity Event is defined as a strategic investment in CDTI or a public stock offering by CDTI. The Company could prepay the principal and any interest due on the Loan Agreements at any time before their maturity date without penalty. Certain features of the Kanis Note resulting from the Kanis Agreement required bifurcation and were determined to be an embedded derivative comprised of a conversion feature and a call option. The embedded derivative was separated from the Kanis Note and carried as a derivative liability on the balance sheet at fair value, with changes in fair value reported through earnings. The conversion feature can be exercised at either $3.60, which is the closing stock price the day prior to the original agreement or at the market price when the conversion is exercised. The call option can be executed by the Company in the event the Company completes a Liquidity Event. The call option will be settled at a 25% discount to the Liquidity Event pricing. For additional information on the bifurcated derivative liability, please see Note 12, “Fair Value Measurements”. On June 30, 2016, the Company entered into a Letter Agreement (the “Kanis Exchange Agreement”) with Kanis S.A. The Company agreed to an exchange with Kanis of an aggregate of $7.5 million in principal amount of promissory notes and other indebtedness (collectively, the “Kanis Notes”) held by Kanis, plus accrued interest, for a number of shares of the Company’s common stock equal to (a) the principal amount of the Kanis Notes plus the accrued interest thereon through and including the date of the settlement of the exchange contemplated by the Kanis Exchange Agreement, divided by (b) $1.6215. At a special meeting of stockholders held on August 25, 2016, our stockholders approved the transactions contemplated by the Kanis Exchange Agreement. On August 30, 2016, we consummated the Kanis Exchange Agreement, pursuant to which we issued to Kanis an aggregate of 4,872,032 shares of common stock in exchange for the delivery to us of the Kanis Notes and the extinguishment of $7.9 million of indebtedness, including $0.4 million of accrued interest and the embedded derivative liability. The exchange resulted in a loss on extinguishment of $11.9 million. Subsequent to the August 30, 2016 conversion, the Company’s sole remaining debt with Kanis S.A. is the loan agreement for $2.0 million, at 8% interest per annum with a maturity date of September 30, 2017, entered into on April 1, 2016. Director note On April 11, 2016, the Company executed a Convertible Promissory Note (the “Director Note”) with Lon E. Bell, Ph.D., one of the Company’s Directors. Pursuant to the terms of the Director Note, Dr. Bell agreed to lend the Company $0.5 million at 8% per annum and a maturity date of September 30, 2017. Dr. Bell had the right to convert the principal balance of the Director Note and any accrued interest thereon into common stock of the Company at any time prior to maturity at a conversion price equal to the lower of the closing price of CDTI on the date before the date of the Director Note or as of the date when Dr. Bell exercises his conversion right. The Company shall have the right to mandatorily convert the principal balance of the Director Note and any accrued interest thereon into its common stock upon maturity at a conversion price equal to the lower of the closing price of CDTI on the date before the date of the Director Note or on the maturity date. The Company shall also have the right to mandatorily convert the principal amount of the Director Note plus accrued interest thereon into its common stock concurrently with the closing of a Liquidity Event at a conversion price equal to the lower of the closing price of CDTI as of the date immediately before the date of this Director Note or at a 25% discount to the Liquidity Event price. A Liquidity Event is defined as a strategic investment in CDTI or a public stock offering by CDTI. Effective May 12, 2016, the Director Note was amended and restated to amend the conversion features contained therein. The Director Note, which originally had a floating conversion price, allowed Dr. Bell to convert the principal balance of the note and any accrued interest thereon at any time before payment into shares of the Company’s common stock at a fixed conversion price of $3.55 per share (subject to adjustment for stock splits, reverse stock splits, and similar events) (the “Conversion Price”), which was the closing consolidated bid price of the Company’s common stock on the trading day immediately prior to the date of issuance. In addition, the Company had the right to mandatorily convert the principal balance of the Director Note plus any accrued interest into shares of the Company’s common stock at the Conversion Price upon the earlier of the Maturity Date and the closing of a Liquidity Event if, and only if, the Conversion Price was less than the average closing price of the Company’s common stock for the five consecutive trading days ending on the trading day immediately preceding the date the Company exercises its conversion rights. On June 30, 2016, the Company entered into a Letter Agreement (the “Bell Exchange Agreement”) with Dr. Bell. The Company agreed to an exchange with Dr. Bell of the Director Note for a number of shares of the Company’s common stock equal to (a) the principal amount of the Bell Note plus the accrued interest thereon through and including the date of the settlement of the exchange contemplated by the Bell Exchange Agreement, divided by (b) $1.6215. At a special meeting of stockholders held on August 25, 2016, the stockholders approved the transactions contemplated by the Bell Exchange Agreement. On August 30, 2016, we consummated the Bell Exchange Agreement transaction, pursuant to which we issued to Dr. Bell an aggregate of 317,950 shares of common stock in exchange for the delivery to us of the Bell Note and the extinguishment of $0.5 million of indebtedness, including accrued interest. The exchange resulted in a loss on extinguishment of $0.6 million. Note Purchase Agreement and Convertible Notes On June 30, 2016, the Company also entered into a Note Purchase Agreement (the “Note Purchase Agreement”) with Haldor Topsøe A/S, a company organized under the laws of Denmark (“Haldor Topsøe”). The Company agreed to sell and issue (i) a Senior Convertible Promissory Note (the “Senior Note”) in the principal amount of $0.75 million and (ii) a Convertible Promissory Note (the “Note”, and with the Senior Note, the “Convertible Notes”) in the principal amount of $0.5 million, each of which is convertible into the Company’s equity securities. The Convertible Notes provide for interest at a rate of 8% per annum, mature on December 31, 2016 and bear no prepayment penalty. The Convertible Notes provide that they shall at no time be convertible into more than 779,350 shares (subject to adjustment for stock splits, reverse stock splits, and similar events) of the Company’s common stock and/or other securities convertible or exercisable for such number of shares of the Company’s common stock. The Convertible Notes permit Haldor Topsøe to convert the principal balance of the Convertible Notes into shares of the Company’s common stock at a fixed conversion price of $1.6215 per share at any time. In addition, the Senior Note permits Haldor Topsøe to convert the principal balance of the Senior Note into equity securities that the Company may issue in a future financing including any instruments or securities exchangeable for or convertible into equity securities, at the same price and on the same terms at which the Company sells equity securities in such future financing. The Company has the right to mandatorily convert the Convertible Notes. As long as the Company’s common stock continues to be listed on The NASDAQ Stock Market, LLC (“NASDAQ”) and the Company is not in default under the Note, the Company has the right to mandatorily convert the principal balance of the Note into shares of its common stock at the conversion price of $1.6215 per share at any time before payment and following the date of conversion of the Kanis Notes into the Company’s common stock. The Company has the right to mandatorily convert the Senior Note, subject to satisfaction of the same conditions to conversion of the Note, upon consummation of a Qualified Financing into the equity securities the Company issues in the Qualified Financing at the same price and on the same terms at which it sells such equity securities in the Qualified Financing. A “Qualified Financing” is defined as an equity or equity-linked financing in which the Company receives aggregate gross proceeds of at least $5.0 million (including the principal amount of the Senior Note converted in such financing). Accrued interest under the Convertible Notes is not convertible into the Company’s equity securities and any interest that has accrued on principal amount converted into equity securities will be paid in cash at the time of such conversion. Pursuant to the Note Purchase Agreement, the Company agreed, if requested by Haldor Topsøe, to expand the size of its board of directors by one member and appoint one person designated by Haldor Topsøe. Thereafter, until the later of (i) the date that the Convertible Notes have been paid in full or (ii) if 100% of the principal amount of the Convertible Notes have been converted into the Company’s common stock and/or other equity securities, the date Haldor Topsøe no longer owns at least eighty percent (80%) of such securities, the Company’s board shall include one person designated by Haldor Topsøe in the board’s slate of nominees to be submitted to stockholders at each meeting of stockholders of the Company where directors are to be elected. On August 30, 2016, we elected to convert the Note, and issued to Haldor Topsøe an aggregate of 308,357 shares of common stock in conversion of $0.5 million in principal amount of indebtedness. Subordination Agreement Concurrently with the execution of the Note Purchase Agreement, Kanis, the Company and Haldor Topsøe executed a Debt Subordination Agreement, dated June 30, 2016, pursuant to which Kanis agreed to subordinate the Company’s obligations under that certain Promissory Note in favor of Kanis, dated as of April 1, 2016, in the initial principal amount of $2.0 million, to the payment to Haldor Topsøe of all indebtedness under the Senior Note. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2016 | |
Stockholders' Equity | |
Stockholders' Equity | 10. Stockholders’ Equity On February 12, 2016, at a special meeting of the Company’s stockholders, the Company’s stockholders voted to approve an amendment to the Restated Certificate of Incorporation to increase the number of authorized shares from 24.0 million shares to 100.0 million shares. Further, on February 12, 2016, the Company filed with the Secretary of State of Delaware a Certificate of Amendment to the Restated Certificate of Incorporation (the “Amendment”) which increased the number of authorized shares from 24.0 million shares to 100.0 million shares, ninety-nine million nine hundred thousand (99.9 million) of which were designated as common stock and one hundred thousand (0.1 million) of which were designated as preferred stock. On May 25, 2016, at the annual meeting of the Company’s Stockholders, the Company’s stockholders voted to approve an amendment to the Restated Certificate of Incorporation to reduce the total number of shares authorized under the Restated Certificate of Incorporation from 100.0 million to 20.0 million. On July 21, 2016, the Company filed with the Secretary of State of Delaware a Certificate of Amendment to the Restated Certificate of Incorporation, which reduced the number of authorized shares from 100.0 million shares to 20.0 million shares, nineteen million nine hundred thousand (19.9 million) of which are designated as common stock and one hundred thousand (0.1 million) of which are designated as preferred stock. The amendment became effective on July 22, 2016. On May 25, 2016 at the Company’s Annual Meeting of Stockholders, the stockholders also voted to approve the amendment of the Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock. On July 21, 2016, the Company filed a Certificate of Amendment to its Restated Certificate of Incorporation, as amended, with the Secretary of State of Delaware to effect a one-for-five reverse stock split of the Company’s common stock, (the “ Reverse Stock Split ”). The amendment became effective on July 22, 2016. As a result of the Reverse Stock Split, every five (5) shares of the Company’s issued and outstanding common stock were combined and reclassified into one (1) share of the Company’s common stock, which began trading on a split-adjusted basis on the NASDAQ Capital Market on July 25, 2016 with a new CUSIP number of 18449C500. The Reverse Stock Split did not change the par value of the Company’s common stock. All share and per share information disclosed in this report reflects the Reverse Stock Split. During the nine months ended September 30, 2016, the increase in additional paid-in capital was attributable to a $1.4 million reclassification of the fair value of warrants exercised, (see Note 11, Warrants), $0.8 million of stock-based compensation expense, and $19.2 million related to the conversion of the Kanis, Bell and Haldor Topsøe indebtedness into equity (see Note 9, Notes Payable) |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2016 | |
Warrants | |
Warrants | 11. Warrants Warrants outstanding and exercisable are summarized as follows: Weighted Average Exercise Range of Shares(1) Price Exercise Prices Outstanding at December 31, 2015 $ $0.05 - $22.50 Exercised $ $0.05 - $3.00 Expired $ $22.50 Outstanding at September 30, 2016 $ $6.25 - $21.00 Exercisable at September 30, 2016 $ $6.25 - $21.00 (1) Outstanding and exercisable information includes 21,920 equity-classified warrants. Warrant Liability The Company’s warrant liability is carried at fair value and is classified as Level 3 in the fair value hierarchy because the warrants are valued based on unobservable inputs. The Company determines the fair value of its warrant liability using the Black-Scholes option-pricing model unless the warrants are subject to market conditions, in which case it uses a Monte Carlo simulation model, which utilizes multiple input variables to estimate the probability that market conditions will be achieved. These models are dependent on several variables, such as the warrant’s expected term, expected strike price, expected risk-free interest rate over the expected term of the instrument, expected dividend yield rate over the expected term and the expected volatility. The expected strike price for warrants with full-ratchet down-round price protection is based on a weighted average probability analysis of the strike price changes expected during the term as a result of the full-ratchet down-round price protection. The assumptions used in the Black-Scholes option-pricing model to estimate the fair value of the warrant liability for these warrants outstanding are as follows: September 30, 2016 December 31, 2015 Issued April 2014 Number of warrants (1) (1) CDTi stock price $ $ $ $ Strike price $ $ $ $ Expected volatility Risk-free interest rate .92% Dividend yield — — — — Expected life in years (1) Concurrent with the November 2015 offering, these warrants were exchanged for warrants with a different strike price and term. September 30, December 31, 2016 2015 Issued November 2014 Number of warrants CDTi stock price $ $ Strike price $ $ Expected volatility (1) Risk-free interest rate Dividend yield — — Expected life in years September 30, 2016 December 31, 2015 Issued June 2015 Number of warrants (1) (1) CDTi stock price $ $ $ $ Strike price $ $ $ $ Expected volatility Risk-free interest rate Dividend yield — — — — Expected life in years (1) Concurrent with the November 2015 offering, these warrants were exchanged for warrants with a different strike price and term. September 30, December 31, 2016 2015 Issued November 2015 Number of warrants CDTi stock price $ $ Strike price $ $ Expected volatility Risk-free interest rate Dividend yield — — Expected life in years The assumptions used in the Monte Carlo simulation model to estimate the fair value of the warrant liability for warrants outstanding with full-ratchet down-round protection are as follows: September 30, 2016 December 31, 2015 Issued July 2013 Number of warrants (1) (1) CDTi stock price $ $ $ $ Strike price $ $ $ $ Expected volatility Risk-free interest rate .90% .74% Dividend yield — — — — Expected life in years (1) In connection with a letter agreement, dated October 7, 2015, the Company agreed to amend the term of these warrants in order to extend the expiration date until November 11, 2019. September 30, December 31, 2016 2015 Issued November 2014 Number of warrants CDTi stock price $ $ Strike price $ $ Expected volatility (1) Risk-free interest rate .90% Dividend yield — — Expected life in years The warrant liability, included in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets, is re-measured at the end of each reporting period with changes in fair value recognized in other expense, net in the accompanying unaudited condensed consolidated statements of comprehensive loss. Upon the exercise of a warrant that is classified as a liability, the fair value of the warrant exercised is re-measured on the exercise date and reclassified from warrant liability to additional paid-in capital. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Fair Value Measurements | 12. Fair Value Measurements The Company measures certain financial assets and liabilities at fair value in accordance with a hierarchy which requires an entity to maximize the use of observable inputs which reflect market data obtained from independent sources and minimize the use of unobservable inputs. There are three levels of inputs that may be used to measure fair value: · Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; · Level 2: Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable including quoted prices for similar instruments in active markets and quoted prices for identical or similar instruments in markets that are not active; and · Level 3: Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. Assets and liabilities measured at fair value on the Company’s balance sheet on a recurring basis include the following at September 30, 2016 and December 31, 2015 (in thousands): Fair Value Measurement at September 30, 2016 Level 1 Level 2 Level 3 Liabilities: Warrant liability - - $ Fair Value Measurement at December 31, 2015 Level 1 Level 2 Level 3 Liabilities: Warrant liability - - $ There were no transfers in and out of Level 1 and Level 2 fair value measurements during the nine months ended September 30, 2016. The following is a reconciliation of the warrant liability, included in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets, measured at fair value using Level 3 inputs (in thousands): Nine Months Ended September 30, 2016 2015 Balance at beginning of period $ $ Issuance of common stock warrants - Exercise of common stock warrants - Remeasurement of common stock warrants Balance at end of period $ $ The following is a reconciliation of the embedded derivative measured at fair value using significant unobservable inputs, Level 3 (in thousands): Nine Months Ended 2016 Balance at beginning of period $ - Transfers in and/or out of Level 3 - Initial valuation of bifurcated derivative liability Extinguishment of bifurcated derivative liability ) Balance at end of period $ -- Upon amendment of the Kanis debt on April 1, 2016, the convertible debt required bifurcation and accounting at fair value. The resulting embedded derivative was comprised of a conversion option, the exercise of which would require shareholder approval, as well as a call option the Company could exercise in the event of a Liquidity Event. The call option would be at a 25% discount to the Liquidity Event price. The company used a Monte Carlo simulation model to estimate the fair value of the embedded derivative portion of the Kanis debt. On August 30, 2016, the Kanis debt was extinguished eliminating the embedded derivative. The fair values of the Company’s cash, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses and other current liabilities approximate carrying values due to the short maturity of these instruments. The fair value of the line of credit approximates its carrying value due to the variable interest rates. Using a net present value model, the fair value of the Company’s current notes payable is $2.7 million at September 30, 2016. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. |
Loss per Share
Loss per Share | 9 Months Ended |
Sep. 30, 2016 | |
Loss per Share | |
Loss per Share | 13. Loss per Share Basic net loss per share is computed using the weighted average number of common shares outstanding during the period. Diluted net loss per share is computed using the weighted average number of common shares plus potentially dilutive common shares. Potentially dilutive common shares include employee stock options and restricted share units and warrants and debt that are convertible into the Company’s common stock. Because the Company incurred net losses in the three and nine months ended September 30, 2016 and the three and nine months ended September 30, 2015, the effect of potentially dilutive securities has been excluded in the computation of diluted loss per share as their impact would be anti-dilutive. Potentially dilutive common stock equivalents excluded were 4.8 million and 3.4 million shares during the three months ended September 30, 2016 and 2015, respectively and 4.3 million and 3.0 million shares during the nine months ended September 30, 2016 and 2015, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 14. Commitments and Contingencies The Company leases facilities under non-cancellable operating leases. The leases expire at various dates through fiscal 2018 and frequently include renewal provisions for varying periods of time, provisions which require us to pay taxes, insurance and maintenance costs, and provisions for minimum rent increases. Minimum leases payments, including scheduled rent increases are recognized as rent expenses on a straight-line basis over the term of the lease. Concentration of Risk For the three months ended September 30, 2016 and 2015, one automotive OEM customer accounted for 68% and 61%, respectively of the Company’s revenues and for the nine months ended September 30, 2016 and 2015, 60% and 60%, respectively. This customer accounted for 37% and 44% of the Company’s accounts receivable at September 30, 2016 and December 31, 2015, respectively. No other customers accounted for 10% or more of the Company’s revenues or accounts receivable for these periods. For the periods presented below, certain vendors accounted for 10% or more of the Company’s raw material purchases as follows: Three Months Ended Nine Months Ended September 30, September 30, Vendor Supplies 2016 2015 2016 2015 A Substrates 36% 40% 38% 42% B Substrates 12% 21% * 16% * less than 10% Litigation The Company is involved in legal proceedings from time to time in the ordinary course of its business. Management does not believe that any of these claims and proceedings against it is likely to have, individually or in the aggregate, a material adverse effect on the Company’s condensed consolidated financial condition, results of operations or cash flows. Accordingly, the Company cannot determine the final amount, if any, of its liability beyond the amount accrued in the unaudited condensed consolidated financial statements as of September 30, 2016, nor is it possible to estimate what litigation-related costs will be in the future. California Air Resources Board (“CARB”) By email dated June 26, 2015, CARB asserted the Company had deficiencies in compliance with the Verification Procedure, Aftermarket Parts Regulations and the Vehicle Code. The initial penalty calculated by CARB for these alleged violations was $1.8 million, with the largest component relating to the use of empty center bodies to allow trucks to be placed back in service while warranty claims are being evaluated. This process is now explicitly permitted by regulation, but was not permitted at the time of the alleged violation. Although the Company disagreed, and continues to disagree, with CARB’s findings, the Company has cooperated with CARB’s investigation and is discussing with CARB whether and to what extent the payment of monetary penalties would be appropriate. After review and evaluation of CARB’s findings and publicly available CARB settlements for similar matters, the Company has accrued an expense of less than $0.1 million as of December 31, 2015 for a proposed settlement provided to CARB to resolve this matter. During 2016, CARB responded to the Company’s proposed settlement with a counter-proposal of $0.8 million by cutting certain components of their initial penalty in half and reducing certain penalties. In April 2016, the Company responded to CARB with a counter offer that was less than $0.1 million. CARB then responded with a counter offer of approximately $0.2 million. In July 2016, the Company provided a counter offer of $0.1 million. In the event that a mutually satisfactory agreement cannot be reached, the Company plans to defend any formal action taken by CARB. After review and evaluation of CARB’s findings and publicly available CARB settlements for similar matters, the Company has accrued an expense of $0.1 million as of September 30, 2016. For information related to commitments and contingencies related to Applied Utility Systems, a former subsidiary of the Company that was sold in 2009, refer to Note 16, “Discontinued Operations”. Indemnification Agreements In the ordinary course of business, the Company enters into agreements of varying scope and terms pursuant to which we agree to indemnify customers, vendors, lessors, business partners and other parties with respect to certain matters, including, but not limited to, losses arising out of breach of such agreements, services to be provided by us or from intellectual property infringement claims made by third parties. In addition, we have entered into indemnification agreements with directors and certain officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. No demands have been made upon the Company to provide indemnification under such agreements and there are no claims that the Company is aware of that could have a material effect on the consolidated financial position and results of operations. |
Segment Reporting and Geographi
Segment Reporting and Geographic Information | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting and Geographic Information | |
Segment Reporting and Geographic Information | 15. Segment Reporting and Geographic Information In the past, the Company operated with two reportable business division segments based on the products it delivered. Beginning in the last quarter of 2015, the Company had been transitioning from a niche manufacturer of emissions control solutions for the automotive and heavy duty diesel markets to becoming an advanced materials technology provider for these markets. During the second quarter of 2016, the transition was completed and the Company now views its operations and measures its business as one reportable segment. Net sales by geographic region based on the location of the Company’s point of sale is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 United States $ $ $ $ Canada - Europe Total international Total revenues $ $ $ $ |
Discontinued Operations
Discontinued Operations | 9 Months Ended |
Sep. 30, 2016 | |
Discontinued Operations | |
Discontinued Operations | 16. Discontinued Operations Applied Utility Systems, Inc. The Company is undergoing a sales and use tax audit by the State of California (the “State”) on Applied Utility Systems, Inc . “AUS” for the period of 2007 through 2009. The audit has identified a project performed by the Company during that time period for which sales tax was not collected and remitted and for which the State asserts that proper documentation of resale may not have been obtained and that the Company owes sales tax of $1.5 million, inclusive of interest. The Company contends and believes that it received sufficient and proper documentation from its customer to support not collecting and remitting sales tax from that customer and is actively disputing the audit report with the State. On August 12, 2013, the Company appeared at an appeals conference with the State Board of Equalization (“BOE”). On July 21, 2014, the Company received a Decision and Recommendation (“D&R”) from the BOE. The D&R’s conclusion was that the basis for the calculation of the aforementioned $1.5 million tax due should be reduced from $12.2 million to $9.0 million with a commensurate reduction in the tax owed to the State. Based on a re-audit, the BOE lowered the tax due to $0.9 million, inclusive of interest. The Company continues to disagree with these findings based on the aforementioned reasons. However, in October 2015, the Company offered to settle this case for $0.1 million, which is based on the expected cost of continuing to contest this audit. Accordingly, an accrual was charged to discontinued operations during the year ended December 31, 2015, and this accrual is also recorded as a liability as of September 30, 2016. Should the Company not prevail with the offer to settle this case, it plans to continue with the appeals process. Further, should the Company not prevail in this case, it will pursue reimbursement from the customer for all assessments from the State. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events Financing Transaction On November 3, 2016, the Company entered into a securities purchase agreement (the “Purchase Agreement”), with certain accredited investors, which provides for the sale by the Company of an aggregate of 5,172,250 shares of common stock of the Company, par value $0.01 per share (the “Common Stock”), at a price of $2.00 per share (the “Offering”). The investors include four employees and directors of the Company, each of whom agreed to purchase shares of Common Stock on the same terms and conditions as the other investors, and who collectively agreed to purchase 277,500 shares for an aggregate purchase price of $0.6 million. On November 4, 2016, the Company sold 949,960 shares of Common Stock at the initial closing of the Offering (the “Initial Closing”) for aggregate gross proceeds of $1.9 million. The Company also issued to MDB Capital Group LLC (the “Placement Agent”), in consideration for its services as placement agent for the Offering, 94,996 shares of Common Stock and a five-year warrant to purchase up to 94,996 shares of Common Stock at an exercise price of $2.20 per share (the “Agent Warrant”). No employees or directors of the Company purchased shares of Common Stock at the Initial Closing. The second closing of the Offering (the “Second Closing”) for the sale of 4,222,290 shares of Common Stock for gross proceeds of $8.4 million is contemplated to occur promptly following the effectiveness of the written consent of the Company’s majority stockholder approving the Offering in accordance with the requirements of the Nasdaq Marketplace Rules. The Placement Agent will be entitled to compensation in connection with the Second Closing consisting of (i) a number of shares of Common Stock equal to 10% of the number of shares of Common Stock issued at the Second Closing, and (ii) a five-year warrant to purchase a number of shares of Common Stock equal to 10% of the number of shares of Common Stock issued at the Second Closing at an exercise price of $2.20 per share; provided that no shares of Common Stock or warrants will be issued to the Placement Agent in respect of any shares sold at the Second Closing to Kanis S.A., Haldor Topsøe A/S, any officer or director of CDTi, or any of their respective affiliates. On October 24, 2016, the Company received a written consent from Kanis S.A., the holder of a majority of the Company’s outstanding shares of Common Stock as of such date, approving the offer and sale of securities by the Company in a private placement transaction, or series of related private placement transactions, on terms similar to the terms of the Offering. Prior to consummating the Second Closing, the Company must file with the Securities and Exchange Commission, and wait at least 20 days after mailing to its stockholders, an information statement containing the information required by Schedule 14(c) of the Securities Exchange Act of 1934. The Company expects the Second Closing to occur during the fourth quarter of 2016 subject to the satisfaction of customary closing conditions. 2016 Omnibus Incentive Plan October 24, 2016, received a written consent from Kanis S.A., our majority stockholder as of such date, approving the adoption of the Clean Diesel Technologies, Inc. 2016 Omnibus Incentive Plan pursuant to which the Company may issue up to 2,250,000 shares of its common stock pursuant to awards granted thereunder. The Company’s board of directors approved the plan on October 11, 2016. Prior to the plan becoming effective, the Company must file with the Securities and Exchange Commission, and wait at least 20 days after mailing to its stockholders, an information statement containing the information required by Schedule 14(c) of the Securities Exchange Act of 1934. The Company expects the plan to become effective during the fourth quarter of 2016. Amendment to Restated Certificate of Incorporation October 24, 2016, received a written consent from Kanis S.A., our majority stockholder as of such date, approving the amendment of the Company’s Restated Certificate of Incorporation, as amended, to increase the total number of authorized shares of common stock from 19,900,000 to 50,000,000. The Company’s board of directors approved the amendment on October 11, 2016. Prior to the amendment becoming effective, the Company must file with the Securities and Exchange Commission, and wait at least 20 days after mailing to its stockholders, an information statement containing the information required by Schedule 14(c) of the Securities Exchange Act of 1934. The Company expects the amendment to become effective during the fourth quarter of 2016. |
Summary of Significant Accoun23
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Significant Accounting Policies | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC for interim financial reporting. In the opinion of management, all normal recurring accruals and adjustments that are necessary for a fair presentation have been reflected. Intercompany transactions and balances have been eliminated in consolidation. The results reported in these unaudited condensed consolidated financial statements should not necessarily be taken as indicative of results that may be expected for the entire year. Certain financial information that is normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”), but is not required for interim reporting purposes, has been condensed or omitted. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015, filed with the SEC on March 30, 2016. On July 22, 2016, the Company effected a one-for-five reverse stock split. All share and per share information presented in these unaudited condensed consolidated financial statements has been retroactively adjusted to reflect the reverse stock split. |
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and disclosures made in the accompanying notes to the condensed consolidated financial statements. Management regularly evaluates estimates and assumptions related to revenue recognition, valuations of liability warrants and the bifurcated derivative liability, allowances for doubtful accounts, warranty reserves, inventory valuation reserves, stock-based compensation, purchased intangible asset valuations and useful lives, goodwill, asset retirement obligations, and deferred income tax asset valuation allowances. These estimates and assumptions are based on current facts, historical experience and various other factors believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. The actual results experienced may differ materially and adversely from management’s original estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected. All discussions and amounts in the condensed consolidated financial statements and related notes for all periods presented relate to continuing operations only, unless otherwise noted. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”. ASU No. 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)”. ASU No. 2014-09 requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In July 2015, the FASB finalized the delay of the effective date by one year, making the new standard effective for interim periods and annual periods beginning after December 15, 2017. Early adoption is permitted, but it is not permitted earlier than the original effective date. ASU No. 2014-09 provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. The Company is currently in the process of evaluating the impact of the adoption of ASU No. 2014-09 on its consolidated financial statements. In August 2014, the FASB issued ASU No. 2014-15, “Presentation of Financial Statements-Going Concern: Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. ASU No. 2014-15 defines management’s responsibility to assess an entity’s ability to continue as a going concern, and to provide related footnote disclosures in certain circumstances. It is effective for annual reporting periods ending after December 15, 2016, and for annual and interim reporting periods thereafter. Early adoption is permitted. The Company has not elected to early adopt, and it is currently in the process of evaluating the impact of the adoption of ASU No. 2014-15 on its consolidated financial statements. In July 2015, the FASB issued ASU No. 2015-11, “Inventory: Simplifying the Measurement of Inventory”. ASU No. 2015-11 changes the measurement principle for inventory from the “lower of cost or market” to “lower of cost and net realizable value.” Net realizable value is defined as the “estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation.” ASU No. 2015-11 eliminates the guidance that entities consider replacement cost or net realizable value less an approximately normal profit margin in the subsequent measurement of inventory when cost is determined on a first-in, first-out or average cost basis. It is effective for annual reporting periods beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company has not yet determined whether it will elect to early adopt ASU 2015-11, and it is currently in the process of evaluating the impact of the adoption of ASU No. 2015-11 on its consolidated financial statements. In January 2016, the FASB issued ASU 2016-01 “Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities”: ASU 2016-01 provides updated guidance that enhances the reporting model for financial instruments, which includes amendments to address aspects of recognition, measurement, presentation, and disclosure. The standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Except for the early application guidance, early adoption of the amendments is not permitted. The Company is currently evaluating the impact of the adoption of ASU 2016-01 on its consolidated financial statements. In February 2016, the FASB issued ASU No. 2016-02, “Leases”. ASU No. 2016-02 supersedes the leasing guidance in Topic 840, Leases. Under the new guidance, lessees are required to recognize lease assets and lease liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with classification affecting the pattern of expense recognition in the income statement. ASU No. 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the impact of the adoption of ASU No. 2016-02 on its consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation: Improvements to Employee Share-Based Payment Accounting”. ASU No. 2016-09 will change how companies account for certain aspects of share-based payments to employees. Entities will be required to recognize the income tax effects of awards in the statement of income when the awards vest or are settled, the guidance on employers’ accounting for an employee’s use of shares to satisfy the employer’s statutory income tax withholding obligation and for forfeitures is changing and the update requires companies to present excess tax benefits as an operating activity on the statement of cash flows rather than as a financing activity. ASU No. 2016-09 is effective for annual periods beginning after December 15, 2016 and interim periods within those annual periods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of ASU No. 2016-09 on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “Classification of Certain Cash Receipts and Cash Payments: a consensus of the Emerging Task Force.” ASU 2016-15 provides guidance on how certain cash receipts and payments are presented and classified in the statement of cash flows, including debt prepayment or debt extinguishment costs, contingent consideration payments made after a business combination, and separately identifiable cash flows and application of the predominance principle. The standard is intended to reduce current diversity in practice. The standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted. The Company has not yet evaluated the impact of the adoption of this accounting standard update on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, “Intra-Entity Transfers of Assets of Other Than Inventory.” Current GAAP prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. ASU 2016-16 updates the current guidance by requiring that entities recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The amendments in this ASU do not change GAAP for the pre-tax effects of an intra-entity asset transfer under Topic 810, Consolidation, or for the income tax effects of an intra-entity transfer of inventory. The standard will be effective for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this accounting standard on its consolidated financial statements. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Inventories | |
Schedule of Inventories | Inventories consists of the following (in thousands): September 30, December 31, 2016 2015 Raw materials $ $ Work in process Finished goods Total inventories $ $ |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets | |
Schedule of intangible assets | Intangible assets consist of the following (in thousands): Useful Life September 30, December 31, in Years 2016 2015 Trade name 15 - 20 $ $ Patents and know-how 5 - 12 Customer relationships 4 - 8 Less accumulated amortization $ $ |
Schedule of estimated amortization expense | Estimated amortization expense for each of the next five years is as follows (in thousands): Years ending December 31: Remainder of 2016 $ 2017 $ 2018 $ 2019 $ 2020 $ 2021 $ |
Accrued Expenses and Other Cu26
Accrued Expenses and Other Current Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): September 30, December 31, 2016 2015 Accrued salaries and benefits $ $ Accrued severance and other charges (1) Accrued warranty (2) Warrant liability (3) Liability for consigned precious metals Other $ $ (1) For additional information, refer to Note 7, “Severance and Other Charges”. (2) For additional information, refer to Note 8, “Accrued Warranty”. (3) For additional information, refer to Note 11, “Warrants” and Note 12, “Fair Value Measurements”. |
Severance and Other Charges (Ta
Severance and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Severance and Other Charges | |
Schedule of severance and other charges | Severance and other charges consist of employee severance expense and lease exit costs, and the following summarizes the activity (in thousands): Lease Exit Severance Costs Total December 31, 2015 $ $ - $ Provision Payments - September 30, 2016 $ $ $ |
Accrued Warranty (Tables)
Accrued Warranty (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accrued Warranty | |
Schedule of accrual for product warranty | The following summarizes the activity in the Company’s accrual for product warranty (in thousands): Nine Months Ended September 30, 2016 2015 Balance at beginning of period $ $ Accrued warranty expense Warranty claims paid Balance at end of period $ $ |
Notes Payable (Tables)
Notes Payable (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Notes Payable | |
Schedule of notes payable | Notes payable consists of the following (in thousands): September 30, December 31, 2016 2015 Line of credit with FGI $ $ $0.8 million, 8% senior convertible promissory note due 2016 - $2.0 million, 8% shareholder note due 2017 - $1.5 million, 8% convertible shareholder note due 2018 (1) - $3.0 million, 8% subordinated convertible shareholder note due 2018 (1) - $3.0 million, 8% convertible shareholder note due 2018 (1) - Less current portion $ - $ (1) As the debt had been converted during the third quarter of 2016, there was no unamortized debt discount at September 30, 2016 . The aggregate amount of unamortized debt discount was $ 0.1 million at December 31, 2015. See below regarding recent amendments to the shareholder notes. |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Schedule of warrants activity | Weighted Average Exercise Range of Shares(1) Price Exercise Prices Outstanding at December 31, 2015 $ $0.05 - $22.50 Exercised $ $0.05 - $3.00 Expired $ $22.50 Outstanding at September 30, 2016 $ $6.25 - $21.00 Exercisable at September 30, 2016 $ $6.25 - $21.00 (1) Outstanding and exercisable information includes 21,920 equity-classified warrants. |
Black Scholes | |
Schedule of Share Based Payment Award Warrants Valuation Assumptions | September 30, 2016 December 31, 2015 Issued April 2014 Number of warrants (1) (1) CDTi stock price $ $ $ $ Strike price $ $ $ $ Expected volatility Risk-free interest rate .92% Dividend yield — — — — Expected life in years (1) Concurrent with the November 2015 offering, these warrants were exchanged for warrants with a different strike price and term. September 30, December 31, 2016 2015 Issued November 2014 Number of warrants CDTi stock price $ $ Strike price $ $ Expected volatility (1) Risk-free interest rate Dividend yield — — Expected life in years September 30, 2016 December 31, 2015 Issued June 2015 Number of warrants (1) (1) CDTi stock price $ $ $ $ Strike price $ $ $ $ Expected volatility Risk-free interest rate Dividend yield — — — — Expected life in years (1) Concurrent with the November 2015 offering, these warrants were exchanged for warrants with a different strike price and term. September 30, December 31, 2016 2015 Issued November 2015 Number of warrants CDTi stock price $ $ Strike price $ $ Expected volatility Risk-free interest rate Dividend yield — — Expected life in years |
Monte Carlo Simulation Model | |
Schedule of Share Based Payment Award Warrants Valuation Assumptions | September 30, 2016 December 31, 2015 Issued July 2013 Number of warrants (1) (1) CDTi stock price $ $ $ $ Strike price $ $ $ $ Expected volatility Risk-free interest rate .90% .74% Dividend yield — — — — Expected life in years (1) In connection with a letter agreement, dated October 7, 2015, the Company agreed to amend the term of these warrants in order to extend the expiration date until November 11, 2019. September 30, December 31, 2016 2015 Issued November 2014 Number of warrants CDTi stock price $ $ Strike price $ $ Expected volatility (1) Risk-free interest rate .90% Dividend yield — — Expected life in years |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Measurements | |
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on the Company’s balance sheet on a recurring basis include the following at September 30, 2016 and December 31, 2015 (in thousands): Fair Value Measurement at September 30, 2016 Level 1 Level 2 Level 3 Liabilities: Warrant liability - - $ Fair Value Measurement at December 31, 2015 Level 1 Level 2 Level 3 Liabilities: Warrant liability - - $ |
Schedule of reconciliation of warrant liability | The following is a reconciliation of the warrant liability, included in accrued expenses and other current liabilities in the accompanying unaudited condensed consolidated balance sheets, measured at fair value using Level 3 inputs (in thousands): Nine Months Ended September 30, 2016 2015 Balance at beginning of period $ $ Issuance of common stock warrants - Exercise of common stock warrants - Remeasurement of common stock warrants Balance at end of period $ $ |
Schedule of reconciliation of the embedded derivative measured at fair value | The following is a reconciliation of the embedded derivative measured at fair value using significant unobservable inputs, Level 3 (in thousands): Nine Months Ended 2016 Balance at beginning of period $ - Transfers in and/or out of Level 3 - Initial valuation of bifurcated derivative liability Extinguishment of bifurcated derivative liability ) Balance at end of period $ -- |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies. | |
Schedule of vendors which accounted for 10% or more of the Company's raw material purchases | Three Months Ended Nine Months Ended September 30, September 30, Vendor Supplies 2016 2015 2016 2015 A Substrates 36% 40% 38% 42% B Substrates 12% 21% * 16% * less than 10% |
Segment Reporting and Geograp33
Segment Reporting and Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting and Geographic Information | |
Schedule of net sales by geographic region | Net sales by geographic region based on the location of the Company’s point of sale is as follows (in thousands): Three Months Ended Nine Months Ended September 30, September 30, 2016 2015 2016 2015 United States $ $ $ $ Canada - Europe Total international Total revenues $ $ $ $ |
Liquidity and Going Concern - L
Liquidity and Going Concern - Line of Credit and Shelf Registration (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 04, 2016 | Nov. 03, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | May 19, 2015 | Dec. 31, 2014 |
Liquidity and Going Concern | ||||||||
Accumulated deficit | $ 215,423 | $ 199,589 | ||||||
Cash | 2,698 | $ 2,958 | $ 2,990 | $ 7,220 | ||||
Shelf Registration | ||||||||
Liquidity and Going Concern | ||||||||
Aggregate securities authorized | 4,800 | $ 50,000 | ||||||
Maximum percentage of public float for public offering limit | 33.00% | |||||||
Aggregate securities sold | 3,100 | |||||||
Subsequent Event | Private Placement | Common Stock | ||||||||
Liquidity and Going Concern | ||||||||
Sale of shares (in shares) | 949,960 | 5,172,250 | ||||||
Share price (in dollars per share) | $ 2 | |||||||
Aggregate value of common stock | $ 10,300 | |||||||
Aggregate gross proceeds | $ 1,900 | |||||||
Subsequent Event | Private Placement | Common Stock | Forecast | ||||||||
Liquidity and Going Concern | ||||||||
Sale of shares (in shares) | 4,222,290 | |||||||
Aggregate gross proceeds | $ 8,400 | |||||||
Line of Credit | Line of credit with FGI | ||||||||
Liquidity and Going Concern | ||||||||
Maximum borrowing capacity | 7,500 | |||||||
Borrowings outstanding | 3,300 | |||||||
Available borrowing capacity | $ 4,200 |
Liquidity and Going Concern - A
Liquidity and Going Concern - Agreements (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 04, 2016 | Nov. 03, 2016 | Aug. 30, 2016 | Aug. 25, 2016 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Apr. 11, 2016 | Apr. 01, 2016 |
Convertible Debt | |||||||||
Liquidity and Going Concern | |||||||||
Debt conversion, shares issued | 5,500,000 | ||||||||
Amount of debt extinguished | $ 8,900 | ||||||||
Private Placement | Common Stock | Subsequent Event | |||||||||
Liquidity and Going Concern | |||||||||
Aggregate value of common stock | $ 10,300 | ||||||||
Share price (in dollars per share) | $ 2 | ||||||||
Sale of shares (in shares) | 949,960 | 5,172,250 | |||||||
Proceeds from private placement | $ 1,900 | ||||||||
Private Placement | Common Stock | Subsequent Event | Forecast | |||||||||
Liquidity and Going Concern | |||||||||
Sale of shares (in shares) | 4,222,290 | ||||||||
Proceeds from private placement | $ 8,400 | ||||||||
$2.0 million, 8% shareholder note due 2017 | Notes Payable, Other Payables | |||||||||
Liquidity and Going Concern | |||||||||
Face amount of debt | $ 2,000 | $ 2,000 | |||||||
Interest rate (as a percent) | 8.00% | 8.00% | |||||||
Kanis Agreement | Convertible Debt | |||||||||
Liquidity and Going Concern | |||||||||
Principal amount | $ 7,500 | $ 7,500 | |||||||
Conversion price (in dollars per share) | $ 1.6215 | $ 3.60 | |||||||
Liquidity event discount (as a percent) | 25.00% | ||||||||
Amount of debt extinguished | $ 7,900 | ||||||||
$0.5 million, 8% convertible director note due 2017 | Convertible Debt | |||||||||
Liquidity and Going Concern | |||||||||
Face amount of debt | $ 500 | ||||||||
Interest rate (as a percent) | 8.00% | ||||||||
Liquidity event discount (as a percent) | 25.00% | ||||||||
Bell Exchange Agreement | Convertible Debt | |||||||||
Liquidity and Going Concern | |||||||||
Principal amount | $ 500 | ||||||||
Conversion price (in dollars per share) | $ 1.6215 | ||||||||
Amount of debt extinguished | $ 500 | ||||||||
$0.8 million, 8% senior convertible promissory note due 2016 | Convertible Debt | |||||||||
Liquidity and Going Concern | |||||||||
Face amount of debt | $ 800 | ||||||||
Interest rate (as a percent) | 8.00% | ||||||||
Convertible promissory note | $ 750 | ||||||||
$0.5 million, 8% convertible promissory note due 2016 | Convertible Debt | |||||||||
Liquidity and Going Concern | |||||||||
Convertible promissory note | $ 500 |
Summary of Significant Accoun36
Summary of Significant Accounting Policies (Details) | Jul. 22, 2016 |
Common Stock | |
Reverse stock split ratio | 0.20 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Inventories | ||
Raw materials | $ 4,536 | $ 3,894 |
Work in process | 1,190 | 844 |
Finished goods | 3,140 | 3,180 |
Total inventories | $ 8,866 | $ 7,918 |
Goodwill and Intangible Asset38
Goodwill and Intangible Assets - Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Finite-lived intangible assets | ||
Intangible assets, gross | $ 6,117 | $ 5,912 |
Less accumulated amortization | (4,508) | (4,011) |
Intangible assets, net | 1,609 | 1,901 |
Trade name | ||
Finite-lived intangible assets | ||
Intangible assets, gross | 1,217 | 1,186 |
Patents and know-how | ||
Finite-lived intangible assets | ||
Intangible assets, gross | 4,154 | 4,002 |
Customer relationships | ||
Finite-lived intangible assets | ||
Intangible assets, gross | $ 746 | $ 724 |
Minimum | Trade name | ||
Finite-lived intangible assets | ||
Useful life | 15 years | |
Minimum | Patents and know-how | ||
Finite-lived intangible assets | ||
Useful life | 5 years | |
Minimum | Customer relationships | ||
Finite-lived intangible assets | ||
Useful life | 4 years | |
Maximum | Trade name | ||
Finite-lived intangible assets | ||
Useful life | 20 years | |
Maximum | Patents and know-how | ||
Finite-lived intangible assets | ||
Useful life | 12 years | |
Maximum | Customer relationships | ||
Finite-lived intangible assets | ||
Useful life | 8 years |
Goodwill and Intangible Asset39
Goodwill and Intangible Assets - Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Goodwill and Intangible Assets | ||||
Amortization of intangible assets | $ 100 | $ 100 | $ 300 | $ 400 |
Estimated amortization expense for each of the next five years | ||||
Remainder of 2016 | 113 | 113 | ||
2,017 | 442 | 442 | ||
2,018 | 163 | 163 | ||
2,019 | 163 | 163 | ||
2,020 | 163 | 163 | ||
2,021 | $ 163 | $ 163 |
Accrued Expenses and Other Cu40
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Dec. 31, 2014 |
Accrued Expenses and Other Current Liabilities | ||||
Accrued salaries and benefits | $ 1,163 | $ 1,332 | ||
Accrued severance and other charges | 1,453 | 1,092 | ||
Accrued warranty | 314 | 228 | $ 301 | $ 373 |
Warrant liability | 965 | 3,072 | ||
Liability for consigned precious metals | 1,000 | 543 | ||
Other | 1,548 | 1,587 | ||
Accrued expenses and other current liabilities | $ 6,443 | $ 7,854 |
Severance and Other Charges (De
Severance and Other Charges (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Severance and other charges | |
Balance, start of period | $ 1,092 |
Provision | 1,361 |
Payments | (1,000) |
Balance, end of period | 1,453 |
Severance | |
Severance and other charges | |
Balance, start of period | 1,092 |
Provision | 791 |
Payments | (1,000) |
Balance, end of period | 883 |
Lease Exit Costs | |
Severance and other charges | |
Provision | 570 |
Balance, end of period | $ 570 |
Accrued Warranty (Details)
Accrued Warranty (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Accrued Warranty | ||
Balance at beginning of period | $ 228 | $ 373 |
Accrued warranty expense | 387 | 316 |
Warranty claims paid | (301) | (388) |
Balance at end of period | $ 314 | $ 301 |
Minimum | ||
Warrants period | 1 year | |
Maximum | ||
Warrants period | 5 years |
Notes Payable - Long-term and S
Notes Payable - Long-term and Short-term, Combined (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Apr. 01, 2016 | Dec. 31, 2015 |
Debt, long-term and short-term, combined amount | |||
Total debt | $ 6,063 | $ 11,072 | |
Less current portion | (6,063) | (3,513) | |
Long-term debt, net of current portion | 7,559 | ||
Unamortized debt discount | 0 | 100 | |
Line of credit with FGI | Line of Credit | |||
Debt, long-term and short-term, combined amount | |||
Total debt | 3,313 | 3,513 | |
$0.8 million, 8% senior convertible promissory note due 2016 | Convertible Debt | |||
Debt, long-term and short-term, combined amount | |||
Face amount of debt | $ 800 | ||
Interest rate (as a percent) | 8.00% | ||
Total debt | $ 750 | ||
Convertible Debt | $1.5 million, 8% convertible shareholder note due 2018 | |||
Debt, long-term and short-term, combined amount | |||
Face amount of debt | $ 1,500 | $ 1,500 | |
Interest rate (as a percent) | 8.00% | 8.00% | |
Total debt | $ 1,623 | ||
Convertible Debt | $3.0 million, 8% convertible shareholder note due 2018 | |||
Debt, long-term and short-term, combined amount | |||
Face amount of debt | $ 3,000 | $ 3,000 | |
Interest rate (as a percent) | 8.00% | 8.00% | |
Total debt | $ 2,964 | ||
Convertible Subordinated Debt | $3.0 million 8% subordinated convertible shareholder note due 2018 | |||
Debt, long-term and short-term, combined amount | |||
Face amount of debt | $ 3,000 | $ 3,000 | |
Interest rate (as a percent) | 8.00% | 8.00% | |
Total debt | $ 2,972 | ||
Notes Payable, Other Payables | $2.0 million, 8% shareholder note due 2017 | |||
Debt, long-term and short-term, combined amount | |||
Face amount of debt | $ 2,000 | $ 2,000 | |
Interest rate (as a percent) | 8.00% | 8.00% | |
Total debt | $ 2,000 |
Notes Payable - Agreements (Det
Notes Payable - Agreements (Details) $ / shares in Units, $ in Thousands | Aug. 30, 2016USD ($)shares | Aug. 25, 2016USD ($) | Jun. 30, 2016USD ($)director$ / sharesshares | May 12, 2016$ / shares | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($)director$ / shares | Sep. 30, 2016USD ($) | Apr. 11, 2016USD ($) | Apr. 01, 2016USD ($)$ / shares |
Line of Credit Facility | |||||||||
Loss on extinguishment of debt | $ 12,572 | $ 12,572 | |||||||
Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Amount of debt extinguished | $ 8,900 | ||||||||
Line of credit with FGI | Line of Credit | |||||||||
Line of Credit Facility | |||||||||
Gross accounts receivable pledged as collateral | 2,600 | 2,600 | |||||||
Short-term Debt | 2,100 | 2,100 | |||||||
Borrowings outstanding against eligible inventory | 1,200 | 1,200 | |||||||
Maximum borrowing capacity | 7,500 | 7,500 | |||||||
$2.0 million, 8% shareholder note due 2017 | Notes Payable, Other Payables | |||||||||
Line of Credit Facility | |||||||||
Face amount of debt | $ 2,000 | $ 2,000 | $ 2,000 | ||||||
Interest rate (as a percent) | 8.00% | 8.00% | 8.00% | ||||||
$0.5 million, 8% convertible director note due 2017 | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Face amount of debt | $ 500 | ||||||||
Interest rate (as a percent) | 8.00% | ||||||||
Liquidity event discount (as a percent) | 25.00% | ||||||||
$0.8 million, 8% senior convertible promissory note due 2016 | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Face amount of debt | $ 800 | $ 800 | |||||||
Interest rate (as a percent) | 8.00% | 8.00% | |||||||
Convertible promissory note | $ 750 | $ 750 | |||||||
Minimum aggregate gross proceeds from Qualified Financing | 5,000 | ||||||||
$0.5 million, 8% convertible promissory note due 2016 | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Convertible promissory note | 500 | 500 | |||||||
Kanis Agreement | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Aggregate principal amount outstanding | $ 7,500 | $ 7,500 | $ 7,500 | ||||||
Liquidity event discount (as a percent) | 25.00% | ||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.6215 | $ 1.6215 | $ 3.60 | ||||||
Common stock issued for exchange of indebtedness (in shares) | shares | 4,872,032 | ||||||||
Amount of debt extinguished | $ 7,900 | ||||||||
Accrued interest and embedded derivative liability | 400 | ||||||||
Loss on extinguishment of debt | $ 11,900 | ||||||||
Bell Note | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Convertible threshold consecutive trading days | 5 days | ||||||||
Bell Exchange Agreement | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Aggregate principal amount outstanding | $ 500 | $ 500 | |||||||
Conversion price (in dollars per share) | $ / shares | $ 1.6215 | $ 1.6215 | |||||||
Common stock issued for exchange of indebtedness (in shares) | shares | 317,950 | ||||||||
Amount of debt extinguished | $ 500 | ||||||||
Loss on extinguishment of debt | $ 600 | ||||||||
Note Purchase Agreement with Haldor Topse | Subordinated Debt | |||||||||
Line of Credit Facility | |||||||||
Face amount of debt | $ 2,000 | $ 2,000 | |||||||
Note Purchase Agreement with Haldor Topse | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 1.6215 | $ 1.6215 | |||||||
Common stock issued for exchange of indebtedness (in shares) | shares | 308,357 | ||||||||
Amount of debt extinguished | $ 500 | ||||||||
Maximum number of shares issuable under convertible debt arrangement | shares | 779,350 | ||||||||
Number of board of directors added | director | 1 | 1 | |||||||
Number of board members designated | director | 1 | 1 | |||||||
Percentage of principal amount of debt to be converted | 100.00% | ||||||||
Minimum ownership percentage | 80.00% | ||||||||
Common Stock | Bell Note | Convertible Debt | |||||||||
Line of Credit Facility | |||||||||
Conversion price (in dollars per share) | $ / shares | $ 3.55 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) $ in Millions | Jul. 22, 2016 | Sep. 30, 2016USD ($)shares | Jul. 21, 2016shares | May 25, 2016shares | Feb. 12, 2016shares | Feb. 11, 2016shares | Dec. 31, 2015shares |
Class of Stock | |||||||
Authorized shares | shares | 20,000,000 | 20,000,000 | 100,000,000 | 24,000,000 | |||
Common stock, shares authorized | shares | 99,900,000 | 19,900,000 | 99,900,000 | 24,000,000 | |||
Preferred stock, shares authorized | shares | 100,000 | 100,000 | 100,000 | 100,000 | |||
Fair value of warrants exercised as an adjustment to additional paid-in capital | $ | $ 1.4 | ||||||
Stock-based compensation expense as an adjustment to additional paid-in capital | $ | 0.8 | ||||||
Conversion of debt into equity as an adjustment of additional paid-in capital | $ | $ 19.2 | ||||||
Common Stock | |||||||
Class of Stock | |||||||
Reverse stock split ratio | 0.20 |
Warrants - Activity (Details)
Warrants - Activity (Details) - $ / shares | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Shares | ||
Outstanding at beginning of period (in shares) | 913,434 | |
Exercised (in shares) | (410,824) | |
Expired (in shares) | (12,216) | |
Outstanding at end of period (in shares) | 490,394 | |
Exercisable at end of period (in shares) | 490,394 | |
Equity classified as warrants | 21,920 | 21,920 |
Weighted Average Exercise Price | ||
Outstanding at beginning of period (in dollars per share) | $ 7.45 | |
Exercised (in dollars per shares) | 1.73 | |
Expired ( in dollars per share) | 22.50 | |
Outstanding at end of period (in dollars per share) | 10.51 | |
Exercisable at end of period (in dollars per share) | 10.51 | |
Range of Exercise Prices | ||
Expired (in dollars per share) | 22.50 | |
Minimum | ||
Range of Exercise Prices | ||
Outstanding at beginning of period (in dollars per share) | 0.05 | |
Exercised (in dollars per share) | 0.05 | |
Outstanding at end of period (in dollars per share) | 6.25 | |
Exercisable (in dollars per share) | 6.25 | |
Maximum | ||
Range of Exercise Prices | ||
Outstanding at beginning of period (in dollars per share) | 22.50 | |
Exercised (in dollars per share) | 3 | |
Outstanding at end of period (in dollars per share) | 21 | |
Exercisable (in dollars per share) | $ 21 |
Warrants - Issued April 4, 2014
Warrants - Issued April 4, 2014 Black Scholes (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 490,394 | 913,434 |
Warrants Issued April 4, 2014, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 79,200 | 132,800 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 21 | $ 21 |
Expected volatility | 111.60% | 94.40% |
Risk-free interest rate | 0.92% | 1.50% |
Expected life in years | 3 years | 3 years 9 months 18 days |
Warrants Issued April 4, 2014, Liability | November 23, 2015 Offering | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 29,600 | 29,600 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 8.50 | $ 8.50 |
Expected volatility | 103.80% | 96.70% |
Risk-free interest rate | 1.10% | 1.60% |
Expected life in years | 3 years 7 months 6 days | 4 years 4 months 24 days |
Warrants - Issued November 4, 2
Warrants - Issued November 4, 2014 Black Scholes (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 490,394 | 913,434 |
Warrants Issued November 4, 2014, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 77,677 | 77,677 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 8.50 | $ 8.50 |
Expected volatility | 105.30% | 96.60% |
Risk-free interest rate | 1.10% | 1.60% |
Expected life in years | 3 years 8 months 12 days | 4 years 4 months 24 days |
Warrants - Issued June 8, 2015
Warrants - Issued June 8, 2015 Black Scholes (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 490,394 | 913,434 |
Warrants Issued June 8, 2015, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 15,999 | 35,999 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 13.25 | $ 13.25 |
Expected volatility | 100.30% | 102.30% |
Risk-free interest rate | 1.20% | 1.70% |
Expected life in years | 4 years 2 months 12 days | 4 years 10 months 24 days |
November 23, 2015 Offering | Warrants Issued June 8, 2015, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 63,999 | 63,999 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 8.50 | $ 8.50 |
Expected volatility | 99.70% | 110.30% |
Risk-free interest rate | 1.30% | 1.80% |
Expected life in years | 4 years 9 months 18 days | 5 years 6 months |
Warrants - Issued November 27,
Warrants - Issued November 27, 2015 Black Scholes (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 490,394 | 913,434 |
Warrants Issued November 27, 2015, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 154,199 | 154,199 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 8.50 | $ 8.50 |
Expected volatility | 99.90% | 96.60% |
Risk-free interest rate | 1.30% | 1.80% |
Expected life in years | 4 years 8 months 12 days | 5 years 6 months |
Warrants - Issued July 3, 2013
Warrants - Issued July 3, 2013 Monte Carlo (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 490,394 | 913,434 |
Warrants Issued July 3, 2013, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 13,000 | 13,000 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 1.62 | $ 6.10 |
Expected volatility | 95.50% | 99.10% |
Risk-free interest rate | 0.74% | 1.20% |
Expected life in years | 1 year 9 months 18 days | 2 years 6 months |
Warrants Issued July 3, 2013, Liability | November 23, 2015 Offering | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 18,800 | 18,800 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 1.62 | $ 6.10 |
Expected volatility | 105.30% | 95.50% |
Risk-free interest rate | 0.90% | 1.50% |
Expected life in years | 3 years 1 month 6 days | 3 years 10 months 24 days |
Warrants - Issued November 11,
Warrants - Issued November 11, 2014 Monte Carlo (Details) - $ / shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 490,394 | 913,434 |
Warrants Issued November 11, 2014, Liability | ||
Fair value assumptions and methodology for assets and liabilities | ||
Number of warrants (in shares) | 16,000 | 16,000 |
CDTi stock price (in dollars per share) | $ 3.61 | $ 4.70 |
Strike price (in dollars per share) | $ 1.62 | $ 6.10 |
Expected volatility | 105.30% | 95.50% |
Risk-free interest rate | 0.90% | 1.50% |
Expected life in years | 3 years 1 month 6 days | 3 years 10 months 24 days |
Fair Value Measurements - Asset
Fair Value Measurements - Assets and Liabilities Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Liabilities measured at fair value on a recurring basis | ||
Warrant liability | $ 965 | $ 3,072 |
Recurring basis | ||
Liabilities measured at fair value on a recurring basis | ||
Liability transfers from Level 1 to Level 2 | 0 | |
Liability transfers from Level 2 to Level 1 | 0 | |
Fair Value, Inputs, Level 3 | Recurring basis | ||
Liabilities measured at fair value on a recurring basis | ||
Warrant liability | $ 965 | $ 3,072 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Warrant Liability (Details) - Warrants - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Reconciliation of warrant liability and embedded derivative | ||
Balance at beginning of period | $ 3,072 | $ 1,474 |
Issuance of common stock warrants | 845 | |
Exercise of common stock warrants | (1,224) | |
Remeasurement of common stock warrants | (883) | (269) |
Balance at end of period | $ 965 | $ 2,050 |
Fair Value Measurements - Rec55
Fair Value Measurements - Reconciliation of Embedded Derivative (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Apr. 01, 2016 | |
Reconciliation of warrant liability and embedded derivative | ||
Fair value of Company's current notes payable | $ 2,750 | |
Kanis Agreement | Convertible Debt | ||
Reconciliation of warrant liability and embedded derivative | ||
Liquidity event discount (as a percent) | 25.00% | |
Embedded Derivative | ||
Reconciliation of warrant liability and embedded derivative | ||
Initial valuation of bifurcated derivative liability | 3,936 | |
Extinguishment of bifurcated derivative liability | $ (3,936) |
Loss per Share (Details)
Loss per Share (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Loss per Share | ||||
Potentially dilutive common stock equivalents excluded from computation (in shares) | 4.8 | 3.4 | 4.3 | 3 |
Commitments and Contingencies -
Commitments and Contingencies - Concentration of Risk (Details) - One automotive OEM customer - customer | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Sales Revenue, Net | Customer Concentration Risk | |||||
Concentration of risk | |||||
Number of customers | 1 | 1 | 1 | 1 | |
Concentration risk percentage | 68.00% | 61.00% | 60.00% | 60.00% | |
Accounts Receivable | Credit Concentration | |||||
Concentration of risk | |||||
Concentration risk percentage | 37.00% | 44.00% |
Commitments and Contingencies58
Commitments and Contingencies - Concentration of Raw Material Purchases (Details) - Cost of Goods, Total - Supplier Concentration Risk | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Vendor A | ||||
Concentration of risk | ||||
Concentration risk percentage | 36.00% | 40.00% | 38.00% | 42.00% |
Vendor B | ||||
Concentration of risk | ||||
Concentration risk percentage | 12.00% | 21.00% | 16.00% |
Commitments and Contingencies59
Commitments and Contingencies - California Air Resources Board ("CARB") (Details) - CARB - USD ($) $ in Millions | Jun. 26, 2015 | Jul. 31, 2016 | Apr. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Loss contingency, estimate | |||||
Calculated penalty for alleged violations | $ 1.8 | $ 0.1 | $ 0.2 | $ 0.8 | |
Amount accrued | $ 0.1 | ||||
Maximum | |||||
Loss contingency, estimate | |||||
Amount accrued | $ 0.1 | ||||
Proposed settlement | $ 0.1 |
Segment Reporting and Geograp60
Segment Reporting and Geographic Information - Number of Segments (Details) - segment | 3 Months Ended | 6 Months Ended |
Sep. 30, 2016 | Jun. 30, 2016 | |
Segment Reporting and Geographic Information | ||
Reportable business division segments | 1 | 2 |
Segment Reporting and Geograp61
Segment Reporting and Geographic Information - Net Sales by Geographic Region based on Location of Sales Organization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Net sales by geographic region | ||||
Revenues | $ 10,132 | $ 9,759 | $ 28,284 | $ 30,038 |
United States | ||||
Net sales by geographic region | ||||
Revenues | 9,440 | 6,127 | 21,830 | 18,770 |
Canada | ||||
Net sales by geographic region | ||||
Revenues | 2,787 | 4,421 | 8,744 | |
Europe | ||||
Net sales by geographic region | ||||
Revenues | 692 | 845 | 2,033 | 2,524 |
International | ||||
Net sales by geographic region | ||||
Revenues | $ 692 | $ 3,632 | $ 6,454 | $ 11,268 |
Discontinued Operations - Appli
Discontinued Operations - Applied Utility Systems, Inc. (Details) - Applied Utility Systems, Inc. - Sales And Use Tax Audit - USD ($) $ in Millions | 1 Months Ended | ||
Oct. 31, 2015 | Jul. 21, 2014 | Dec. 31, 2013 | |
Discontinued Operations | |||
Sales tax owed | $ 0.9 | $ 1.5 | |
Basis for determining sales tax owed | 12.2 | ||
Adjusted basis for determining sales tax owed | $ 9 | ||
Amount offered to settle the case | $ 0.1 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | Nov. 04, 2016USD ($)$ / sharesshares | Nov. 03, 2016USD ($)item$ / sharesshares | Dec. 31, 2016USD ($)$ / sharesshares | Oct. 24, 2016shares | Sep. 30, 2016$ / sharesshares | Jul. 21, 2016shares | Feb. 12, 2016shares | Dec. 31, 2015$ / sharesshares |
Subsequent Events | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||
Common stock, shares authorized | 99,900,000 | 19,900,000 | 99,900,000 | 24,000,000 | ||||
Subsequent Event | ||||||||
Subsequent Events | ||||||||
Common stock, shares authorized | 50,000,000 | |||||||
Common Stock | Subsequent Event | 2016 Omnibus Incentive Plan | ||||||||
Subsequent Events | ||||||||
Number of shares available for issuance | 2,250,000 | |||||||
Private Placement | Common Stock | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Sale of shares (in shares) | 949,960 | 5,172,250 | ||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||
Share price (in dollars per share) | $ / shares | $ 2 | |||||||
Aggregate gross proceeds | $ | $ 1.9 | |||||||
Private Placement | Common Stock | Forecast | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Sale of shares (in shares) | 4,222,290 | |||||||
Aggregate gross proceeds | $ | $ 8.4 | |||||||
Term of warrant (in years) | 5 years | |||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 2.20 | |||||||
Number of shares of common stock issuable to placement agent based on sale of common stock (as a percent) | 10.00% | |||||||
Number of warrants to purchase common stock issuable to placement agent based on sale of common stock (as a percent) | 10.00% | |||||||
Private Placement | Common Stock | MDB Capital Group LLC | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Issue of shares to placement agent for services (in shares) | 94,996 | |||||||
Term of warrant (in years) | 5 years | |||||||
Number of warrants issued (in shares) | 94,996 | |||||||
Exercise price of warrant (in dollars per share) | $ / shares | $ 2.20 | |||||||
Private Placement | Common Stock | Employees and directors | Subsequent Event | ||||||||
Subsequent Events | ||||||||
Number of employees as investors | item | 4 | |||||||
Number of common stock agreed to purchase (in shares) | 277,500 | |||||||
Value of common stock agreed to purchase | $ | $ 0.6 |