☒ |
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
California
(State or other jurisdiction of
incorporation or organization)
|
87-0673375
(I.R.S. Employer Identification No.)
|
|
1330 Lake Robbins Drive, Suite 250
The Woodlands, TX
(Address of Principal Executive Offices)
|
77380
(Zip Code)
|
Large accelerated filer ☐
|
Accelerated filer ☐
|
Non-accelerated filer ☐
|
Smaller reporting company ☒
|
Emerging growth company ☐
|
Title of each class
|
Trading symbol
|
Name of each exchange on which registered
|
||
Common Stock, no par value per share
|
RIBT
|
The NASDAQ Capital Market
|
PART I. FINANCIAL INFORMATION
|
Page
|
||
Item 1.
|
3
|
||
3 | |||
4 |
|||
5 |
|||
6 |
|||
Item 2.
|
22
|
||
Item 3.
|
23
|
||
Item 4.
|
24
|
||
PART II. OTHER INFORMATION
|
|||
Item 1.
|
24
|
||
Item 1A.
|
25
|
||
Item 2.
|
25
|
||
Item 3.
|
25
|
||
Item 4.
|
25
|
||
Item 5.
|
25
|
||
Item 6.
|
25
|
||
26
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Revenues
|
$
|
5,300
|
$
|
3,463
|
$
|
17,883
|
$
|
10,213
|
||||||||
Cost of goods sold
|
5,659
|
2,709
|
18,143
|
7,842
|
||||||||||||
Gross profit (loss)
|
(359
|
)
|
754
|
(260
|
)
|
2,371
|
||||||||||
Selling, general and administrative expenses
|
3,835
|
2,419
|
10,598
|
8,102
|
||||||||||||
Operating loss
|
(4,194
|
)
|
(1,665
|
)
|
(10,858
|
)
|
(5,731
|
)
|
||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
19
|
-
|
42
|
-
|
||||||||||||
Interest expense
|
(9
|
)
|
(2
|
)
|
(40
|
)
|
(5
|
)
|
||||||||
Other income
|
859
|
52
|
865
|
61
|
||||||||||||
Other expense
|
(1
|
)
|
(12
|
)
|
(5
|
)
|
(25
|
)
|
||||||||
Total other income (expense), net
|
868
|
38
|
862
|
31
|
||||||||||||
Loss before income taxes
|
(3,326
|
)
|
(1,627
|
)
|
(9,996
|
)
|
(5,700
|
)
|
||||||||
Income tax benefit
|
-
|
-
|
-
|
-
|
||||||||||||
Loss from continuing operations
|
(3,326
|
)
|
(1,627
|
)
|
(9,996
|
)
|
(5,700
|
)
|
||||||||
Loss from discontinued operations
|
-
|
-
|
(216
|
)
|
-
|
|||||||||||
Net loss
|
$
|
(3,326
|
)
|
$
|
(1,627
|
)
|
$
|
(10,212
|
)
|
$
|
(5,700
|
)
|
||||
Basic loss per common share:
|
||||||||||||||||
Continuing operations
|
$
|
(0.10
|
)
|
$
|
(0.07
|
)
|
$
|
(0.31
|
)
|
$
|
(0.28
|
)
|
||||
Discontinued operations
|
-
|
-
|
(0.01
|
)
|
-
|
|||||||||||
Basic loss per common share
|
$
|
(0.10
|
)
|
$
|
(0.07
|
)
|
$
|
(0.32
|
)
|
$
|
(0.28
|
)
|
||||
Diluted loss per common share:
|
||||||||||||||||
Continuing operations
|
$
|
(0.10
|
)
|
$
|
(0.07
|
)
|
$
|
(0.31
|
)
|
$
|
(0.28
|
)
|
||||
Discontinued operations
|
-
|
-
|
(0.01
|
)
|
-
|
|||||||||||
Diluted loss per common share
|
$
|
(0.10
|
)
|
$
|
(0.07
|
)
|
$
|
(0.32
|
)
|
$
|
(0.28
|
)
|
||||
Weighted average number of shares outstanding:
|
||||||||||||||||
Basic
|
33,057,010
|
24,092,172
|
31,947,087
|
20,538,309
|
||||||||||||
Diluted
|
33,057,010
|
24,092,172
|
31,947,087
|
20,538,309
|
September 30,
2019
|
December 31,
2018
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
3,690
|
$
|
7,044
|
||||
Restricted cash
|
-
|
225
|
||||||
Accounts receivable, net of allowance for doubtful accounts of $63 and $14
|
3,138
|
2,529
|
||||||
Receivable from sellers of Golden Ridge - working capital adjustment to purchase price
|
-
|
1,147
|
||||||
Inventories
|
||||||||
Finished goods
|
680
|
853
|
||||||
Raw materials
|
85
|
3
|
||||||
Packaging
|
78
|
102
|
||||||
Other current assets
|
750
|
610
|
||||||
Total current assets
|
8,421
|
12,513
|
||||||
Property and equipment, net
|
19,249
|
15,010
|
||||||
Operating lease right-of-use assets
|
2,826
|
-
|
||||||
Goodwill
|
3,915
|
3,178
|
||||||
Intangible assets
|
942
|
16
|
||||||
Other long-term assets
|
26
|
-
|
||||||
Total assets
|
$
|
35,379
|
$
|
30,717
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
1,331
|
$
|
1,583
|
||||
Commodities payable
|
272
|
2,735
|
||||||
Accrued salary, wages and benefits
|
962
|
933
|
||||||
Accrued expenses
|
1,033
|
520
|
||||||
Customer prepayments
|
-
|
145
|
||||||
Payable to purchaser of HN - working capital adjustment to purchase price
|
-
|
259
|
||||||
Margin loan
|
1,225
|
-
|
||||||
Note payable to seller of Golden Ridge
|
-
|
609
|
||||||
Operating lease liabilities, current portion
|
302
|
-
|
||||||
Finance lease liabilities, current portion
|
100
|
45
|
||||||
Long term debt, current portion
|
21
|
32
|
||||||
Total current liabilities
|
5,246
|
6,861
|
||||||
Operating lease liabilities, less current portion
|
2,737
|
-
|
||||||
Finance lease liabilities, less current portion
|
218
|
86
|
||||||
Long term debt, less current portion
|
42
|
59
|
||||||
Total liabilities
|
8,243
|
7,006
|
||||||
Commitments and contingencies
|
||||||||
Shareholders' Equity:
|
||||||||
Preferred stock, 20,000,000 shares authorized: Series G, convertible, 3,000 shares authorized, 225 shares and 405 shares, issued and outstanding
|
112
|
201
|
||||||
Common stock, no par value, 50,000,000 shares authorized, 33,109,222 shares and 29,098,207 shares, issued and outstanding
|
310,465
|
296,739
|
||||||
Accumulated deficit
|
(283,441
|
)
|
(273,229
|
)
|
||||
Total shareholders' equity
|
27,136
|
23,711
|
||||||
Total liabilities and shareholders' equity
|
$
|
35,379
|
$
|
30,717
|
Nine Months Ended
|
||||||||
2019
|
2018
|
|||||||
Cash flow from operating activities:
|
||||||||
Net loss
|
$
|
(10,212
|
)
|
$
|
(5,700
|
)
|
||
Loss from discontinued operations
|
216
|
-
|
||||||
Loss from continuing operations
|
(9,996
|
)
|
(5,700
|
)
|
||||
Adjustments to reconcile net loss from continuing operations to net cash used in operating activities:
|
||||||||
Depreciation
|
1,332
|
499
|
||||||
Amortization
|
39
|
45
|
||||||
Stock and share-based compensation
|
925
|
650
|
||||||
Settlement with sellers of Golden Ridge
|
(849
|
)
|
-
|
|||||
Other
|
166
|
75
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(215
|
)
|
(236
|
)
|
||||
Inventories
|
388
|
42
|
||||||
Accounts payable and accrued expenses
|
(43
|
)
|
(56
|
)
|
||||
Commodities payable
|
(1,896
|
)
|
-
|
|||||
Other
|
(308
|
)
|
(17
|
)
|
||||
Net cash used in operating activities
|
(10,457
|
)
|
(4,698
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Acquisition of MGI
|
(3,767
|
)
|
-
|
|||||
Purchases of property and equipment
|
(3,513
|
)
|
(2,384
|
)
|
||||
Disbursements of notes receivable
|
-
|
(400
|
)
|
|||||
Net cash used in investing activities - continuing operations
|
(7,280
|
)
|
(2,784
|
)
|
||||
Net cash used in investing activities - discontinued operations
|
(475
|
)
|
-
|
|||||
Cash flows from financing activities:
|
||||||||
Proceeds from issuance of common stock and pre-funded warrant, net of issuance costs
|
11,593
|
-
|
||||||
Proceeds from common stock warrant exercises
|
1,990
|
11,003
|
||||||
Proceeds from common stock option exercises
|
156
|
27
|
||||||
Proceeds from margin loan
|
1,225
|
-
|
||||||
Payments of debt and finance lease liabilities
|
(331
|
)
|
(2
|
)
|
||||
Net cash provided by financing activities
|
14,633
|
11,028
|
||||||
Net change in cash and cash equivalents and restricted cash
|
$
|
(3,579
|
)
|
$
|
3,546
|
|||
Cash and cash equivalents and restricted cash, beginning of period
|
||||||||
Cash and cash equivalents
|
$
|
7,044
|
$
|
6,203
|
||||
Restricted cash
|
225
|
775
|
||||||
Cash and cash equivalents and restricted cash, beginning of period
|
7,269
|
6,978
|
||||||
Cash and cash equivalents and restricted cash, end of period
|
||||||||
Cash and cash equivalents
|
3,690
|
10,299
|
||||||
Restricted cash
|
-
|
225
|
||||||
Cash and cash equivalents and restricted cash, end of period
|
3,690
|
10,524
|
||||||
Net change in cash and cash equivalents and restricted cash
|
$
|
(3,579
|
)
|
$
|
3,546
|
|||
Supplemental disclosures:
|
||||||||
Cash paid for interest
|
$
|
40
|
$
|
3
|
||||
Cash paid for income taxes
|
$
|
-
|
$
|
-
|
Estimated at
Acquisition and as of
December 31, 2018 |
Adjustments
|
Estimated as of
September 30, 2019
|
||||||||||
1,666,667 shares of common stock, at fair value of $3.00 per share at closing
|
$
|
5,000
|
$
|
-
|
$
|
5,000
|
||||||
Golden Ridge financial liabilities paid for the seller
|
2,661
|
-
|
2,661
|
|||||||||
Cash
|
250
|
-
|
250
|
|||||||||
Note payable to seller
|
609
|
-
|
609
|
|||||||||
Working capital adjustment to purchase price
|
(1,147
|
)
|
584
|
(563
|
)
|
|||||||
Total fair value of consideration transferred
|
7,373
|
584
|
7,957
|
|||||||||
Cash
|
409
|
(63
|
)
|
346
|
||||||||
Accounts receivable
|
1,587
|
87
|
1,674
|
|||||||||
Inventories
|
103
|
-
|
103
|
|||||||||
Property and equipment
|
5,092
|
-
|
5,092
|
|||||||||
Accounts payable
|
(222
|
)
|
110
|
(112
|
)
|
|||||||
Commodities payable
|
(2,559
|
)
|
432
|
(2,127
|
)
|
|||||||
Accrued liabilities
|
(12
|
)
|
12
|
-
|
||||||||
Lease liabilities
|
(104
|
)
|
-
|
(104
|
)
|
|||||||
Equipment notes payable
|
(99
|
)
|
6
|
(93
|
)
|
|||||||
Net recognized amounts of identifiable assets acquired and liabilities assumed
|
4,195
|
584
|
4,779
|
|||||||||
Goodwill
|
$
|
3,178
|
$
|
-
|
$
|
3,178
|
Estimated at
June 30, 2019
|
Adjustments
|
Estimated at
September 30,
2019
|
||||||||||
Cash
|
$
|
3,795
|
$
|
3,795
|
||||||||
Working capital adjustment to purchase price
|
(38
|
)
|
10
|
(28
|
)
|
|||||||
Total fair value of consideration transferred
|
3,757
|
10
|
3,767
|
|||||||||
Accounts receivable
|
591
|
591
|
||||||||||
Inventories
|
149
|
149
|
||||||||||
Deposits and other current assets
|
4
|
(2
|
)
|
2
|
||||||||
Property and equipment
|
1,560
|
1,560
|
||||||||||
Customer relationship
|
930
|
930
|
||||||||||
Other finite-lived intangible assets
|
35
|
35
|
||||||||||
Accounts payable
|
(219
|
)
|
(219
|
)
|
||||||||
Finance lease liabilities
|
(18
|
)
|
-
|
(18
|
)
|
|||||||
Net recognized amounts of identifiable assets acquired and liabilities assumed
|
3,032 |
(2
|
)
|
3,030
|
||||||||
Goodwill
|
$
|
725
|
$
|
12
|
$
|
737
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Revenues
|
$
|
5,300
|
$
|
4,110
|
$
|
19,083
|
$
|
12,360
|
||||||||
Loss from continuing operations
|
$
|
(3,326
|
)
|
$
|
(1,568
|
)
|
$
|
(9,865
|
)
|
$
|
(5,497
|
)
|
||||
Loss per share - continuing operations
|
$
|
(0.09
|
)
|
$
|
(0.07
|
)
|
$
|
(0.31
|
)
|
$
|
(0.27
|
)
|
||||
Weighted average number of common shares outstanding - basic and diluted
|
33,057,010
|
24,092,172
|
31,947,087
|
20,538,309
|
A |
|
B
|
|
C |
|
|||||||
% of Revenues, three months ended September 30, 2019
|
10
|
%
|
13
|
%
|
11
|
%
|
||||||
% of Revenues, three months ended September 30, 2018
|
NA
|
19
|
%
|
17
|
%
|
|||||||
% of Revenues, nine months ended September 30, 2019
|
14
|
%
|
11
|
%
|
10
|
%
|
||||||
% of Revenues, nine months ended September 30, 2018
|
NA
|
27
|
%
|
22
|
%
|
|||||||
% of Accounts Receivable, as of September 30, 2019
|
18
|
%
|
15
|
%
|
9
|
%
|
||||||
% of Accounts Receivable, as of December 31, 2018
|
16
|
%
|
13
|
%
|
NA
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
United States
|
$
|
5,046
|
$
|
3,132
|
$
|
16,959
|
$
|
9,244
|
||||||||
Other countries
|
254
|
331
|
924
|
969
|
||||||||||||
Revenues
|
$
|
5,300
|
$
|
3,463
|
$
|
17,883
|
$
|
10,213
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Food
|
$
|
3,573
|
$
|
1,926
|
$
|
12,685
|
$
|
5,657
|
||||||||
Animal nutrition
|
1,727
|
1,537
|
5,198
|
4,556
|
||||||||||||
Revenues
|
$
|
5,300
|
$
|
3,463
|
$
|
17,883
|
$
|
10,213
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Vendor 1
|
6
|
%
|
12
|
%
|
4
|
%
|
12
|
%
|
||||||||
Vendor 2
|
3
|
%
|
12
|
%
|
3
|
%
|
9
|
%
|
||||||||
Others
|
91
|
%
|
76
|
%
|
93
|
%
|
79
|
%
|
||||||||
Total
|
100
|
%
|
100
|
%
|
100
|
%
|
100
|
%
|
September 30
2019 |
December 31
2018 |
Estimated Useful Lives
|
|||||||
Land
|
$
|
730
|
$
|
585
|
|||||
Furniture and fixtures
|
476
|
430
|
5-10 years
|
||||||
Plant
|
9,654
|
8,613
|
20-40 years, or life of lease
|
||||||
Computer and software
|
1,317
|
1,295
|
3-5 years
|
||||||
Leasehold improvements
|
2,019
|
681
|
4-15 years, or life of lease
|
||||||
Machinery and equipment
|
16,485
|
13,528
|
5-15 years
|
||||||
Property and equipment, cost
|
30,681
|
25,132
|
|||||||
Less accumulated depreciation
|
11,432
|
10,122
|
|||||||
Property and equipment, net
|
$
|
19,249
|
$
|
15,010
|
Three Months Ended
|
Nine Months Ended
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Goodwill, beginning of period
|
$
|
3,903
|
$
|
-
|
$
|
3,178
|
$
|
-
|
||||||||
MGI acquistion
|
12
|
-
|
737
|
-
|
||||||||||||
Goodwill, end of period
|
$
|
3,915
|
$
|
-
|
$
|
3,915
|
$
|
-
|
September 30, 2019
|
December 31, 2018
|
|||||||||||||||||||||||||||
Estimated
Useful Life
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
Carrying
Value
|
Gross
Carrying
Value
|
Accumulated
Amortization
|
Net
Carrying
Value
|
||||||||||||||||||||||
Customer Relationships
|
15
|
$
|
930
|
$
|
31
|
$
|
899
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||||||||||||
Trademarks
|
10
|
13
|
1
|
12
|
-
|
-
|
-
|
|||||||||||||||||||||
Non-compete agreement
|
5
|
22
|
2
|
20
|
-
|
-
|
-
|
|||||||||||||||||||||
Other
|
17
|
32
|
21
|
11
|
32
|
16
|
16
|
|||||||||||||||||||||
Total intangible assets
|
$
|
997
|
$
|
55
|
$
|
942
|
$
|
32
|
$
|
16
|
$
|
16
|
September 30, 2019
|
||||||||
Three Months
Ended
|
Nine Months
Ended
|
|||||||
Finance lease cost:
|
||||||||
Amortization of right-of use assets, included in cost of goods sold
|
$
|
19
|
$
|
50
|
||||
Interest on lease liabilities
|
5
|
10
|
||||||
Operating lease cost, included in selling, general and administrative expenses:
|
||||||||
Fixed leases cost
|
131
|
392
|
||||||
Variable lease cost
|
35
|
99
|
||||||
Short-term lease cost, included in cost of goods sold
|
13
|
29
|
||||||
Total lease cost
|
$
|
203
|
$
|
580
|
||||
Cash paid for amounts included in the measurement of lease liabilities:
|
||||||||
Operating cash flows from finance leases
|
$
|
5
|
$
|
10
|
||||
Operating cash flows from operating leases
|
$
|
131
|
$
|
392
|
||||
Financing cash flows from finance leases
|
$
|
23
|
$
|
54
|
Operating
Leases
|
Finance
Leases
|
|||||||
Remaining leases terms (in years)
|
0.5-13.4
|
1.3-4.8
|
||||||
Weighted average remaining lease terms (in years)
|
7.9
|
3.5
|
||||||
Discount rates
|
4.9%-9.0
|
%
|
4.3%-7.3
|
%
|
||||
Weighted average discount rate
|
7.6
|
%
|
5.8
|
%
|
Operating
Leases
|
Finance
Leases
|
|||||||
2019 (three months ended December 31, 2019)
|
$
|
114
|
$
|
33
|
||||
2020
|
525
|
115
|
||||||
2021
|
536
|
91
|
||||||
2022
|
548
|
68
|
||||||
2023
|
528
|
38
|
||||||
Thereafter
|
1,897
|
11
|
||||||
Total lease payments
|
4,148
|
356
|
||||||
Amounts representing interest
|
(1,109
|
)
|
(38
|
)
|
||||
Present value of lease obligations
|
$
|
3,039
|
$
|
318
|
Operating
Leases
|
Finance
Leases
|
|||||||
2019
|
$
|
519
|
$
|
51
|
||||
2020
|
525
|
51
|
||||||
2021
|
536
|
33
|
||||||
2022
|
548
|
5
|
||||||
2023
|
528
|
-
|
||||||
Thereafter
|
1,897
|
-
|
||||||
Total minimum lease payments
|
$
|
4,553
|
$
|
140
|
||||
Amounts representing interest
|
(9
|
)
|
||||||
Present value of minimum payments
|
$
|
131
|
Shares
|
||||||||||||||||||||||||
Preferred
Series G |
Common
|
Preferred
Stock |
Common
Stock |
Accumulated
Deficit |
Equity
|
|||||||||||||||||||
Balance, December 31, 2018
|
405
|
29,098,207
|
$
|
201
|
$
|
296,739
|
$
|
(273,229
|
)
|
$
|
23,711
|
|||||||||||||
Sale of common stock and Prefunded Warrant, net of costs
|
-
|
3,046,668
|
-
|
11,593
|
-
|
11,593
|
||||||||||||||||||
Common stock awards under equity incentive plans
|
-
|
36,881
|
-
|
364
|
-
|
364
|
||||||||||||||||||
Exercise of common stock warrants
|
-
|
600,000
|
-
|
1,980
|
-
|
1,980
|
||||||||||||||||||
Conversion of preferred stock into common stock
|
(180
|
)
|
170,818
|
(89
|
)
|
89
|
-
|
-
|
||||||||||||||||
Exercise of common stock options
|
-
|
77,078
|
-
|
60
|
-
|
60
|
||||||||||||||||||
Other
|
-
|
-
|
-
|
28
|
-
|
28
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,227
|
)
|
(3,227
|
)
|
||||||||||||||||
Balance, March 31, 2019
|
225
|
33,029,652
|
112
|
310,853
|
(276,456
|
)
|
34,509
|
|||||||||||||||||
Exercise of Prefunded Warrant
|
-
|
1,003,344
|
-
|
10
|
-
|
10
|
||||||||||||||||||
Common stock awards under equity incentive plans
|
-
|
134,984
|
-
|
219
|
-
|
219
|
||||||||||||||||||
Exercise of common stock options
|
-
|
78,734
|
-
|
87
|
-
|
87
|
||||||||||||||||||
Other
|
-
|
-
|
-
|
32
|
-
|
32
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,659
|
)
|
(3,659
|
)
|
||||||||||||||||
Balance, June 30, 2019
|
225
|
34,246,714
|
112
|
311,201
|
(280,115
|
)
|
31,198
|
|||||||||||||||||
Retirement of unvested shares
|
-
|
(830,124
|
)
|
-
|
-
|
-
|
-
|
|||||||||||||||||
Common stock awards under equity incentive plans
|
-
|
22,632
|
-
|
282
|
-
|
282
|
||||||||||||||||||
Exercise of common stock options
|
-
|
10,000
|
-
|
9
|
-
|
9
|
||||||||||||||||||
Retirement of shares received in settlement with the sellers of Golden Ridge
|
-
|
(340,000
|
)
|
-
|
(1,027
|
)
|
-
|
(1,027
|
)
|
|||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(3,326
|
)
|
(3,326
|
)
|
||||||||||||||||
Balance, September 30, 2019
|
225
|
33,109,222
|
$
|
112
|
$
|
310,465
|
$
|
(283,441
|
)
|
$
|
27,136
|
Shares
|
||||||||||||||||||||||||
Preferred
Series G |
Common
|
Preferred
Stock |
Common
Stock |
Accumulated
Deficit |
Equity
|
|||||||||||||||||||
Balance, December 31, 2017
|
630
|
18,046,731
|
$
|
313
|
$
|
279,548
|
$
|
(265,128
|
)
|
$
|
14,733
|
|||||||||||||
Common stock awards under equity incentive plans
|
-
|
78,377
|
-
|
245
|
-
|
245
|
||||||||||||||||||
Exercise of common stock warrants
|
-
|
1,827,999
|
-
|
1,755
|
-
|
1,755
|
||||||||||||||||||
Other
|
-
|
-
|
-
|
75
|
-
|
75
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,913
|
)
|
(1,913
|
)
|
||||||||||||||||
Balance, March 31, 2018
|
630
|
19,953,107
|
313
|
281,623
|
(267,041
|
)
|
14,895
|
|||||||||||||||||
Common stock awards under equity incentive plans
|
-
|
208,829
|
-
|
148
|
-
|
148
|
||||||||||||||||||
Exercise of common stock warrants
|
-
|
4,092,077
|
-
|
3,928
|
-
|
3,928
|
||||||||||||||||||
Other
|
-
|
-
|
-
|
23
|
-
|
23
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(2,160
|
)
|
(2,160
|
)
|
||||||||||||||||
Balance, June 30, 2018
|
630
|
24,254,013
|
313
|
285,722
|
(269,201
|
)
|
16,834
|
|||||||||||||||||
Common stock awards under equity incentive plans
|
-
|
7,188
|
-
|
141
|
-
|
141
|
||||||||||||||||||
Exercise of common stock warrants
|
-
|
2,799,392
|
-
|
5,320
|
-
|
5,320
|
||||||||||||||||||
Exercise of common stock options
|
-
|
32,500
|
-
|
27
|
-
|
27
|
||||||||||||||||||
Other
|
-
|
-
|
-
|
18
|
-
|
18
|
||||||||||||||||||
Net loss
|
-
|
-
|
-
|
-
|
(1,627
|
)
|
(1,627
|
)
|
||||||||||||||||
Balance, September 30, 2018
|
630
|
27,093,093
|
$
|
313
|
$
|
291,228
|
$
|
(270,828
|
)
|
$
|
20,713
|
2019
|
2018
|
|||||||||||||||||||||||
Shares
Issued
|
Grant
Date Fair
Value Per
Share
|
Vesting
Period
(Years)
|
Shares
Issued
|
Grant Date
Fair Value
Per Share
|
Vesting
Period
(Years)
|
|||||||||||||||||||
Three Months Ended March 31
|
||||||||||||||||||||||||
Directors
|
30,887
|
$
|
3.22
|
1.0
|
50,469
|
$
|
1.38
|
1.0
|
||||||||||||||||
Consultant
|
5,994
|
$
|
3.48
|
-
|
27,908
|
$
|
1.42
|
-
|
||||||||||||||||
36,881
|
78,377
|
|||||||||||||||||||||||
Three Months Ended June 30
|
||||||||||||||||||||||||
Directors
|
118,111
|
$
|
2.86
|
1.0
|
208,829
|
$
|
1.78
|
1.0
|
||||||||||||||||
Consultant
|
16,873
|
$
|
2.86
|
1.0
|
-
|
NA
|
NA
|
|||||||||||||||||
134,984
|
208,829
|
|||||||||||||||||||||||
Three Months Ended September 30
|
||||||||||||||||||||||||
Directors
|
15,290
|
$
|
2.82
|
0.9
|
-
|
NA
|
NA
|
|||||||||||||||||
Consultant
|
7,342
|
$
|
2.69
|
-
|
7,188
|
$
|
2.83
|
-
|
||||||||||||||||
22,632
|
7,188
|
2019
|
2018
|
|||||||||||||||||||||||||||||||
Shares
Under
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Grant
Date Fair
Value
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
Shares
Under
Options
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Grant
Date Fair
Value
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|||||||||||||||||||||||||
Outstanding at January 1
|
950,727
|
$
|
3.06
|
8.5
|
639,658
|
$
|
8.83
|
7.2
|
||||||||||||||||||||||||
Granted (1)
|
188,662
|
3.25
|
$
|
2.05
|
10.0
|
278,873
|
1.42
|
$
|
0.97
|
10.0
|
||||||||||||||||||||||
Cash exercised
|
(77,078
|
)
|
0.78
|
7.7
|
-
|
NA
|
NA
|
|||||||||||||||||||||||||
Forfeited
|
(25,548
|
)
|
5.66
|
5.3
|
(2,047
|
)
|
5.02
|
8.0
|
||||||||||||||||||||||||
Outstanding at March 31
|
1,036,763 |
3.20
|
8.6
|
916,484
|
2.45
|
8.7
|
||||||||||||||||||||||||||
Granted (1)
|
98,221
|
3.04
|
$
|
1.84
|
10.0
|
-
|
NA
|
NA
|
NA
|
|||||||||||||||||||||||
Cash exercised (2)
|
(78,734
|
)
|
1.10
|
8.2
|
-
|
NA
|
NA
|
|||||||||||||||||||||||||
Forfeited
|
(133,016
|
)
|
2.92
|
0.3
|
(23,964
|
)
|
1.21
|
9.4
|
||||||||||||||||||||||||
Outstanding at June 30
|
923,234
|
3.40
|
8.4
|
892,520
|
2.49
|
8.4
|
||||||||||||||||||||||||||
Granted (1)
|
99,000
|
2.53
|
$
|
1.40
|
10.0
|
-
|
NA
|
NA
|
NA
|
|||||||||||||||||||||||
Cash exercised
|
(10,000
|
)
|
0.85
|
7.6
|
(32,500
|
)
|
0.85
|
8.6
|
||||||||||||||||||||||||
Forfeited
|
(13,450
|
)
|
11.42
|
4.7
|
(109,854
|
)
|
1.61
|
8.7
|
||||||||||||||||||||||||
Outstanding at September 30
|
998,784
|
$
|
3.23
|
8.4
|
750,166
|
$
|
2.69
|
8.1
|
(1) |
The options granted vest and become exercisable in annual or monthly installments ending four years from the date of grant.
|
(2) |
Includes options for 31,955 shares of common stock at a weighted average exercise price of $1.16 per share for which we accelerated vesting upon termination of employment for an employee in June of 2019. We expensed $0.1 million of
incremental expense upon acceleration of vesting.
|
2019
|
2018
|
|||||||||||||||||||||||
RSU Shares
Issued to
Employees
|
Unrecognized
Stock
Compensation
(in thousands)
|
Weighted
Average
Expense
Period
(Years)
|
RSU Shares
Issued to
Employees
|
Unrecognized
Stock
Compensation
(in thousands)
|
Weighted
Average
Expense
Period
(Years)
|
|||||||||||||||||||
Nonvested at January 1
|
1,215,000
|
$
|
683
|
2.3
|
1,175,000
|
$
|
161
|
3.0
|
||||||||||||||||
Cancelled
|
-
|
-
|
(705,000
|
)
|
(31
|
)
|
||||||||||||||||||
Expensed
|
-
|
(77
|
)
|
(11
|
)
|
|||||||||||||||||||
Nonvested at March 31
|
1,215,000
|
606
|
2.0
|
470,000
|
119
|
2.8
|
||||||||||||||||||
Granted
|
132,062
|
107
|
2.3
|
-
|
-
|
|||||||||||||||||||
Forfeited
|
(250,000
|
)
|
(155
|
)
|
(170,000
|
)
|
(30
|
)
|
||||||||||||||||
Expensed
|
-
|
(66
|
)
|
-
|
(11
|
)
|
||||||||||||||||||
Nonvested at June 30
|
1,097,062
|
492
|
1.9
|
300,000
|
78
|
2.5
|
||||||||||||||||||
Granted
|
81,000
|
38
|
2.7
|
-
|
-
|
|||||||||||||||||||
Forfeited
|
-
|
-
|
(130,000
|
)
|
(39
|
)
|
||||||||||||||||||
Expensed
|
-
|
(70
|
)
|
-
|
(4
|
)
|
||||||||||||||||||
Nonvested at September 30
|
1,178,062
|
$
|
460
|
1.7
|
170,000
|
$
|
35
|
2.3
|
2019
|
2018
|
|||||||||||||||||||||||||||||||
Shares
Granted
|
Weighted
Average
Grant
Date Fair
Value Per
Share
|
Fair Value
|
Unrecog-
nized
Stock Comp-
ensation
|
Shares
Granted
|
Weighted
Average
Grant
Date Fair
Value Per
Share
|
Fair Value
|
Unrecog-
nized
Stock Comp-
ensation
|
|||||||||||||||||||||||||
(1)
|
(2)
|
(1)
|
(2)
|
|||||||||||||||||||||||||||||
Nonvested at January 1
|
193,965
|
$
|
1.84
|
$
|
582
|
$
|
173
|
384,744
|
$
|
0.94
|
$
|
569
|
$
|
176
|
||||||||||||||||||
Granted
|
-
|
NA
|
NA
|
-
|
NA
|
NA
|
||||||||||||||||||||||||||
Vested
|
-
|
NA
|
NA
|
-
|
NA
|
NA
|
||||||||||||||||||||||||||
Nonvested at March 31
|
193,965
|
1.84
|
722
|
81
|
384,744
|
0.94
|
315
|
80
|
||||||||||||||||||||||||
Granted to directors
|
118,111
|
2.86
|
338
|
208,875
|
1.78
|
372
|
||||||||||||||||||||||||||
Granted to consultants
|
16,873
|
2.86
|
48
|
-
|
NA
|
NA
|
||||||||||||||||||||||||||
Vested
|
(193,965
|
)
|
1.84
|
566
|
(384,744
|
)
|
0.94
|
686
|
||||||||||||||||||||||||
Nonvested at June 30 (3)
|
134,984
|
2.86
|
393
|
374
|
208,875
|
1.78
|
451
|
360
|
||||||||||||||||||||||||
Granted to directors
|
15,290
|
2.82
|
43
|
-
|
NA
|
NA
|
||||||||||||||||||||||||||
Vested
|
-
|
NA
|
NA
|
-
|
NA
|
NA
|
||||||||||||||||||||||||||
Nonvested at September 30
|
150,274
|
$
|
2.86
|
$
|
383
|
$
|
313
|
208,875
|
$
|
1.78
|
$
|
599
|
$
|
267
|
(1) |
Represents pre-tax fair value, based on our closing stock prices, which would have been received by the holders of the stock had all such holders sold their underlying shares on the date indicated, the dates of grant or the dates of
vesting, as applicable.
|
(2) |
As of September 30, 2019 and 2018, unrecognized compensation is amortizing over a remaining period of 0.7 years.
|
(3) |
Excluded 830,104 shares, issued to a supplier, nonvested and unearned as of June 30, 2019. In February 2016, we issued 950,000 shares of common stock to that supplier. The shares were being held in escrow until earned (as defined in
our agreement) by the supplier at a fixed price of $2.80 per share. Cumulatively, as of September 30, 2019, 119,896 shares were released from escrow. We recalled and retired the shares remaining in escrow, after the related supply
agreement terminated in August 2019. During the three months ended June 30, 2019 and March 31, 2019, we released from escrow and expensed the value of 11,492 and 9,148 shares earned by a vendor, at $2.92 per share, the fair value of the
shares on January 1, 2019, when we adopted ASU 2018-07. During the three months ended June 30, 2018 and March 31, 2018, we released from escrow and expensed the value of 10,660 shares ($2.16 per share) and 9,842 ($1.57 per share) shares
earned by that vendor. The shares released from escrow in 2018 were valued at the fair value of the shares when earned, under the guidance for nonemployee awards in effect in 2018, prior to our adoption of ASU 2018-07.
|
2019
|
2018
|
|||||||||||||||||||||||
Shares Under
Warrants
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
Shares
Under
Warrants
|
Weighted
Average
Exercise
Price
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|||||||||||||||||||
(1)
|
||||||||||||||||||||||||
Outstanding at January 1
|
10,252,714
|
$
|
2.25
|
2.3
|
21,157,273
|
$
|
2.30
|
3.4
|
||||||||||||||||
Issued (2)
|
-
|
NA
|
NA
|
315,000
|
4.73
|
2.4
|
||||||||||||||||||
Cash exercised
|
(600,000
|
)
|
3.30
|
-
|
(1,827,999
|
)
|
0.96
|
4.1
|
||||||||||||||||
Expired
|
(950,614
|
)
|
5.25
|
-
|
-
|
NA
|
NA
|
|||||||||||||||||
Outstanding at March 31
|
8,702,100
|
1.85
|
2.4
|
19,644,274
|
2.47
|
3.0
|
||||||||||||||||||
Cash exercised
|
-
|
NA
|
NA
|
(4,092,077
|
)
|
0.96
|
3.7
|
|||||||||||||||||
Expired
|
(989,875
|
)
|
5.60
|
-
|
(6,000
|
)
|
16.80
|
-
|
||||||||||||||||
Outstanding at June 30
|
7,712,225
|
1.37
|
2.4
|
15,546,197
|
2.86
|
2.5
|
||||||||||||||||||
Cash exercised
|
-
|
NA
|
NA
|
(2,660,000
|
)
|
2.00
|
3.0
|
|||||||||||||||||
Cashless exercised (3)
|
-
|
NA
|
NA
|
(300,000
|
)
|
1.60
|
1.8
|
|||||||||||||||||
Impact of modification (4):
|
||||||||||||||||||||||||
After modification
|
-
|
NA
|
NA
|
600,000
|
3.30
|
0.6
|
||||||||||||||||||
Prior to modification
|
-
|
NA
|
NA
|
(850,000
|
)
|
5.27
|
1.6
|
|||||||||||||||||
Expired
|
-
|
NA
|
NA
|
(2,573
|
)
|
16.00
|
-
|
|||||||||||||||||
Outstanding at September 30 (5)
|
7,712,225
|
$
|
1.37
|
2.2
|
12,333,624
|
$
|
2.93
|
2.2
|
(1) |
Under the terms of certain outstanding warrants, the holders may elect to exercise the warrants under a cashless exercise feature. As of September 30, 2019, warrant holders may elect to exercise cashless warrants for 3,774,344 shares
of common stock at an exercise price of $0.96 per share and 384,536 shares of common stock at an average exercise price of $5.25 per share. If we register for resale the shares subject to warrants, the holders of some of the warrants may
no longer have the right to elect a cashless exercise. If we fail to maintain a registration statement for the resale of shares under certain other warrants, the shares under those warrants may again become exercisable using a cashless
exercise feature.
|
(2) |
We recognized $0.1 million of expense for these warrant issuances in the three months ended June 30, 2018.
|
(3) |
We issued 139,392 shares of common stock upon cashless exercise of these warrants, based on the fair value at the date of exercise of $2.63 per share.
|
(4) |
The fair value of the warrants immediately before the modification equaled the fair value of the warrants immediately after the modification and, therefore, no gain or loss was recorded.
|
(5) |
In October 2019, warrants for the purchase of up to 94,536 shares of common stock at an exercise price of $5.27 per share expired and warrants for the purchase of up to 85,409 shares of common stock at an
exercise price of $0.96 per share were cash exercised.
|
Three Months Ended September 30
|
Nine Months Ended September 30
|
|||||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
NUMERATOR (in thousands):
|
||||||||||||||||
Basic and diluted - loss from continuing operations
|
$
|
(3,326
|
)
|
$
|
(1,627
|
)
|
$
|
(9,996
|
)
|
$
|
(5,700
|
)
|
||||
DENOMINATOR:
|
||||||||||||||||
Basic EPS - weighted average number of common shares outstanding
|
33,057,010
|
24,092,172
|
31,947,087
|
20,538,309
|
||||||||||||
Effect of dilutive securities outstanding
|
-
|
-
|
-
|
-
|
||||||||||||
Diluted EPS - weighted average number of shares outstanding
|
33,057,010
|
24,092,172
|
31,947,087
|
20,538,309
|
||||||||||||
|
||||||||||||||||
Number of shares of common stock which could be purchased with weighted average outstanding securities not included in diluted EPS because effect would be antidilutive:
|
||||||||||||||||
Stock options
|
969,566
|
790,950
|
1,034,218
|
843,910
|
||||||||||||
Warrants
|
7,712,225
|
14,421,219
|
8,744,733
|
17,840,322
|
||||||||||||
Convertible preferred stock
|
213,523
|
597,865
|
228,540
|
597,865
|
||||||||||||
Restricted stock units
|
1,138,442
|
178,478
|
1,263,275
|
428,132
|
||||||||||||
Weighted average number of nonvested shares of common stock not included in diluted EPS because effect would be antidilutive
|
475,567
|
1,079,079
|
848,699
|
1,198,913
|
● |
Level 1 – inputs include quoted prices for identical instruments and are the most observable.
|
● |
Level 2 – inputs include quoted prices for similar assets and observable inputs such as interest rates, currency exchange rates and yield curves.
|
● |
Level 3 – inputs are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability.
|
Three Months Ended September 30
|
Change
|
Nine Months Ended September 30
|
Change
|
|||||||||||||||||||||
2019
|
2018
|
%
|
2019
|
2018
|
%
|
|||||||||||||||||||
(in thousands)
|
(in thousands)
|
|||||||||||||||||||||||
Revenues
|
$
|
5,300
|
$
|
3,463
|
53.0
|
$
|
17,883
|
$
|
10,213
|
75.1
|
||||||||||||||
Cost of goods sold
|
5,659
|
2,709
|
(108.9
|
)
|
18,143
|
7,842
|
(131.4
|
)
|
||||||||||||||||
Gross profit (loss)
|
(359
|
)
|
754
|
(260
|
)
|
2,371
|
||||||||||||||||||
Gross profit (loss) %
|
-6.8
|
%
|
21.8
|
%
|
-1.5
|
%
|
23.2
|
%
|
||||||||||||||||
Selling, general and administrative expenses
|
3,835
|
2,419
|
(58.5
|
)
|
10,598
|
8,102
|
(30.8
|
)
|
||||||||||||||||
Loss from operations
|
(4,194
|
)
|
(1,665
|
)
|
(151.9
|
)
|
(10,858
|
)
|
(5,731
|
)
|
(89.5
|
)
|
||||||||||||
Other income (expense), net
|
868
|
38
|
862
|
31
|
||||||||||||||||||||
Loss from continuing operations
|
$
|
(3,326
|
)
|
$
|
(1,627
|
)
|
$
|
(9,996
|
)
|
$
|
(5,700
|
)
|
Incorporated by Reference
|
||||||||||||
Exhibit
Number
|
Exhibit Description
|
Form
|
File No.
|
Exhibit
Number
|
Filing/Effective
Date
|
Filed
Here-
with
|
||||||
Amendment to Bylaws, effective July 30, 2019
|
8-K
|
001-36245
|
3.1
|
August 5, 2019
|
||||||||
Certification by CEO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||||||||||
Certification by CFO pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
X
|
|||||||||||
Certification by CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
X
|
|||||||||||
101.INS (1)
|
XBRL Instance Document
|
X
|
||||||||||
101.SCH (1)
|
XBRL Taxonomy Extension Schema Document
|
X
|
||||||||||
101.CAL (1)
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
X
|
||||||||||
101.DEF (1)
|
XBRL Taxonomy Extension Calculation Definition Linkbase Document
|
X
|
||||||||||
101.LAB (1)
|
XBRL Taxonomy Extension Calculation Label Linkbase Document
|
X
|
||||||||||
101.PRE (1)
|
XBRL Taxonomy Extension Calculation Presentation Linkbase Document
|
X
|
(1) |
XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed
for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
Dated: November 7, 2019
|
||
/s/ Brent R. Rystrom
|
||
Brent R. Rystrom
|
||
Director and Chief Executive Officer
|
/s/ Todd T. Mitchell
|
||
Todd T. Mitchell
|
||
Chief Financial Officer
|