QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____________ to _____________ |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) | ||||||||
(Zip Code) | ||||||||
(Registrant’s telephone number, including area code): | ||||||||
None | ||||||||
(Former name, former address and former fiscal year, if changed since last report) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | ||||||||
☑ | Smaller reporting company | ||||||||||
Emerging growth company |
PART I - FINANCIAL INFORMATION | |||||||||||
Page | |||||||||||
ITEM 1. | FINANCIAL STATEMENTS | ||||||||||
a. | Condensed Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and December 31, 2019 | ||||||||||
b. | Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019 (Unaudited) | ||||||||||
c. | Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019 (Unaudited) | ||||||||||
d. | Condensed Consolidated Statements of Changes in Stockholders' Equity for the three and nine months ended September 30, 2020 and 2019 (Unaudited) | ||||||||||
e. | Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019 (Unaudited) | ||||||||||
f. | Notes to the Condensed Consolidated Financial Statements (Unaudited) | ||||||||||
ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS | ||||||||||
ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | ||||||||||
ITEM 4. | CONTROLS AND PROCEDURES | ||||||||||
PART II - OTHER INFORMATION | |||||||||||
ITEM 1. | LEGAL PROCEEDINGS | ||||||||||
ITEM 1A. | RISK FACTORS | ||||||||||
ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS | ||||||||||
ITEM 3. | DEFAULTS UPON SENIOR SECURITIES | ||||||||||
ITEM 4. | MINE SAFETY DISCLOSURES | ||||||||||
ITEM 5. | OTHER INFORMATION | ||||||||||
ITEM 6. | EXHIBITS | ||||||||||
SIGNATURES |
September 30, 2020 | December 31, 2019 | ||||||||||
(Unaudited) | |||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash | $ | $ | |||||||||
Trade accounts receivable, less allowances of $ | |||||||||||
Inventories, net | |||||||||||
Prepaid and other current assets | |||||||||||
Total current assets | |||||||||||
Property and equipment, net | |||||||||||
Operating lease, right-of-use asset | |||||||||||
Restructured lease, right-of-use asset | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
LIABILITIES | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | $ | |||||||||
Accrued liabilities | |||||||||||
Accrued legal and professional fees | |||||||||||
Accrued payroll and related benefits | |||||||||||
Accrued sales commissions | |||||||||||
Accrued restructuring | |||||||||||
Accrued warranty reserve | |||||||||||
Deferred revenue | |||||||||||
Operating lease liabilities | |||||||||||
Restructured lease liabilities | |||||||||||
Finance lease liabilities | |||||||||||
Warrant liability | |||||||||||
Convertible notes | |||||||||||
Iliad Note, net of discount and loan origination fees | |||||||||||
PPP loan | |||||||||||
Credit line borrowings, net of loan origination fees | |||||||||||
Total current liabilities | |||||||||||
Other liabilities | |||||||||||
Operating lease liabilities, net of current portion | |||||||||||
Restructured lease liabilities, net of current portion | |||||||||||
Finance lease liabilities, net of current portion | |||||||||||
PPP loan, net of current maturities | |||||||||||
Iliad Note, net of current maturities | |||||||||||
Total liabilities | |||||||||||
STOCKHOLDERS' EQUITY | |||||||||||
Preferred stock, par value $ | |||||||||||
Authorized: | |||||||||||
Issued and outstanding: | |||||||||||
Common stock, par value $ | |||||||||||
Authorized: | |||||||||||
Issued and outstanding: | |||||||||||
Additional paid-in capital | |||||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Accumulated deficit | ( | ( | |||||||||
Total stockholders' equity | |||||||||||
Total liabilities and stockholders' equity | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Product development | |||||||||||||||||||||||
Selling, general, and administrative | |||||||||||||||||||||||
Restructuring | ( | ( | ( | ||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Loss from operations | ( | ( | ( | ( | |||||||||||||||||||
Other expenses (income): | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Loss on extinguishment of debt | |||||||||||||||||||||||
(Gain) loss from change in fair value of warrants | ( | ||||||||||||||||||||||
Other expenses | |||||||||||||||||||||||
Loss before income taxes | ( | ( | ( | ( | |||||||||||||||||||
Benefit from income taxes | ( | ( | |||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Net loss per share - basic and diluted | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Weighted average shares of common stock outstanding: | |||||||||||||||||||||||
Basic and diluted * | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Other comprehensive loss: | |||||||||||||||||||||||
Foreign currency translation adjustments | ( | ||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares* | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2019 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock option and stock purchase plans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock and warrants | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Offering costs on issuance of common stock and warrants | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Warrant liability | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Conversion of notes to preferred stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net loss for the three months ended March 31, 2020 | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock option and stock purchase plans | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of warrants | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon conversion from preferred stock | ( | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Net loss for the three months ended June 30, 2020 | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
Balance at June 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock option and stock purchase plans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon the exercise of warrants | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
Net loss for the three months ended September 30, 2020 | — | — | — | — | — | $ | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||
Balance at September 30, 2020 | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||||||||
Shares* | Amount | |||||||||||||||||||||||||||||||||||||
Balance at December 31, 2018 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Adjustment to beginning retained earnings upon adoption of | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Issuance of common stock under employee stock option and stock purchase plans | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | ( | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss for the three months ended March 31, 2019 | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2019 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Issuance of common stock under employee stock option and stock purchase plans | — | — | — | — | — | |||||||||||||||||||||||||||||||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Net loss for the three months ended June 30, 2019 | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2019 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss for the three months ended September 30, 2019 | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance at September 30, 2019 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Cash flows from operating activities: | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
Depreciation | |||||||||||
Stock-based compensation | |||||||||||
Change in fair value of warrant liabilities | |||||||||||
Provision for doubtful accounts receivable | ( | ||||||||||
Provision for slow-moving and obsolete inventories | ( | ( | |||||||||
Provision for warranties | |||||||||||
Amortization of loan discounts and origination fees | |||||||||||
Loss on dispositions of property and equipment | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Accounts receivable | ( | ||||||||||
Inventories | |||||||||||
Prepaid and other assets | ( | ||||||||||
Accounts payable | ( | ||||||||||
Accrued and other liabilities | ( | ||||||||||
Deferred revenue | ( | ||||||||||
Total adjustments | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisitions of property and equipment | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from the issuance of common stock and warrants | |||||||||||
Proceeds from the exercise of warrants | |||||||||||
Offering costs paid on the issuance of common stock and warrants | ( | ||||||||||
Proceeds from PPP loan | |||||||||||
Principal payments under finance lease obligations | ( | ( | |||||||||
Proceeds from exercise of stock options and employee stock purchase plan purchases | |||||||||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | ( | ( | |||||||||
Payments on the Iliad Note | ( | ||||||||||
Payments for Deferred Financing & Termination Fees | ( | ||||||||||
Net proceeds from (payment on) credit line borrowings - AFS | ( | ( | |||||||||
Net proceeds from (payment on) credit line borrowings - New Facilities | |||||||||||
Proceeds from convertible notes | |||||||||||
Net cash provided by financing activities | |||||||||||
Effect of exchange rate changes on cash | ( | ||||||||||
Net increase (decrease) in cash and restricted cash | ( | ||||||||||
Cash and restricted cash, beginning of period | |||||||||||
Cash and restricted cash, end of period | $ | $ | |||||||||
Classification of cash and restricted cash: | |||||||||||
Cash | $ | $ | |||||||||
Restricted cash held in other assets | |||||||||||
Cash and restricted cash | $ | $ |
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||||||||||||
Net sales: | ||||||||||||||||||||||||||
Commercial | $ | $ | $ | $ | ||||||||||||||||||||||
MMM products | ||||||||||||||||||||||||||
Total net sales | $ | $ | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Numerator: | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Denominator: | |||||||||||||||||||||||
Basic weighted average shares of common stock outstanding * | |||||||||||||||||||||||
* Shares outstanding for prior periods have been restated for the 1-for-5 stock split effective June 11, 2020. | |||||||||||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Balance at beginning of period | $ | $ | $ | $ | |||||||||||||||||||
Warranty accruals for current period sales | |||||||||||||||||||||||
Adjustments to existing warranties | |||||||||||||||||||||||
In kind settlements made during the period | ( | ( | ( | ( | |||||||||||||||||||
Accrued warranty reserve at end of period | $ | $ | $ | $ |
Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities. | ||||
Level 2 | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability. | ||||
Level 3 | Unobservable inputs for the asset or liability. |
Fair Value Measurements at September 30, 2020 Using | |||||||||||||||||||||||
Balance as of | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | ||||||||||||||||||||
Description | September 30, 2020 | ||||||||||||||||||||||
Warrant liability | $ | $ | $ | $ |
Expected | Risk-Free | Expected | |||||||||||||||
Volatility | Interest Rate | Life | |||||||||||||||
Warrants with greater than one-year remaining term |
Nine months ended September 30, 2020 | |||||
Balance January 1, 2020 | $ | ||||
Issuance of warrants, January 2020 | |||||
Settlements from exercise | ( | ||||
Loss from change in fair value of warrants | |||||
Balance September 30, 2020 | $ |
Restructuring Liability | |||||
Balance at December 31, 2019 | $ | ||||
Accretion of lease obligations | |||||
Payments | ( | ||||
Balance at September 30, 2020 | |||||
Restructuring Liability | |||||
Balance at September 30, 2020 | $ | ||||
Less, short-term restructuring liability | |||||
Long-term restructuring liability, included in other liabilities | $ |
Nine months ended September 30, 2020 | Twelve months ended December 31, 2019 | ||||||||||
Raw materials | $ | $ | |||||||||
Finished goods | |||||||||||
Reserves for excess, obsolete, and slow-moving inventories | ( | ( | |||||||||
Inventories, net | $ | $ |
Nine months ended September 30, 2020 | Twelve months ended December 31, 2019 | ||||||||||
Beginning balance | $ | ( | $ | ( | |||||||
Accrual | ( | ( | |||||||||
Reduction due to sold inventory | |||||||||||
Write-off for disposed inventory | |||||||||||
Reserves for excess, obsolete, and slow-moving inventories | $ | ( | $ | ( |
September 30, 2020 | December 31, 2019 | ||||||||||
Equipment (useful life | $ | $ | |||||||||
Tooling (useful life | |||||||||||
Vehicles (useful life | |||||||||||
Furniture and fixtures (useful life | |||||||||||
Computer software (useful life | |||||||||||
Leasehold improvements (the shorter of useful life or lease life) | |||||||||||
Finance lease right-of-use asset | |||||||||||
Projects in progress | |||||||||||
Property and equipment at cost | |||||||||||
Less: accumulated depreciation | ( | ( | |||||||||
Property and equipment, net | $ | $ |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||||||||
Operating lease cost (income) | |||||||||||||||||||||||||||||
Sub-lease income | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||
Lease cost | |||||||||||||||||||||||||||||
Operating lease cost, net | |||||||||||||||||||||||||||||
Restructured lease cost (income) | |||||||||||||||||||||||||||||
Sub-lease income | ( | ( | ( | ( | |||||||||||||||||||||||||
Lease cost | |||||||||||||||||||||||||||||
Restructured lease income, net | ( | ( | ( | ( | |||||||||||||||||||||||||
Finance lease cost | |||||||||||||||||||||||||||||
Interest of lease liabilities | |||||||||||||||||||||||||||||
Finance lease cost, net | |||||||||||||||||||||||||||||
Total lease cost, net | $ | $ | $ | $ | |||||||||||||||||||||||||
September 30, 2020 | December 31, 2019 | ||||||||||
Operating Leases | |||||||||||
Operating lease right-of-use assets | $ | $ | |||||||||
Restructured lease right-of-use assets | |||||||||||
Operating lease right-of-use assets, total | |||||||||||
Operating lease liabilities | |||||||||||
Restructured lease liabilities | |||||||||||
Operating lease liabilities, total | |||||||||||
Finance Leases | |||||||||||
Property and equipment | |||||||||||
Allowances for depreciation | ( | ( | |||||||||
Finance lease assets, net | |||||||||||
Finance lease liabilities | |||||||||||
Total finance lease liabilities | $ | $ | |||||||||
Operating Leases | Restructured Leases | Restructured Leases Sub-lease Payments | Finance Lease | ||||||||||||||
October 2020 to September 2021 | $ | $ | $ | ( | $ | ||||||||||||
October 2021 to September 2022 | |||||||||||||||||
October 2022 to September 2023 | |||||||||||||||||
October 2023 to September 2024 | |||||||||||||||||
Total future undiscounted lease payments | ( | ||||||||||||||||
Less imputed interest | ( | ( | |||||||||||||||
Total lease obligations | $ | $ | $ | ( | $ |
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Supplemental cash flow information | |||||||||||
Cash paid, net, for amounts included in the measurement of lease liabilities: | |||||||||||
Operating cash flows from operating leases | $ | $ | |||||||||
Operating cash flows from restructured leases | $ | $ | |||||||||
Financing cash flows from finance leases | $ | $ |
Number of Underlying Shares | Exercise Price | Expiration | |||||||||||||||
Investor Warrants | $ | January 13, 2025 | |||||||||||||||
Placement Agent Warrants | $ | January 13, 2025 | |||||||||||||||
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Cost of sales | $ | $ | $ | $ | |||||||||||||||||||
Product development | |||||||||||||||||||||||
Selling, general, and administrative | |||||||||||||||||||||||
Total stock-based compensation | $ | $ | $ | $ |
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Fair value of options issued | $ | $ | |||||||||
Exercise price | $ | $ | |||||||||
Expected life of options (in years) | |||||||||||
Risk-free interest rate | % | % | |||||||||
Expected volatility | % | % | |||||||||
Dividend yield | % | % | |||||||||
*Options have been restated for the 1-for-5 reverse stock split effective June 11, 2020. |
Number of Options* | Weighted Average Exercise Price Per Share | Weighted Average Remaining Contractual Life (in years) | |||||||||||||||
Balance at December 31, 2019 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Canceled/forfeited | ( | ||||||||||||||||
Balance at September 30, 2020 | $ | ||||||||||||||||
Vested and expected to vest at September 30, 2020 | $ | ||||||||||||||||
Exercisable at September 30, 2020 | $ | ||||||||||||||||
*Options have been restated for the 1-for-5 reverse stock split effective June 11, 2020. |
Restricted Stock Units* | Weighted Average Grant Date Fair Value | Weighted Average Remaining Contractual Life (in years) | |||||||||||||||
Balance at December 31, 2019 | $ | ||||||||||||||||
Granted | |||||||||||||||||
Vested | ( | ||||||||||||||||
Canceled/forfeited | ( | ||||||||||||||||
Balance at September 30, 2020 | $ | ||||||||||||||||
*Restricted stock units have been restated for the 1-for-5 reverse stock split effective June 11, 2020. |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||||||||||||||
Cost of sales | 76.9 | 64.7 | 71.3 | 88.9 | |||||||||||||||||||
Gross profit | 23.1 | 35.3 | 28.7 | 11.1 | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Product development | 6.7 | 6.6 | 7.6 | 11.3 | |||||||||||||||||||
Selling, general, and administrative | 33.6 | 57.9 | 45.9 | 60.2 | |||||||||||||||||||
Restructuring | (0.3) | (0.7) | (0.3) | 2.6 | |||||||||||||||||||
Total operating expenses | 40.0 | 63.8 | 53.2 | 74.1 | |||||||||||||||||||
Loss from operations | (16.9) | (28.5) | (24.5) | (63.0) | |||||||||||||||||||
Other expenses (income): | |||||||||||||||||||||||
Interest expense | 2.1 | 2.3 | 2.6 | 1.5 | |||||||||||||||||||
Loss on extinguishment of debt | 2.7 | — | 1.2 | — | |||||||||||||||||||
(Gain) loss from change in fair value of warrants | (2.6) | — | 17.4 | — | |||||||||||||||||||
Other expenses | 0.4 | 1.6 | 0.5 | 1.6 | |||||||||||||||||||
Net income before income taxes | |||||||||||||||||||||||
Benefit from income taxes | — | — | — | — | |||||||||||||||||||
Net loss | (19.5) | % | (32.4) | % | (46.2) | % | (66.1) | % |
Three months ended September 30, | Nine months ended September 30, | ||||||||||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||||||||||
Commercial | $ | 1,456 | $ | 1,733 | $ | 4,250 | $ | 5,847 | |||||||||||||||
MMM products | 4,508 | 1,182 | 8,832 | 3,327 | |||||||||||||||||||
Total net sales | $ | 5,964 | $ | 2,915 | $ | 13,082 | $ | 9,174 |
Nine months ended September 30, | |||||||||||
2020 | 2019 | ||||||||||
Net cash used in operating activities | $ | (1,583) | $ | (6,329) | |||||||
Net cash used in investing activities | $ | (171) | $ | (57) | |||||||
Net cash provided by financing activities | $ | 3,978 | $ | 686 |
Exhibit Number | Description of Documents | ||||
3.1 | |||||
3.2 | |||||
3.3 | |||||
3.4 | |||||
3.5 | |||||
3.6 | |||||
3.7 | |||||
3.8 | |||||
3.9 | |||||
3.10 | |||||
3.11 | |||||
3.12 | |||||
3.13 | |||||
10.1 | |||||
10.2# | |||||
10.3 | |||||
10.4 | |||||
10.5 | |||||
10.6 | |||||
10.7 | |||||
31.1+ | |||||
31.2+ | |||||
32.1++ | |||||
*101 | The following financial information from our Quarterly Report for the quarter ended September 30, 2020, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019, (ii) Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019, (iii) Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019, (iv) Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019, (v) Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019, and (vi) the Notes to Condensed Consolidated Financial Statements. | ||||
*104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
ENERGY FOCUS, INC. | |||||||||||
Date: | November 12, 2020 | By: | /s/ James Tu | ||||||||
James Tu | |||||||||||
Executive Chairman and Chief Executive Officer | |||||||||||
(Principal Executive Officer) |
Date: | November 12, 2020 | By: | /s/ Tod A. Nestor | ||||||||
Tod A. Nestor | |||||||||||
President and Chief Financial Officer | |||||||||||
(Principal Financial and Accounting Officer) |
/s/ James Tu | |||||||||||
James Tu Chairman and Chief Executive Officer | |||||||||||
Date: | November 12, 2020 | ||||||||||
/s/ Tod A. Nestor | |||||||||||
Tod A. Nestor President and Chief Financial Officer | |||||||||||
Date: | November 12, 2020 | ||||||||||
Condensed Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Trade accounts receivable, less allowances | $ 10 | $ 28 |
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, authorized (in shares) | 5,000,000 | 2,000,000 |
Preferred Stock, Shares Issued | 2,597,470 | 0 |
Preferred stock, outstanding (in shares) | 2,597,470 | 0 |
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 50,000,000 | 30,000,000 |
Common stock, issued (in shares) | 3,428,268 | 2,485,684 |
Common stock, outstanding (in shares) | 3,428,268 | 2,485,684 |
Series A Convertible Preferred Stock | ||
Preferred stock, authorized (in shares) | 3,300,000 | 0 |
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Income Statement [Abstract] | ||||||
Net sales | $ 5,964 | $ 2,915 | $ 13,082 | $ 9,174 | ||
Cost of sales | 4,588 | 1,887 | 9,331 | 8,157 | ||
Gross profit | 1,376 | 1,028 | 3,751 | 1,017 | ||
Operating expenses: | ||||||
Product development | 401 | 191 | 996 | 1,035 | ||
Selling, general, and administrative | 2,003 | 1,689 | 6,003 | 5,524 | ||
Restructuring | (16) | (19) | (44) | 243 | ||
Total operating expenses | 2,388 | 1,861 | 6,955 | 6,802 | ||
Loss from operations | (1,012) | (833) | (3,204) | (5,785) | ||
Other expenses (income): | ||||||
Interest expense | 124 | 67 | 344 | 136 | ||
Loss on extinguishment of debt | 159 | 0 | 159 | 0 | ||
(Gain) loss from change in fair value of warrants | (153) | 0 | 2,274 | 0 | ||
Other expenses | 25 | 46 | 67 | 144 | ||
Loss before income taxes | (1,167) | (946) | (6,048) | (6,065) | ||
Benefit from income taxes | (2) | 0 | (2) | 0 | ||
Net loss | $ (1,165) | $ (946) | $ (6,046) | $ (6,065) | ||
Net loss per share - basic and diluted | ||||||
Net loss (in usd per share) | $ (0.35) | $ (0.38) | $ (1.89) | $ (2.47) | ||
Weighted average shares of common stock outstanding: | ||||||
Basic and diluted (in shares) | [1] | 3,308 | 2,474 | 3,196 | 2,455 | |
|
Condensed Consolidated Statements of Operations (Unaudited) (Parenthetical) |
9 Months Ended | |
---|---|---|
Jun. 02, 2020 |
Sep. 30, 2020 |
|
Statement of Financial Position [Abstract] | ||
Reverse stock split ratio | 0.2 | 0.2 |
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (1,165) | $ (946) | $ (6,046) | $ (6,065) |
Other comprehensive loss: | ||||
Foreign currency translation adjustments | 0 | 0 | 0 | (2) |
Comprehensive loss | $ (1,165) | $ (946) | $ (6,046) | $ (6,067) |
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) (Parenthetical) |
9 Months Ended | |
---|---|---|
Jun. 02, 2020 |
Sep. 30, 2020 |
|
Statement of Financial Position [Abstract] | ||
Reverse stock split ratio | 0.2 | 0.2 |
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Cash flows from operating activities: | ||
Net loss | $ (6,046) | $ (6,065) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 140 | 277 |
Stock-based compensation | 96 | 557 |
Change in fair value of warrant liabilities | 2,274 | 0 |
Provision for doubtful accounts receivable | (21) | 20 |
Provision for slow-moving and obsolete inventories | (229) | (643) |
Provision for warranties | 34 | 107 |
Amortization of loan discounts and origination fees | 221 | 72 |
Loss on dispositions of property and equipment | 0 | 15 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (1,070) | 400 |
Inventories | 1,138 | 1,301 |
Prepaid and other assets | (471) | 368 |
Accounts payable | 1,811 | (2,311) |
Accrued and other liabilities | 453 | (421) |
Deferred revenue | 87 | (6) |
Total adjustments | 4,463 | (264) |
Net cash used in operating activities | (1,583) | (6,329) |
Cash flows from investing activities: | ||
Acquisitions of property and equipment | (171) | (57) |
Net cash used in investing activities | (171) | (57) |
Cash flows from financing activities: | ||
Proceeds from the issuance of common stock and warrants | 2,749 | 0 |
Proceeds from the exercise of warrants | 676 | 0 |
Offering costs paid on the issuance of common stock and warrants | (474) | 0 |
Proceeds from PPP loan | 795 | 0 |
Principal payments under finance lease obligations | (3) | (2) |
Proceeds from exercise of stock options and employee stock purchase plan purchases | 30 | 0 |
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | (3) | (116) |
Payments on the Iliad Note | (976) | 0 |
Payments for Deferred Financing & Termination Fees | (320) | 0 |
Proceeds from convertible notes | 0 | 1,700 |
Net cash provided by financing activities | 3,978 | 686 |
Effect of exchange rate changes on cash | 0 | (1) |
Net increase (decrease) in cash and restricted cash | 2,224 | (5,701) |
Cash and restricted cash, beginning of period | 692 | 6,335 |
Cash and restricted cash, end of period | 2,916 | 634 |
Classification of cash and restricted cash: | ||
Cash and restricted cash | 2,916 | 634 |
Austin Credit Facility | ||
Cash flows from financing activities: | ||
Net proceeds from (payment on) credit line borrowings | (719) | (896) |
New Credit Facilities | ||
Cash flows from financing activities: | ||
Net proceeds from (payment on) credit line borrowings | $ 2,223 | $ 0 |
Nature of Operations |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS Energy Focus, Inc. (“we”, “us”, “our” or “the Company”) engages in the design, development, manufacturing, marketing and sale of energy-efficient lighting systems and controls and recently announced development of ultraviolet light disinfection (“ UVCD”) products. We develop, market and sell high quality light-emitting diode (“LED”) lighting products and UVCD products and controls in the commercial and military maritime markets (“MMM”). Our mission is to enable our customers to run their facilities and offices with greater energy efficiency, productivity, and wellness through advanced LED retrofit and UVCD solutions. Our goal is to be the LED and human-centric lighting (“HCL”) technology and market leader for the most demanding applications where performance, quality and health are considered paramount. We specialize in LED lighting retrofit by replacing fluorescent, high-intensity discharge lighting and other types of lamps in institutional buildings for primarily indoor lighting applications with our innovative, high-quality commercial and military tubular LED (“TLED”), as well as other LED and lighting control products. On June 11, 2020, in accordance with previous stockholder approval, our Board of Directors effected a 1-for-5 (the “Split Ratio”) reverse stock split of the Company’s common stock, par value $0.0001 per share. The reverse stock split became effective immediately upon the filing of the Certificate of Amendment to the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), with the Delaware Secretary of State (the “Effective Time”). At the Effective Time, every five shares of common stock issued and outstanding automatically combined into one validly issued, fully paid and non-assessable share of common stock. No fractional shares were issued as a result of the reverse stock split. The $0.0001 par value per share of common stock and other terms of the common stock were not affected by the reverse stock split. The number of authorized shares of common stock under the Certificate of Incorporation remained unchanged at 50,000,000 shares. Proportional adjustments were made to the conversion and exercise prices of our outstanding warrants and stock options, and to the number of shares issued and issuable under our stock incentive plans in connection with the reverse stock split. The current financial statements as well as prior period financial statements have been retroactively adjusted to reflect the reverse stock split. Preferred shares outstanding were not affected by the reverse stock split and, as such, those shares have not been adjusted.
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Basis of Presentation and Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary organized in Taiwan during 2019. All significant inter-company balances and transactions have been eliminated. Unless indicated otherwise, the information in the Notes to the Consolidated Financial Statements relates to our operations. We have prepared the accompanying financial data for the three and nine months ended September 30, 2020 and 2019 pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report”). The Condensed Consolidated Balance Sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly our Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019, Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019, Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019. Use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may vary from the estimates. Estimates include, but are not limited to, the establishment of reserves for accounts receivable, sales returns, inventory obsolescence and warranty claims; the useful lives of property and equipment; valuation allowance for net deferred taxes; the cost and offsetting income related to sub-leased property; and stock-based compensation. In addition, estimates and assumptions associated with the determination of the fair value of financial instruments and evaluation of long-lived assets for impairment requires considerable judgment. Actual results could differ from those estimates and such differences could be material. Certain risks and concentrations We have certain customers whose net sales individually represented 10% or more of our total net sales, or whose net trade accounts receivable balance individually represented 10% or more of our total net trade accounts receivable; we have certain suppliers, which individually represent 10% or more of our total purchases, or whose trade accounts payable balance individually represented 10% or more of our total trade accounts payable balance, as follows: For the three months ended September 30, 2020, sales to our primary distributor for the U.S. Navy and a regional commercial lighting retrofit company accounted for approximately 67% and 12% of net sales, respectively. When sales to our primary distributor for the U.S. Navy are combined with sales to shipbuilders for the U.S. Navy, total net sales of products for the U.S. Navy comprised approximately 68% of net sales for the same period. For the three months ended September 30, 2019, sales to our primary distributor for the U.S. Navy, a regional commercial lighting retrofit company and a global healthcare provider accounted for approximately 27%, 14% and 15% of net sales, respectively. When sales to our primary distributor for the U.S. Navy are combined with sales to a shipbuilder for the U.S. Navy, total net sales of products for the U.S. Navy comprised approximately 30% of net sales for the same period. For the nine months ended September 30, 2020, sales to our primary distributor for the U.S. Navy and a regional commercial lighting retrofit company accounted for approximately 52% and 14% of net sales, respectively. When sales to our primary distributor for the U.S. Navy are combined with sales to shipbuilders for the U.S. Navy, total net sales of products for the U.S. Navy comprised approximately 58% of net sales for the same period. For the nine months ended September 30, 2019, sales to our primary distributor for the U.S. Navy and a regional commercial lighting retrofit company accounted for approximately 20% and 23% of net sales for the same period. When sales to our primary distributor for the U.S. Navy are combined with sales to a shipbuilder for the U.S. Navy, total net sales of products for the U.S. Navy comprised approximately 27% of net sales for the same period. Our primary distributor for the U.S. Navy accounted for approximately 73% and 10% of net trade accounts receivable, respectively, at September 30, 2020 and December 31, 2019. A large regional retrofit company accounted for 41% of our net trade accounts receivable at December 31, 2019. Two offshore suppliers accounted for approximately 25% and 20%, respectively, of our total expenditures for the three months ended September 30, 2020. These same two suppliers accounted for approximately 19% and 14%, respectively, of our total expenditures for the nine months ended September 30, 2020. At September 30, 2020, these offshore suppliers accounted for approximately 24% and 35% of our trade accounts payable balance. For the three and nine months ended September 30, 2019, one offshore supplier accounted for approximately 18% and 20% total purchases, respectively. This same offshore supplier accounted for approximately, 36.7% of our trade accounts payable balance at September 30, 2019. One domestic supplier accounted for approximately 16% of our trade accounts payable balance at September 30, 2019. Recent accounting pronouncements In June 2016, the Financial Accounting Standards Board issued Accounting Standard Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which significantly changes the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables, and requires an entity to recognize an allowance based on its estimate of expected credit losses rather than incurred losses. For smaller reporting companies, this standard will be effective for interim and annual periods starting after December 15, 2022 and will generally require adoption on a modified retrospective basis. We are in the process of evaluating the impact of the standard. Revenue Net sales include revenues from sales of products and shipping and handling charges, net of estimates for product returns. Revenue is measured at the amount of consideration we expect to receive in exchange for the transferred products. We recognize revenue at the point in time when we transfer the promised products to the customer and the customer obtains control over the products. Distributors’ obligations to us are not contingent upon the resale of our products. We recognize revenue for shipping and handling charges at the time the goods are shipped to the customer, and the costs of outbound freight are included in cost of sales. We provide for product returns based on historical return rates. While we incur costs for sales commissions to our sales employees and outside agents, we recognize commission costs concurrent with the related revenue, as the amortization period is less than one year. We do not incur any other incremental costs to obtain contracts with our customers. Our product warranties are assurance-type warranties, which promise the customer that the products are as specified in the contract. Therefore, the product warranties are not a separate performance obligation and are accounted for as described below. Sales taxes assessed by governmental authorities are accounted for on a net basis and are excluded from net sales. The following table provides a disaggregation of product net sales for the periods presented (in thousands):
Accounts Receivable Our trade accounts receivable consist of amounts billed to and currently due from customers. Our customers are concentrated in the United States. In the normal course of business, we extend unsecured credit to our customers related to the sale of our products. Credit is extended to customers based on an evaluation of the customer’s financial condition and the amounts due are stated at their estimated net realizable value. During the first eleven months of 2019, we evaluated and monitored the creditworthiness of each customer on a case-by-case basis. However, during December 2019, we transitioned to an account receivable insurance program with a high credit worthy insurance company where we have the large majority of the accounts receivable insured with a portion of self-retention. This third party also provides creditworthiness ratings and metrics that significantly assist us in evaluating the creditworthiness of both existing and new customers. We maintain allowances for sales returns and doubtful accounts receivable to provide for the estimated number of accounts receivable that will not be collected. The allowance is based on an assessment of customer creditworthiness and historical payment experience, the age of outstanding receivables, and performance guarantees to the extent applicable. Past due amounts are written off when our internal collection efforts have been unsuccessful, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. We do not generally require collateral from our customers. Our standard payment terms with customers are net 30 days from the date of shipment, and we do not generally offer extended payment terms to our customers, but exceptions are made in some cases to certain customers or with particular orders. Accordingly, we do not adjust trade accounts receivable for the effects of financing, as we expect the period between the transfer of product to the customer and the receipt of payment from the customer to be in line with our standard payment terms. Geographic information All of our long-lived fixed assets are located in the United States. There were no net sales attributable to customers outside the United States for both the three and nine months ended September 30, 2020. There were no net sales attributable to customers outside the United States for the three months ended September 30, 2019 and less than 1% for the nine months ended September 30, 2019. The geographic location of our net sales is derived from the destination to which we ship the product. Net loss per share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share gives effect to all dilutive potential shares of common stock outstanding during the period. Dilutive potential shares of common stock consist of incremental shares upon the exercise of stock options, warrants and convertible securities, unless the effect would be anti-dilutive. The following table presents a reconciliation of basic and diluted loss per share computations (in thousands):
As a result of the net loss we incurred for the three months ended September 30, 2020, options, restricted share units, warrants and convertible securities representing approximately 117 thousand, 13 thousand, 321 thousand and 519 thousand shares of common stock, respectively, were excluded from the basic loss per share calculation, because their inclusion would have been anti-dilutive. As a result of the net loss we incurred for the nine months ended September 30, 2020, options, restricted share units, warrants and convertible securities representing approximately 57 thousand, 7 thousand, 152 thousand and 531 thousand shares of common stock, respectively, were excluded from the basic loss per share calculation, because of this same reason. As a result of the net loss we incurred for the three months ended September 30, 2019, options and restricted share units representing approximately zero shares of common stock, respectively, and convertible securities representing approximately 514 thousand shares of common stock, were excluded from the basic loss per share calculation as their inclusion would have been anti-dilutive. As a result of the net loss we incurred for the nine months ended September 30, 2019, options, restricted share units and convertible securities representing approximately zero, 31 thousand and 507 thousand, shares of common stock, respectively, were excluded from the basic loss per share calculation, because of this same reason. Product warranties Through March 31, 2016, we warranted finished goods against defects in material and workmanship under normal use and service for periods generally between and five years. Beginning April 1, 2016, we warrant our commercial Tubular LED Lamps (“TLEDs”), the troffer luminaires, and certain Globe Lights for a period of ten years (excluding RedCap® and our Battery Backup TLEDs), and all other LED products for five years per the Terms and Conditions outlined on our website. Beginning in October 2019, TLEDs (excluding RedCap®) are primarily warranted for ten years, certain D-Series lamps are warranted for either ten years or five years based on the customer’s choice and the warranty for all of our other products is five years. Warranty settlement costs consist of actual amounts expensed for warranty, which are largely a result of the cost of replacement products provided to our customers. A liability for the estimated future costs under product warranties is maintained for products under warranty based on the actual claims incurred to date and the estimated nature, frequency, and costs of future claims. These estimates are inherently uncertain and changes to our historical or projected experience may cause material changes to our warranty reserves in the future. We continuously review the assumptions related to the adequacy of our warranty reserve, including product failure rates, and make adjustments to the existing warranty liability when there are changes to these estimates or the underlying replacement product costs, or the warranty period expires. The following table summarizes warranty activity for the periods presented (in thousands):
Financial Instruments In January 2020, we completed a registered direct offering for the sale of 688,360 shares of our common stock to certain institutional investors, at a purchase price of $3.37 per share. We also sold, to the same institutional investors, warrants to purchase up to 688,360 shares of common stock at an exercise price of $3.37 per share in a concurrent private placement for a purchase price of $0.625 per warrant. We paid the placement agent commissions of $193 thousand plus $50 thousand in expenses in connection with the registered direct offering and the concurrent private placement and we also paid legal, accounting and other fees of $231 thousand related to the offering. Total offering costs of $474 thousand have been presented as a reduction of additional paid-in capital and have been netted within equity in the Condensed Consolidated Balance Sheet as of September 30, 2020. In addition, we issued warrants to the placement agent to purchase up to 48,185 shares of common stock at an exercise price of $4.99 per share. Net proceeds to us from the sale of common stock and warrants (the “January 2020 Equity Offering”) were approximately $2.3 million. In accordance with the terms of the Iliad Note (as defined below in Note 7, “Debt”), 10% of the gross proceeds from the January 2020 Equity Offering ($275 thousand) were used to make payments on the Iliad Note, of which $226 thousand went towards the outstanding principal amount and the balance to interest. Warrants to purchase an aggregate of 539,152 shares remain outstanding at September 30, 2020 with a weighted average exercise price of $3.50 per share. The exercise of warrants could provide us with cash proceeds of up to $1.9 million in the aggregate. During the nine months ended September 30, 2020, 197,394 warrants were exercised resulting in total proceeds of $676 thousand. The warrants have been classified as liabilities, as opposed to equity, due to the potential cash settlement upon occurrence of a fundamental transaction and are recorded at their fair values at each balance sheet date. Please also refer to Note 9, “Stockholders’ Equity”. Fair Value Measurements The fair value hierarchy prioritizes the inputs to valuation techniques used to measure fair value, giving the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described below. We classify the inputs used to measure fair value into the following hierarchy:
The following table provides a summary of the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 (in thousands):
A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. In determining the appropriate levels, we perform a detailed analysis of the assets and liabilities whose fair value is measured on a recurring basis. We review and reassess the fair value hierarchy classifications on a quarterly basis. Changes from one quarter to the next related to the observability of inputs in a fair value measurement may result in a reclassification between fair value hierarchy levels. There were no reclassifications for all periods presented. The estimated fair value of warrants accounted for as liabilities, representing a Level 3 fair value measure, was determined on the issuance date and subsequently marked to market at each financial reporting date. We use the Black-Scholes valuation model to value the warrant liabilities at fair value. The fair value is estimated using the expected volatility based on our historical volatility and is determined using probability weighted average assumptions, when appropriate. The following inputs were used for the Black-Sholes valuation model at September 30, 2020:
A roll-forward of fair value measurements using significant unobservable inputs (Level 3) for the warrants is as follows (in thousands):
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Restructuring |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring | RESTRUCTURINGFor the three and nine months ended September 30, 2020, we recorded net restructuring credits of approximately $16 thousand and $44 thousand, respectively. For the three months ended September 30, 2019, we recorded restructuring credits of approximately $19 thousand and for the nine months ended September 30, 2019, we recorded restructuring charges of approximately $243 thousand, related to the costs and offsetting sub-lease income and accretion expense for the remaining lease obligation for our former New York, New York and Arlington, Virginia offices. For additional information regarding the restructuring actions taken as part of the 2017 and 2019 restructuring plans, please refer to Note 3, “Restructuring,” included under Item 8, “Financial Statements and Supplementary Data,” of our 2019 Annual Report. Our restructuring liabilities consist of estimated ongoing costs related to long-term operating lease obligations, which the Company has exited. The recorded value of the ongoing lease obligations is based on the remaining lease term and payment amount, discounted to present value. Changes in subsequent periods resulting from a revision to either the timing or the amount of estimated cash flows over the future period are measured using the credit adjusted, risk free rate that was used to measure the restructuring liabilities initially. Please also refer to Note 6, “Leases”. The following is a reconciliation of the beginning and ending balances of our restructuring liability as it relates to the 2017 and 2019 restructuring plans (in thousands):
The following is a reconciliation of the ending balance of our restructuring liability at September 30, 2020 to the balance sheet:
As a result of the restructuring actions and initiatives described above, we have reduced our operating expenses to be more commensurate with our sales volumes. However, we continue to incur losses and have a substantial accumulated deficit, and substantial doubt about our ability to continue as a going concern continues to exist at September 30, 2020. Since the executive transition on April 1, 2019, we have continued to evaluate and assess strategic options as we seek to achieve profitability. We plan to achieve profitability through growing our sales by continuing to execute on our multi-channel sales strategy that targets key verticals, such as government, healthcare, education, and commercial and industrial, complemented by our marketing outreach campaigns and expanding channel partnerships. We also plan to continue to develop advanced lighting and lighting control technologies and introduce impactful new products such as EnFocus™, a breakthrough lighting control platform we officially launched during the second quarter of 2020. In addition, during the third quarter of 2020, we developed UVCD products for both consumer, as well as commercial and industrial, markets. As described in Note 9, “Stockholders’ Equity,” we also raised approximately $2.3 million of net proceeds upon the issuance of common stock and warrants in connection with the January 2020 Equity Offering. Additionally, we have entered into two new revolving credit facilities as described in Note 7, “Debt,” which allow for expanded borrowing capacity. The restructuring and cost cutting initiatives implemented during 2019, as well as the January 2020 Equity Offering that significantly strengthened our balance sheet, were designed to allow us to effectively execute these strategies. However, our efforts may not occur as quickly as we envision or be successful due to the long sales cycle in our industry, the corresponding time required to ramp up sales from new products and markets into this sales cycle, the timing of introductions of additional new products, significant competition, potential sales volatility given our customer concentration, and the recent and lingering economic impact from the COVID-19 pandemic, among other factors. As a result, we will continue to review and pursue selected external funding sources to ensure adequate financial resources to execute across the timelines required to achieve these objectives including, but not limited to, the following: •obtaining financing from traditional or non-traditional investment capital organizations or individuals; •obtaining funding from the sale of our common stock or other equity or debt instruments; and •obtaining debt financing with lending terms that more closely match our business model and capital needs. There can be no assurance that we will obtain funding on acceptable terms, in a timely fashion, or at all. Obtaining additional funding contains risks, including: •additional equity financing may not be available to us on satisfactory terms, and any equity we are able to issue could lead to dilution for current stockholders and have rights, preferences and privileges senior to our common stock; •loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants, conversion features, refinancing demands, and control or revocation provisions, which are not acceptable to management or our board of directors; and •the current environment in the capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing. If we fail to obtain the required additional financing to sustain our business before we are able to produce levels of revenue to meet our financial needs, we will need to delay, scale back or eliminate our growth plans and further reduce our operating costs and headcount, each of which would have a material adverse effect on our business, future prospects, and financial condition. A lack of additional funding could also result in our inability to continue as a going concern and force us to sell certain assets or discontinue or curtail our operations and, as a result, investors in the Company could lose their entire investment. Considering both quantitative and qualitative information, we continue to believe that the combination of our plans to obtain additional external funding, timely re-organizational actions, current financial position, liquid resources, obligations due or anticipated within the next year, development and implementation of an excess inventory reduction plan, application and successful acquisition of a Paycheck Protection Program (“PPP”) loan during April 2020, plans and initiatives in our research and development, product development and sales and marketing, and development of potential channel partnerships, if adequately executed, will provide us with an ability to finance our operations through the next twelve months and will mitigate the substantial doubt about our ability to continue as a going concern. On August 17, 2020, we received a letter from the Listing Qualifications staff of The Nasdaq Stock Market (“Nasdaq”) notifying us that we are no longer in compliance with the minimum stockholders’ equity requirement for continued listing on the Nasdaq Capital Market. Nasdaq Listing Rule 5550(b)(1) requires listed companies to maintain stockholders’ equity of at least $2,500,000 if they do not meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations. Our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, filed on August 13, 2020, reflected that our stockholders’ equity as of June 30, 2020 was $1,714,000. In addition, as of August 13, 2020, we did not meet the alternative compliance standards relating to the market value of listed securities or net income from continuing operations. The notification letter had no immediate effect on the listing of our common stock on the Nasdaq Capital Market. Nasdaq provided us with 45 calendar days, or until October 1, 2020, to submit a plan to regain compliance with Nasdaq’s listing standards. On October 5, 2020, based on our timely submission of its plan, Nasdaq granted us an extension through February 15, 2021 to regain compliance with Rule 5550(b)(1), subject to our compliance with certain terms of the extension.
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Inventories |
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Inventories | INVENTORIES Inventories are stated at the lower of standard cost (which approximates actual cost determined using the first-in, first-out cost method) or net realizable value, and consist of the following (in thousands):
The following is a roll-forward of the reserves for excess, obsolete, and slow-moving inventories (in thousands):
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Property and Equipment |
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Property and Equipment | PROPERTY AND EQUIPMENT Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets and consist of the following (in thousands):
Depreciation expense was $48 thousand and $77 thousand for the three months ended September 30, 2020 and 2019, respectively. For the nine months ended September 30, 2020 and 2019, depreciation expense was $140 thousand and $277 thousand, respectively.
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Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | LEASESThe Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases with expirations through 2024 under which it is responsible for related maintenance, taxes and insurance. The Company has one finance lease containing a bargain purchase option upon expiration of the lease in 2022. The lease term consists of the non-cancellable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The present value of the remaining lease obligation for these leases was calculated using an incremental borrowing rate of 7.25%, which was the Company’s borrowing rate on its former revolving line of credit with Austin Financial Services, Inc. (the “Austin Credit Facility”). The weighted average remaining lease term for operating, restructuring and finance leases is 1.9 years, 0.8 years, and 1.5 years, respectively. The Company had one restructured lease with a sub-lease component for the New York, New York office that was closed in 2017. The lease expires in 2021. As part of the lease agreement, there was $0.3 million in restricted cash in other current assets on the accompanying Condensed Consolidated Balance Sheets as of September 30, 2020, and $0.3 million in restricted cash in other long-term assets as of December 31, 2019, which represents collateral against the related letter of credit issued as part of this agreement. The restructured lease and sub-lease were deemed to be in-scope and thus subject to the requirements of Accounting Standard Codification 842, Leases (“Topic 842”) and were evaluated for impairment in accordance with the asset impairment provisions of Accounting Standard Codification 360, Property, Plant and Equipment (“Topic 360”). The Company concluded its net right-of-use assets were not impaired and the carrying amount approximates expected sub-lease income in future years as of September 30, 2020. The Company continues to carry certain immaterial operating expenses associated with this lease as restructuring liabilities and will continue to accrete those liabilities in accordance with Accounting Standard Codification 420, Exit or Disposal Cost Obligations (“Topic 420”), as has been done since the cease use date in 2017. For additional information regarding treatment of leases please refer to Note 6, “Leases,” included under Item 8, “Financial Statements and Supplementary Data,” of our 2019 Annual Report. Components of the operating, restructured and finance lease costs recognized in net loss for the three and nine months ended September 30, 2020 and 2019, were as follows (in thousands):
Supplemental balance sheet information related to the Company’s operating and finance leases as of September 30, 2020 and December 31, 2019 are as follows (in thousands):
Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at September 30, 2020 are as follows (in thousands):
Supplemental cash flow information related to leases for the nine months ended September 30, 2020 and 2019, was as follows (in thousands):
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Debt |
9 Months Ended |
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Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Credit facilities On August 11, 2020, we entered into two debt financing arrangements (together, the “New Credit Facilities”). The first arrangement is an inventory financing facility (the “Inventory Facility”) pursuant to the Loan and Security Agreement (the “Inventory Loan Agreement”), between the Company and Crossroads Financial Group, LLC, a North Carolina limited liability company (the “IF Lender”). Borrowings under the Inventory Facility are permitted up to the lower of (i) $3.0 million and (ii) a borrowing base determined from time to time based on the value of the Company’s eligible inventory, valued at 75% of inventory costs or 85% of the inventory net orderly liquidation value, less the availability reserves. The outstanding indebtedness under the Inventory Facility accrues at an annual rate equal to the greater of (i) 5.75% and (ii) 4.00% plus the three (3) month LIBOR rate and is also subject to a service fee of 1.00% per month. The Inventory Facility’s interest and service fees combined amount is subject to a minimum monthly fee of $18 thousand. There would be no breakage fee for the Company for the Inventory Facility if the Company were to refinance it with an American Bankers Association (“ABA”) equivalent institution after August 11, 2021. The Inventory Facility is secured by substantially all of the present and future assets of the Company and is also governed by an intercreditor agreement among the Company, the IF Lender and the RF Lender (defined below). The Inventory Facility matures on August 11, 2022, subject to early termination upon 90 days’ notice and otherwise in accordance with the terms of the Inventory Loan Agreement. The term is automatically extended in successive one (1) year increments unless terminated by either party in accordance with the Inventory Loan Agreement. The second arrangement is a receivables financing facility (the “Receivables Facility”) pursuant to the Loan and Security Agreement (the “Receivables Loan Agreement”) between the Company and Factors Southwest L.L.C. (d/b/a FSW Funding), an Arizona limited liability company (the “RF Lender”). Borrowings under the Receivables Facility are permitted up to the lower of (i) $2.5 million or (ii) a borrowing base determined from time to time based on the value of the Company’s eligible accounts receivable, valued at 90% of the face value of such accounts receivable, less availability reserves, if any. Interest on outstanding indebtedness under the Receivables Facility accrues at an annual rate equal to (i) the highest prime rate announced from time to time by the Wall Street Journal plus (ii) 2.00%. The Receivables Facility is also secured by substantially all of the present and future assets of the Borrower and is also governed by an intercreditor agreement among the Company, the IF Lender and the RF Lender. A $25 thousand, or 1.00%, facility fee was charged at closing. There would be no breakage fee for the Company for the Receivables Facility if the Company were to refinance it with an ABA equivalent institution. The Receivables Facility matures on August 11, 2022, subject to early termination in accordance with the terms of the Receivables Loan Agreement; provided that the term is automatically extended in successive one (1) year increments unless terminated by either party in accordance with the Receivables Loan Agreement. The New Credit Facilities replaced the Austin Credit Facility, which was secured by a lien on our assets. Interest on advances under the line was due monthly at the “Prime Rate,” as published by the Wall Street Journal from time to time, plus a margin of 2%. The borrowing rate as of December 31, 2019 was 6.75%. Overdrafts were subject to a 2% fee. Additionally, an annual facility fee of 1% on the entire $5.0 million amount of the Austin Credit Facility was due at the beginning of each of the three years that the Austin Credit Facility was outstanding and a 0.5% collateral management fee on the average outstanding loan balance was payable monthly. We paid Austin the first year’s fee when the Austin Credit Facility was signed and the second year’s fee in December of 2019. Borrowings under the Austin Credit Facility were $0.7 million at December 31, 2019. On August 11, 2020, we paid $1.4 million to close the Austin Credit Facility which included a $100 thousand termination fee. Additionally, we wrote off $59 thousand of the remaining related debt acquisition costs. The termination fee and the write-off of debt acquisition costs are reflected as a loss on extinguishment of debt in our Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020. For additional information regarding the Austin Credit Facility, please refer to Note 9, “Debt,” included under Item 8, “Financial Statements and Supplementary Data,” of our 2019 Annual Report. Borrowings under the Inventory Facility were $1.1 million and borrowings under the Receivables Facility were $0.9 million at September 30, 2020. These facilities are recorded in the Condensed Consolidated Balance Sheet as of September 30, 2020 as a current liability under the caption “Credit line borrowings.” Outstanding balances include unamortized net issuance costs totaling $0.1 million for the Inventory Facility and $50 thousand for the Receivables Facility as of September 30, 2020. For additional information regarding the New Credit Facilities, please refer to Part II, Item 5, “Other Information,” included in our Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2020, filed on August 13, 2020. Convertible Notes On March 29, 2019, we issued $1.7 million aggregate principal amount of subordinated convertible promissory notes (the “Convertible Notes”) to certain investors in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended. The Convertible Notes had a maturity date of December 31, 2021 and bore interest at a rate of 5% per annum until June 30, 2019 and at a rate of 10% thereafter. Pursuant to their terms, on January 16, 2020, following approval by our stockholders of certain amendments to the Certificate of Incorporation, the principal amount of all of the Convertible Notes, the accumulated interest thereon ($0.1 million) and unamortized issuance costs at the date of conversion ($40 thousand), which totaled $1.8 million, were converted at a conversion price of $0.67 per share into an aggregate of 2,709,018 shares of the Company’s Series A Convertible Preferred Stock, par value $0.0001 per share (“Series A Preferred Stock”), which is convertible on a one-for-five basis into shares of our common stock. During the second quarter of 2020, 111,548 shares of the Series A Preferred Stock were converted into 22,310 shares of common stock. No conversions of the Series A Preferred Stock occurred during the third quarter of 2020. The purchase agreement related to the Convertible Notes contains customary representations and warranties and provides for resale registration rights with respect to the shares of our common stock issuable upon conversion of the Series A Preferred Stock. Please also refer to Note 9, “Stockholders’ Equity”. Iliad Note On November 25, 2019, we entered into a note purchase agreement (the “Iliad Note Purchase Agreement”) with Iliad Research and Trading, L.P. (“Iliad”) pursuant to which the Company sold and issued to Iliad a promissory note in the principal amount of approximately $1.3 million (the “Iliad Note”). The Iliad Note was issued with an original issue discount of $142 thousand and Iliad paid a purchase price of $1.1 million for the issuance of the Iliad Note, after deduction of $15 thousand of Iliad transaction expenses. The Iliad Note has a maturity date of November 24, 2021 and accrues interest at 8% per annum, compounded daily, on the outstanding balance. The Company may prepay the amounts outstanding under the Iliad Note at a premium, which is 15% during the first year and 10% during the second year. Beginning in May 2020, Iliad may require the Company to redeem up to $150 thousand of the Iliad Note in any calendar month. The Company has the right on three occasions to defer all redemptions that Iliad could otherwise require the Company to make during any calendar month. As of September 30, 2020, no deferrals have been exercised. Each exercise of this deferral right by the Company will increase the amount outstanding under the Iliad Note by 1.5%. The total liability for the Iliad Note Purchase Agreement, net of discount and financing fees, was $0.2 million at September 30, 2020 and $1.0 million at December 31, 2019. Unamortized loan discount and debt issuance costs were $0.1 million at September 30, 2020 and $0.2 million December 31, 2019. In the event our common stock is delisted from Nasdaq, the amount outstanding under the Iliad Note will automatically increase by 15% as of the date of such delisting. Pursuant to the Iliad Note Purchase Agreement and the Iliad Note, we have, among other things, agreed that, until the Iliad Note is repaid: •10% of gross proceeds the Company receives from the sale of our common stock or other equity must be paid to Iliad and will be applied to reduce the outstanding balance of the Iliad Note (the failure to make such a prepayment is not an event of default under the Iliad Note, but will increase the amount then outstanding under the Iliad Note by 10%); and •unless agreed to by Iliad, we will not engage in certain financings that involve the issuance of securities that include conversion rights in which the number of shares of common stock that may be issued pursuant to such conversion right varies with the market price of our common stock (a “Restricted Issuance”); provided, however, if Iliad does not agree to a Restricted Issuance, the Company may on up to three occasions make the Restricted Issuance anyway, but the outstanding balance of the Iliad Note will increase by 3% on each occasion the Company exercises its right to make the Restricted Issuance without Iliad’s agreement. In accordance with the terms of the Iliad Note, 10% of the gross proceeds from the January 2020 Equity Offering ($275 thousand) were used to make payments on the Iliad Note, of which $226 thousand went towards the outstanding principal amount. Upon the occurrence of an event of default under the Iliad Note, Iliad may accelerate the date for the repayment of the amount outstanding under the Iliad Note and increase the amount outstanding by an amount ranging from 5% to 15%, depending on the nature of the event of default. Certain insolvency and bankruptcy related events of default will result in the automatic acceleration of the amount outstanding under the Iliad Note and the outstanding amount due will be automatically increased by 5%. After the occurrence of an event of default, Iliad may elect to have interest accrue on the Iliad Note at a rate per annum of 22%, or such lesser rate as permitted under applicable law. PPP Loan On April 17, 2020, the Company was granted a loan from KeyBank National Association (“KeyBank”) in the amount of approximately $795 thousand, pursuant to the PPP under Division A of the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), which was enacted on March 27, 2020. The funds were received on April 20, 2020. At September 30, 2020, $362 thousand is classified as short-term debt and $433 thousand is classified as long-term debt on the Company’s balance sheet. The loan accrues interest at a rate of 1.0% per annum and matures on April 17, 2022. We have recorded accrued interest of $4 thousand through September 30, 2020. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company believes it has used the loan for qualifying expenses. On October 20, 2020, we submitted a loan forgiveness application for the full amount of the loan to KeyBank and on October 21, 2020, KeyBank accepted the application and forwarded it to the Small Business Administration (“SBA”) for approval. The SBA has a 90-day review period and we are awaiting the decision. There is no assurance that the Company will obtain forgiveness for any portion of the loan.
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES As a result of the operating loss incurred during each of the three and nine months ended September 30, 2020 and 2019, and after the application of the annual limitation set forth under Section 382 of the Internal Revenue Code of 1986, as amended (the “IRC”), it was not necessary to record a provision for U.S. federal income tax. A provision to return benefit of $2 thousand was recorded related to various 2019 state income tax returns filed during the period ended September 30, 2020. At September 30, 2020 and December 31, 2019, we had a full valuation allowance recorded against our deferred tax assets. The valuation allowance was recorded due to uncertainties related to our ability to realize the deferred tax assets, primarily consisting of certain net operating loss carry-forwards. The valuation allowance is based on management’s estimates of taxable income by jurisdiction and the periods over which the deferred tax assets will be recoverable. At December 31, 2019, we had a net operating loss carry-forward of approximately $108.8 million for federal income tax purposes ($64.5 million for state and local income tax purposes). However, due to changes in our capital structure, approximately $54.5 million of the $108.8 million is available after the application of IRC Section 382 limitations. As a result of the Tax Cuts and Jobs Act of 2017 (the “Tax Act”), net operating loss carry-forwards generated in tax years beginning after December 31, 2017 can only offset 80% of taxable income and can be carried forward indefinitely. The $8.3 million and $8.7 million in net operating losses generated in 2019 and 2018, respectively, will be subject to the new limitations under the Tax Act. If not utilized, the carry-forwards generated prior to December 31, 2017 of $37.3 million will begin to expire in 2021 for federal purposes and have begun to expire for state and local purposes. For a full discussion of the estimated restrictions on our utilization of net operating loss carry-forwards, please refer to Note 12, “Income Taxes,” included under Item 8, “Financial Statements and Supplementary Data,” of our 2019 Annual Report.
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Stockholders' Equity |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shareholders' Equity | STOCKHOLDERS’ EQUITY 1-for-5 Reverse Stock Split On June 11, 2020, in accordance with previous stockholder approval, our Board of Directors effected a 1-for-5 reverse stock split of the Company’s common stock, par value $0.0001 per share. The reverse stock split became effective immediately (the “Effective Time”) upon the filing of the Certificate of Amendment to the Company’s Certificate of Incorporation, as amended (the “Certificate of Incorporation”), with the Delaware Secretary of State. At the Effective Time, every five shares of common stock issued and outstanding automatically combined into one validly issued, fully paid and non-assessable share of common stock. No fractional shares were issued as a result of the reverse stock split. The fractional shares were settled in cash in an amount not material to the Company. The $0.0001 par value per share of common stock and other terms of the common stock were not affected by the reverse stock split. The number of authorized shares of common stock under the Certificate of Incorporation remained unchanged at 50,000,000 shares. The current financial statements, as well as prior period financial statements, have been retroactively adjusted to reflect the reverse stock split. Proportional adjustments were made to the conversion and exercise prices of our outstanding warrants and stock options, and to the number of shares issued and issuable under our stock incentive plans in connection with the reverse stock split. The current financial statements as well as prior period financial statements have been retroactively adjusted to reflect the reverse stock split. Preferred shares outstanding were not affected by the reverse stock split and, as such, those shares have not been adjusted. The reverse stock split was effected solely to increase the per share trading price of the common stock to satisfy the $1.00 minimum bid price requirement pursuant to Nasdaq Listing Rule 5550(a)(2) for continued listing on Nasdaq. The common stock began trading on Nasdaq on a split-adjusted basis at the opening of trading on June 12, 2020. Preferred Stock Pursuant to the terms of the Convertible Notes, on January 16, 2020, following approval by our stockholders of certain amendments to the Certificate of Incorporation, the principal amount of all of the Convertible Notes and the accumulated interest thereon and unamortized issuance costs at the date of conversion (totaling $1.8 million) were converted at a conversion price of $0.67 per share into an aggregate of 2,709,018 shares of the Company’s Series A Preferred Stock, which is convertible on a one-for-five basis into shares of our common stock. During the second quarter of 2020, 111,548 shares of the Series A Preferred Stock were converted into 22,310 shares of common stock. No conversions of the Series A Preferred Stock occurred during the third quarter of 2020. The Series A Preferred Stock was created by the filing of a Certificate of Designation with the Secretary of State of the State of Delaware on March 29, 2019, which designated 2,000,000 shares of the Company’s preferred stock, par value $0.0001 per share, as Series A Preferred Stock (the “Original Series A Certificate of Designation”). On January 15, 2020 with prior stockholder approval, the Company amended the Certificate of Incorporation to increase the number of authorized shares of preferred stock to 5,000,000. The Original Series A Certificate of Designation was also amended on January 15, 2020, to increase the number of shares of preferred stock designated as Series A Preferred Stock to 3,300,000 (the Original Series A Certificate of Designation, as so amended, the “Series A Certificate of Designation”). Pursuant to the Series A Certificate of Designation, each holder of outstanding shares of Series A Preferred Stock is entitled to vote with holders of outstanding shares of common stock, voting together as a single class, with respect to any and all matters presented to the stockholders of the Company for their action or consideration, except as provided by law. In any such vote, each share of Series A Preferred Stock shall entitle its holder to a number of votes equal to 11.07% of the number of shares of common stock into which such share of Series A Preferred Stock is convertible. The Series A Preferred Stock (a) has a preference upon liquidation equal to $0.67 per share and then participates on an as-converted basis with the common stock with respect to any additional distributions, (b) shall receive any dividends declared and payable on our common stock on an as-converted basis, and (c) is convertible at the option of the holder into shares of our common stock on a one-for-five basis. On March 29, 2019, the Company also filed a Certificate of Elimination with respect to its authorized, but unissued, Series A Participating Preferred Stock, to return such shares to the status of undesignated preferred stock available for designation as Series A Preferred Stock. The purchase agreement related to the Convertible Notes contains customary representations and warranties and provides for resale registration rights with respect to the shares of our common stock issuable upon conversion of the Series A Preferred Stock. January 2020 Equity Offering Issuance of Common Stock and Warrants In January 2020, we completed a registered direct offering for the sale of 688,360 shares of our common stock to certain institutional investors, at a purchase price of $3.37 per share. We also sold, to the same institutional investors, warrants to purchase up to 688,360 shares of common stock at an exercise price of $3.37 per share in a concurrent private placement for a purchase price of $0.625 per warrant. We paid the placement agent commissions of $193 thousand plus $50 thousand in expenses in connection with the registered direct offering and the concurrent private placement and we also paid legal, accounting and other fees of $231 thousand related to the offering. Total offering costs of $474 thousand have been presented as a reduction of additional paid-in capital and have been netted within equity in the Condensed Consolidated Balance Sheet as of September 30, 2020. In addition, we issued warrants to the placement agent to purchase up to 48,185 shares of common stock at an exercise price of $4.99 per share. Net proceeds to us from the sale of common stock and warrants were approximately $2.3 million. In accordance with the terms of the Iliad Note, 10% of the gross proceeds from the January 2020 Equity Offering ($275 thousand) were used to make payments on the Iliad Note, of which $226 thousand went towards the outstanding principal amount and the balance to interest. Warrants to purchase an aggregate of 539,152 shares remain outstanding at September 30, 2020 with a weighted average exercise price of $3.50 per share. The exercise of warrants could provide us with cash proceeds of up to $1.9 million in the aggregate if all warrants are exercised. During the nine months ended September 30, 2020, 197,394 warrants were exercised resulting in total proceeds of $676 thousand. As of September 30, 2020, we had the following outstanding non-tradeable, registered warrants to purchase shares of common stock:
Warrant Liabilities We account for common stock warrants as either liabilities or equity instruments depending on the specific terms of the warrant agreement. Common stock warrants that could require cash settlement are accounted for as liabilities. We classify these warrant liabilities on the consolidated balance sheet as a current liability. The warrant liabilities are revalued at fair value at each balance sheet date subsequent to the initial issuance. Changes in the fair market value of the warrant are reflected in the consolidated statement of operations as income (expense) based upon the change in fair value of warrants. The warrants we issued in the January 2020 Equity Offering contain a provision for net cash settlement in the event that there is a fundamental transaction involving the Company (e.g., merger, sale of substantially all assets, tender offer, or share exchange). If a fundamental transaction occurs in which the consideration issued consists of all cash or stock in a non-public company, then the warrant holder has the option to receive cash equal to a Black-Scholes value of the remaining unexercised portion of the warrant. The warrants have been classified as liabilities, as opposed to equity, due to the potential cash settlement upon the occurrence of certain events as described above, and are recorded at their fair values at each balance sheet date. Stock-based compensation Stock-based compensation expense is attributable to stock options and restricted stock unit awards. For all stock-based awards, we recognize expense using a straight-line amortization method. The following table summarizes stock-based compensation expense and the impact it had on operations for the periods presented (in thousands):
Total unearned stock-based compensation was $0.2 million at both September 30, 2020 and September 30, 2019. These costs will be charged to expense and amortized on a straight-line basis in future periods. The weighted average period over which the unearned compensation at September 30, 2020 is expected to be recognized is approximately 3.3 years. Stock options The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model. Estimates utilized in the calculation include the expected life of the option, risk-free interest rate, and expected volatility, and are further detailed below.
A summary of option activity under all outstanding stock incentive plans for the nine months ended September 30, 2020 is presented as follows:
Restricted stock units A summary of restricted stock unit activity under all outstanding stock incentive plans for the nine months ended September 30, 2020 is presented as follows:
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 3.8 million |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | SUBSEQUENT EVENTS On October 14, 2020, the Company issued a press release announcing its launch of a portfolio of UVCD products with advanced, patent-pending technologies. Three initial products – nUVo™, abUV™, and mUVe™ - complement each other to meet the needs of air and surface disinfection for commercial, industrial and residential indoor environments. The products are available for pre-order on the Company’s e-commerce website, through its internal salesforce and distribution channel partners, and deliveries are expected to start during the first quarter of 2021. On April 17, 2020, the Company was granted a loan from KeyBank in the amount of approximately $795 thousand, pursuant to PPP Division A of the CARES Act, which was enacted on March 27, 2020. The funds were received on April 20, 2020. At September 30, 2020, $362 thousand is classified as short-term debt and $433 thousand is classified as long- term debt on the Company’s balance sheet. The loan accrues interest at a rate of 1.0% per annum and matures on April 17, 2022. We have recorded accrued interest of $4 thousand through September 30, 2020. Under the terms of the PPP, certain amounts of the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The Company believes it has used the loan for qualifying expenses. On October 20, 2020, we submitted a loan forgiveness application for the full amount of the loan to KeyBank and on October 21, 2020, KeyBank accepted the application and forwarded it to the SBA for approval. The SBA has a 90-day review period and we are awaiting the decision. There is no assurance that the Company will obtain forgiveness for any portion of the loan.
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Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
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Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary organized in Taiwan during 2019. All significant inter-company balances and transactions have been eliminated. Unless indicated otherwise, the information in the Notes to the Consolidated Financial Statements relates to our operations. We have prepared the accompanying financial data for the three and nine months ended September 30, 2020 and 2019 pursuant to the rules and regulations of the United States Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2019 (“2019 Annual Report”). The Condensed Consolidated Balance Sheet as of December 31, 2019 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying condensed consolidated financial statements contain all normal and recurring adjustments necessary to present fairly our Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019, Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 and 2019, Condensed Consolidated Statements of Comprehensive Loss for the three and nine months ended September 30, 2020 and 2019, Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and nine months ended September 30, 2020 and 2019, and Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2019.
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Use of estimates | Use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may vary from the estimates. Estimates include, but are not limited to, the establishment of reserves for accounts receivable, sales returns, inventory obsolescence and warranty claims; the useful lives of property and equipment; valuation allowance for net deferred taxes; the cost and offsetting income related to sub-leased property; and stock-based compensation. In addition, estimates and assumptions associated with the determination of the fair value of financial instruments and evaluation of long-lived assets for impairment requires considerable judgment. Actual results could differ from those estimates and such differences could be material.
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Recent accounting pronouncements | Recent accounting pronouncements In June 2016, the Financial Accounting Standards Board issued Accounting Standard Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which significantly changes the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables, and requires an entity to recognize an allowance based on its estimate of expected credit losses rather than incurred losses. For smaller reporting companies, this standard will be effective for interim and annual periods starting after December 15, 2022 and will generally require adoption on a modified retrospective basis. We are in the process of evaluating the impact of the standard.
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Revenue | Revenue Net sales include revenues from sales of products and shipping and handling charges, net of estimates for product returns. Revenue is measured at the amount of consideration we expect to receive in exchange for the transferred products. We recognize revenue at the point in time when we transfer the promised products to the customer and the customer obtains control over the products. Distributors’ obligations to us are not contingent upon the resale of our products. We recognize revenue for shipping and handling charges at the time the goods are shipped to the customer, and the costs of outbound freight are included in cost of sales. We provide for product returns based on historical return rates. While we incur costs for sales commissions to our sales employees and outside agents, we recognize commission costs concurrent with the related revenue, as the amortization period is less than one year. We do not incur any other incremental costs to obtain contracts with our customers. Our product warranties are assurance-type warranties, which promise the customer that the products are as specified in the contract. Therefore, the product warranties are not a separate performance obligation and are accounted for as described below. Sales taxes assessed by governmental authorities are accounted for on a net basis and are excluded from net sales.
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Accounts Receivable | Accounts Receivable Our trade accounts receivable consist of amounts billed to and currently due from customers. Our customers are concentrated in the United States. In the normal course of business, we extend unsecured credit to our customers related to the sale of our products. Credit is extended to customers based on an evaluation of the customer’s financial condition and the amounts due are stated at their estimated net realizable value. During the first eleven months of 2019, we evaluated and monitored the creditworthiness of each customer on a case-by-case basis. However, during December 2019, we transitioned to an account receivable insurance program with a high credit worthy insurance company where we have the large majority of the accounts receivable insured with a portion of self-retention. This third party also provides creditworthiness ratings and metrics that significantly assist us in evaluating the creditworthiness of both existing and new customers. We maintain allowances for sales returns and doubtful accounts receivable to provide for the estimated number of accounts receivable that will not be collected. The allowance is based on an assessment of customer creditworthiness and historical payment experience, the age of outstanding receivables, and performance guarantees to the extent applicable. Past due amounts are written off when our internal collection efforts have been unsuccessful, and payments subsequently received on such receivables are credited to the allowance for doubtful accounts. We do not generally require collateral from our customers. Our standard payment terms with customers are net 30 days from the date of shipment, and we do not generally offer extended payment terms to our customers, but exceptions are made in some cases to certain customers or with particular orders. Accordingly, we do not adjust trade accounts receivable for the effects of financing, as we expect the period between the transfer of product to the customer and the receipt of payment from the customer to be in line with our standard payment terms.
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Net loss per share | Net loss per share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share gives effect to all dilutive potential shares of common stock outstanding during the period. Dilutive potential shares of common stock consist of incremental shares upon the exercise of stock options, warrants and convertible securities, unless the effect would be anti-dilutive.
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Product warranties | Product warrantiesThrough March 31, 2016, we warranted finished goods against defects in material and workmanship under normal use and service for periods generally between and five years. Beginning April 1, 2016, we warrant our commercial Tubular LED Lamps (“TLEDs”), the troffer luminaires, and certain Globe Lights for a period of ten years (excluding RedCap® and our Battery Backup TLEDs), and all other LED products for five years per the Terms and Conditions outlined on our website. Beginning in October 2019, TLEDs (excluding RedCap®) are primarily warranted for ten years, certain D-Series lamps are warranted for either ten years or five years based on the customer’s choice and the warranty for all of our other products is five years. Warranty settlement costs consist of actual amounts expensed for warranty, which are largely a result of the cost of replacement products provided to our customers. A liability for the estimated future costs under product warranties is maintained for products under warranty based on the actual claims incurred to date and the estimated nature, frequency, and costs of future claims. These estimates are inherently uncertain and changes to our historical or projected experience may cause material changes to our warranty reserves in the future. We continuously review the assumptions related to the adequacy of our warranty reserve, including product failure rates, and make adjustments to the existing warranty liability when there are changes to these estimates or the underlying replacement product costs, or the warranty period expires. |
Fair Value of Financial Instruments | A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. In determining the appropriate levels, we perform a detailed analysis of the assets and liabilities whose fair value is measured on a recurring basis. We review and reassess the fair value hierarchy classifications on a quarterly basis. Changes from one quarter to the next related to the observability of inputs in a fair value measurement may result in a reclassification between fair value hierarchy levels. There were no reclassifications for all periods presented. The estimated fair value of warrants accounted for as liabilities, representing a Level 3 fair value measure, was determined on the issuance date and subsequently marked to market at each financial reporting date. We use the Black-Scholes valuation model to value the warrant liabilities at fair value. The fair value is estimated using the expected volatility based on our historical volatility and is determined using probability weighted average assumptions, when appropriate.
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Basis of Presentation and Summary of Significant Accounting Policies (Tables) |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disaggregation of revenue | The following table provides a disaggregation of product net sales for the periods presented (in thousands):
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Reconciliation of basic and diluted income (loss) per share | The following table presents a reconciliation of basic and diluted loss per share computations (in thousands):
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Schedule of warranty activity | The following table summarizes warranty activity for the periods presented (in thousands):
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Schedule of Assets and Liabilities Measured on Recurring Basis | The following table provides a summary of the financial assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 (in thousands):
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Schedule of valuation assumptions | The following inputs were used for the Black-Sholes valuation model at September 30, 2020:
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Level 3 Fair Value Reconciliation | A roll-forward of fair value measurements using significant unobservable inputs (Level 3) for the warrants is as follows (in thousands):
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Restructuring (Tables) |
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Restructuring Reserve by Type of Cost | The following is a reconciliation of the beginning and ending balances of our restructuring liability as it relates to the 2017 and 2019 restructuring plans (in thousands):
The following is a reconciliation of the ending balance of our restructuring liability at September 30, 2020 to the balance sheet:
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Inventories (Tables) |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of inventory | Inventories are stated at the lower of standard cost (which approximates actual cost determined using the first-in, first-out cost method) or net realizable value, and consist of the following (in thousands):
The following is a roll-forward of the reserves for excess, obsolete, and slow-moving inventories (in thousands):
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Property and Equipment (Tables) |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of property and equipment | Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets and consist of the following (in thousands):
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Leases (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Cost and Supplemental Cash Flow Information | Components of the operating, restructured and finance lease costs recognized in net loss for the three and nine months ended September 30, 2020 and 2019, were as follows (in thousands):
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Schedule of Supplemental Balance Sheet Information | Supplemental balance sheet information related to the Company’s operating and finance leases as of September 30, 2020 and December 31, 2019 are as follows (in thousands):
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Schedule of Future Maturities of Finance Lease Liabilities | Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at September 30, 2020 are as follows (in thousands):
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Schedule of Future Maturities of Operating Lease Liabilities | Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at September 30, 2020 are as follows (in thousands):
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Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases for the nine months ended September 30, 2020 and 2019, was as follows (in thousands):
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Stockholders' Equity (Tables) |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | As of September 30, 2020, we had the following outstanding non-tradeable, registered warrants to purchase shares of common stock:
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Summary of stock-based compensation expense | The following table summarizes stock-based compensation expense and the impact it had on operations for the periods presented (in thousands):
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Schedule of valuation assumptions | Estimates utilized in the calculation include the expected life of the option, risk-free interest rate, and expected volatility, and are further detailed below.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of option activity | A summary of option activity under all outstanding stock incentive plans for the nine months ended September 30, 2020 is presented as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of restricted stock activity | A summary of restricted stock unit activity under all outstanding stock incentive plans for the nine months ended September 30, 2020 is presented as follows:
|
Nature of Operations (Details) |
9 Months Ended | ||||
---|---|---|---|---|---|
Jun. 02, 2020 |
Dec. 17, 2019 |
Sep. 30, 2020
$ / shares
shares
|
Jun. 11, 2020
$ / shares
shares
|
Dec. 31, 2019
$ / shares
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Reverse stock split ratio | 0.2 | 0.2 | |||
Common stock, authorized (in shares) | shares | 50,000,000 | 50,000,000 | 30,000,000 | ||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reverse stock split ratio | 0.5 | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reverse stock split ratio | 0.05 |
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|---|---|
Nov. 29, 2019 |
Jan. 31, 2020 |
Oct. 31, 2019 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Sep. 30, 2019 |
Mar. 31, 2016 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Concentration Risk [Line Items] | ||||||||||
Sale of common stock (in shares) | 539,152 | |||||||||
Exercise price of common stock (in dollars per share) | $ 3.50 | $ 3.50 | ||||||||
Proceeds from issuance of warrants | $ 1,900,000 | |||||||||
Issuance of warrants, January 2020 | $ 1,555,000 | $ 103,000 | 197,394 | |||||||
Proceeds from the exercise of warrants | 676,000 | $ 0 | ||||||||
Amount paid for clearing fees | $ 231,000 | |||||||||
Offering costs | 474,000 | |||||||||
Proceeds from sale of common stock | $ 2,300,000 | |||||||||
Percentage of gross proceeds used to make payments on note | 10.00% | |||||||||
Gross proceeds | $ 275,000 | |||||||||
Payments on the Iliad Note | $ 976,000 | $ 0 | ||||||||
Note Purchase Agreement | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Percentage of gross proceeds used to make payments on note | 10.00% | |||||||||
Payments on the Iliad Note | $ 226,000 | |||||||||
Institutional Investor | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Sale of common stock (in shares) | 688,360 | 497,472 | ||||||||
Exercise price of common stock (in dollars per share) | $ 3.37 | |||||||||
Purchase price (in usd per share) | 0.625 | |||||||||
Private Placement | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Sale of common stock (in shares) | 41,680 | 48,185 | ||||||||
Exercise price of common stock (in dollars per share) | $ 4.99 | $ 4.9940 | $ 4.9940 | |||||||
Amount paid for placement agent commissions | $ 193,000 | |||||||||
Amount paid related to expenses for registered direct offering and concurrent private placement | $ 50,000 | |||||||||
All Other Products | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Warranty service periods | 5 years | |||||||||
LEDFL Tubular LED Lamps (Excluding Red Caps) | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Warranty service periods | 10 years | |||||||||
Common Stock | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Securities excluded from net loss per share calculation (in shares) | 0 | |||||||||
Equity Option | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Securities excluded from net loss per share calculation (in shares) | 117,000 | 57,000 | 0 | |||||||
Restricted Stock Units | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Securities excluded from net loss per share calculation (in shares) | 13,000 | 7,000 | 31,000 | |||||||
Warrant | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Securities excluded from net loss per share calculation (in shares) | 321,000 | 152,000 | 507,000 | |||||||
Convertible securities | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Securities excluded from net loss per share calculation (in shares) | 519,000 | 514,000 | 531,000 | |||||||
Minimum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Warranty service periods | 1 year | |||||||||
Maximum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Warranty service periods | 5 years | |||||||||
Customer concentration risk | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 10.00% | 10.00% | ||||||||
Customer concentration risk | Distributor To The U.S. Navy | Revenue | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 67.00% | 27.00% | 52.00% | 20.00% | ||||||
Customer concentration risk | Distributor To The U.S. Navy | Accounts receivable | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 73.00% | 10.00% | ||||||||
Customer concentration risk | Distributor for the U.S. Navy and a Regional Commercial Lighting Retrofit Company | Revenue | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 12.00% | 14.00% | 14.00% | 23.00% | ||||||
Customer concentration risk | Distributor for the U.S. Navy and a Regional Commercial Lighting Retrofit Company | Accounts receivable | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 41.00% | |||||||||
Customer concentration risk | U.S. Navy and Shipbuilders | Revenue | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 30.00% | 58.00% | 27.00% | |||||||
Customer concentration risk | Global Healthcare Provider | Revenue | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 15.00% | |||||||||
Customer concentration risk | Distributor To The U.S. Navy Combined With Sales To Shipbuilders | Revenue | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 68.00% | |||||||||
Customer concentration risk | Two Offshore Suppliers | Accounts receivable | Minimum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 20.00% | 14.00% | ||||||||
Customer concentration risk | Two Offshore Suppliers | Accounts receivable | Maximum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 25.00% | 19.00% | ||||||||
Customer concentration risk | Two Offshore Suppliers | Accounts Payable | Minimum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 24.00% | |||||||||
Customer concentration risk | Two Offshore Suppliers | Accounts Payable | Maximum | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 35.00% | |||||||||
Customer concentration risk | One Offshore Supplier | Accounts receivable | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 18.00% | 20.00% | ||||||||
Customer concentration risk | One Offshore Supplier | Accounts Payable | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 36.70% | |||||||||
Customer concentration risk | One Domestic Supplier | Accounts Payable | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 16.00% | |||||||||
Geographic concentration risk | Revenue | Countries outside of the United States | ||||||||||
Concentration Risk [Line Items] | ||||||||||
Concentration risk (less than for one percent) | 0.00% | 1.00% |
Basis of Presentation and Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenue from External Customer [Line Items] | ||||
Net sales | $ 5,964 | $ 2,915 | $ 13,082 | $ 9,174 |
Commercial | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | 1,456 | 1,733 | 4,250 | 5,847 |
MMM products | ||||
Revenue from External Customer [Line Items] | ||||
Net sales | $ 4,508 | $ 1,182 | $ 8,832 | $ 3,327 |
Basis of Presentation and Summary of Significant Accounting Policies - Reconciliation of Basic and Diluted Loss per Share (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|||
Numerator: | ||||||
Net loss | $ (1,165) | $ (946) | $ (6,046) | $ (6,065) | ||
Net loss per share - basic and diluted | ||||||
Basic weighted average common shares outstanding (in shares) | [1] | 3,308 | 2,474 | 3,196 | 2,455 | |
|
Basis of Presentation and Summary of Significant Accounting Policies - Warranty Activity (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||||
Balance at beginning of period | $ 215 | $ 342 | $ 195 | $ 258 |
Warranty accruals for current period sales | 22 | 5 | 29 | 34 |
Adjustments to existing warranties | 4 | 0 | 23 | 77 |
In kind settlements made during the period | (11) | (4) | (17) | (26) |
Accrued warranty reserve at end of period | $ 230 | $ 343 | $ 230 | $ 343 |
Basis of Presentation and Summary of Significant Accounting Policies - Financial Instruments Assets and Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | $ 2,928 | $ 0 |
Fair Value, Inputs, Level 1 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | |
Fair Value, Inputs, Level 2 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | 0 | |
Fair Value, Inputs, Level 3 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Warrant liability | $ 2,928 |
Basis of Presentation and Summary of Significant Accounting Policies - Fair Value Inputs (Details) |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 93.50% | 90.00% |
Expected life (in years) | 6 years 2 months 12 days | 6 years 3 months 18 days |
Warrant | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Risk free interest rate, minimum | 0.21% | |
Risk free interest rate, maximum | 0.24% | |
Minimum | Warrant | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 103.18% | |
Expected life (in years) | 3 years 9 months 14 days | |
Maximum | Warrant | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Expected volatility | 99.38% | |
Expected life (in years) | 4 years 3 months 14 days |
Basis of Presentation and Summary of Significant Accounting Policies - Rollforward (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||||
Balance January 1, 2020 | $ 0 | |||
Issuance of warrants, January 2020 | 1,636 | |||
Settlements from exercise | (982) | |||
(Gain) loss from change in fair value of warrants | $ (153) | $ 0 | 2,274 | $ 0 |
Balance September 30, 2020 | $ 2,928 | $ 2,928 |
Restructuring - Narrative (Details) $ in Thousands |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jun. 02, 2020 |
Dec. 17, 2019 |
Jan. 31, 2020
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Sep. 30, 2020
USD ($)
|
Sep. 30, 2019
USD ($)
|
Jun. 30, 2020
USD ($)
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Mar. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring | $ (16) | $ (19) | $ (44) | $ 243 | |||||||||
Proceeds from sale of common stock | $ 2,300 | ||||||||||||
Reverse stock split ratio | 0.2 | 0.2 | |||||||||||
Stockholders' equity | 2,139 | $ 5,240 | $ 2,139 | $ 5,240 | $ 1,714 | $ 5,883 | $ 3,996 | $ 6,152 | $ 8,433 | $ 11,052 | |||
Maximum | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Reverse stock split ratio | 0.5 | ||||||||||||
Facility Closing | 2017 Restructuring Plan | |||||||||||||
Restructuring Cost and Reserve [Line Items] | |||||||||||||
Restructuring | $ 16 |
Restructuring - Reconciliation of Restructuring Liability (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Restructuring Reserve [Roll Forward] | ||
Accretion of lease obligations | $ 2 | |
Payments | (22) | |
Less, short-term restructuring liability | 18 | $ 24 |
2017 Restructuring Plan | Facility Closing | ||
Restructuring Reserve [Roll Forward] | ||
Beginning balance | 38 | |
Ending balance | 18 | |
Less, short-term restructuring liability | 18 | |
Long-term restructuring liability, included in other liabilities | $ 0 |
Inventories - Additional Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Inventory Disclosure [Abstract] | |||
Raw materials | $ 3,625 | $ 4,064 | |
Finished goods | 5,049 | 5,749 | |
Reserves for excess, obsolete, and slow-moving inventories | (3,415) | (3,645) | $ (4,212) |
Inventories, net | $ 5,259 | $ 6,168 |
Inventories - Reserve Rollforward (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Inventory, Reserve [Roll Forward] | ||
Beginning balance | $ (3,645) | $ (4,212) |
Accrual | (75) | (814) |
Reduction due to sold inventory | 288 | 845 |
Write-off for disposed inventory | 17 | 536 |
Reserves for excess, obsolete, and slow-moving inventories | $ (3,415) | $ (3,645) |
Property and Equipment - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Property, Plant and Equipment [Line Items] | |||||
Property and equipment at cost | $ 3,155 | $ 3,155 | $ 2,984 | ||
Less: accumulated depreciation | (2,735) | (2,735) | (2,595) | ||
Property and equipment, net | 420 | 420 | 389 | ||
Depreciation | 48 | $ 77 | 140 | $ 277 | |
Equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment at cost | 1,353 | $ 1,353 | 1,297 | ||
Equipment | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 3 years | ||||
Equipment | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 15 years | ||||
Tooling | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment at cost | 226 | $ 226 | 203 | ||
Tooling | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 2 years | ||||
Tooling | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 5 years | ||||
Vehicles | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 5 years | ||||
Property and equipment at cost | 47 | $ 47 | 47 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 5 years | ||||
Property and equipment at cost | 137 | $ 137 | 137 | ||
Computer software | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life | 3 years | ||||
Property and equipment at cost | 1,062 | $ 1,062 | 1,028 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment at cost | 210 | 210 | 211 | ||
Finance lease right-of-use asset | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment at cost | 13 | 13 | 13 | ||
Projects in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment at cost | $ 107 | $ 107 | $ 48 |
Leases - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||
Operating lease, discount rate | 7.25% | |
Operating lease, weighted average remaining lease term | 1 year 10 months 24 days | |
Restructured lease, weighted average remaining lease term | 9 months 18 days | |
Finance lease, weighted average remaining lease term | 1 year 6 months | |
Restricted cash held in other assets | $ 342 | $ 342 |
Leases - Components of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||||
Sub-lease income | $ (26) | $ (25) | $ (80) | $ (75) |
Lease cost | 148 | 156 | 451 | 474 |
Operating lease cost, net | 122 | 131 | 371 | 399 |
Sub-lease income | (68) | (111) | (204) | (334) |
Lease cost | 59 | 105 | 180 | 321 |
Restructured lease income, net | (9) | (6) | (24) | (13) |
Interest of lease liabilities | 0 | 1 | 0 | 2 |
Total lease cost, net | $ 113 | $ 126 | $ 347 | $ 388 |
Leases - Schedule of Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Leases | ||
Operating lease right-of-use assets | $ 923 | $ 1,289 |
Restructured lease right-of-use assets | 161 | 322 |
Operating lease right-of-use assets, total | 1,084 | 1,611 |
Operating lease liabilities | 1,060 | 1,480 |
Restructured lease liabilities | 250 | 488 |
Operating lease liabilities, total | 1,310 | 1,968 |
Finance Leases | ||
Property and equipment | 13 | 13 |
Allowances for depreciation | (9) | (5) |
Finance lease assets, net | 4 | 8 |
Finance lease liabilities | $ 4 | $ 6 |
Leases - Schedule of Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Operating Leases | ||
October 2020 to September 2021 | $ 622 | |
October 2021 to September 2022 | 487 | |
October 2022 to September 2023 | 16 | |
October 2023 to September 2024 | 5 | |
Total future undiscounted lease payments | 1,130 | |
Less imputed interest | (70) | |
Total lease obligations | 1,060 | $ 1,480 |
Restructured Leases | ||
October 2020 to September 2021 | 256 | |
October 2021 to September 2022 | 0 | |
October 2022 to September 2023 | 0 | |
October 2023 to September 2024 | 0 | |
Total future undiscounted lease payments | 256 | |
Less imputed interest | (6) | |
Total lease obligations | 250 | 488 |
Restructured Leases Sub-lease Payments | ||
October 2020 to September 2021 | (204) | |
October 2021 to September 2022 | 0 | |
October 2022 to September 2023 | 0 | |
October 2023 to September 2024 | 0 | |
Total future undiscounted lease payments | (204) | |
Less imputed interest | 5 | |
Total lease obligations | (199) | |
Finance Lease | ||
October 2020 to September 2021 | 3 | |
October 2021 to September 2022 | 1 | |
October 2022 to September 2023 | 0 | |
October 2023 to September 2024 | 0 | |
Total future undiscounted lease payments | 4 | |
Less imputed interest | 0 | |
Total lease obligations | $ 4 | $ 6 |
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 401 | $ 402 |
Operating cash flows from restructured leases | 52 | 70 |
Financing cash flows from finance leases | $ 3 | $ 2 |
Debt - Credit Facilities (Details) - USD ($) |
Aug. 11, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|---|
Line of Credit Facility [Line Items] | |||
Credit line borrowings, net of loan origination fees | $ 2,025,000 | $ 715,000 | |
Revolving Credit Facility | |||
Line of Credit Facility [Line Items] | |||
Borrowing rate | 6.75% | ||
Revolving Credit Facility | Inventory Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity on line of credit | $ 3,000,000.0 | ||
Percentage of inventory costs used as borrowing capacity | 75.00% | ||
Percentage of inventory value used as borrowing capacity | 85.00% | ||
Borrowing rate | 5.75% | ||
Monthly facility fee | 1.00% | ||
Monthly facility fee, amount | $ 18,000 | ||
Credit line borrowings, net of loan origination fees | 1,100,000 | ||
Amortized net issuance costs | 100,000 | ||
Revolving Credit Facility | Inventory Facility | London Interbank Offered Rate (LIBOR) | |||
Line of Credit Facility [Line Items] | |||
Borrowing rate | 4.00% | ||
Revolving Credit Facility | Receivables Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity on line of credit | $ 2,500,000 | ||
Monthly facility fee | 1.00% | ||
Monthly facility fee, amount | $ 25,000 | ||
Percentage of accounts receivable used as borrowing capacity | 90.00% | ||
Credit line borrowings, net of loan origination fees | 900,000 | ||
Amortized net issuance costs | $ 50,000 | ||
Revolving Credit Facility | Receivables Facility | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Borrowing rate | 2.00% | ||
Revolving Credit Facility | Austin Facility | |||
Line of Credit Facility [Line Items] | |||
Maximum borrowing capacity on line of credit | $ 5,000,000.0 | ||
Overdraft fee | 2.00% | ||
Annual facility fee | 1.00% | ||
Annual facility fee, payment period | 3 years | ||
Collateral management fee | 0.50% | ||
Credit line borrowings, net of loan origination fees | $ 700,000 | ||
Payment to close Austin credit facility | $ 1,400,000 | ||
Termination fee | 100,000 | ||
Write off of remaining issuance costs | $ 59,000 | ||
Revolving Credit Facility | Austin Facility | Prime Rate | |||
Line of Credit Facility [Line Items] | |||
Margin added to borrowing rate | 2.00% |
Debt - Convertible Notes (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 30 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jan. 16, 2020 |
Mar. 29, 2019 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Dec. 31, 2021 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|||
Line of Credit Facility [Line Items] | ||||||||||
Accumulated interest on subordinated debt | $ 100 | |||||||||
Preferred stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | ||||||||
Conversion of notes to preferred stock (in shares) | [1] | 22,000 | ||||||||
Preferred Stock | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Conversion of notes to preferred stock (in shares) | 111,548 | 2,709,000 | ||||||||
Common Stock | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Conversion of notes to preferred stock (in shares) | 22,310 | |||||||||
Subsequent Event | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Interest rate on convertible notes | 10.00% | |||||||||
Convertible Debt | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Proceeds from issuance of subordinated convertible promissory notes | $ 1,700 | |||||||||
Interest rate on convertible notes | 5.00% | |||||||||
Unamortized issuance costs at date of issuance | 40 | |||||||||
Net proceeds from the conversion of convertible debt to preferred stock | $ 1,800 | |||||||||
Conversion rate (in dollars per share) | $ 0.67 | |||||||||
Conversion of notes to preferred stock (in shares) | 2,709,018 | |||||||||
|
Debt - Iliad Note (Details) - USD ($) |
1 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Nov. 29, 2019 |
Nov. 25, 2019 |
Jan. 31, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | ||||||
Percentage of gross proceeds used to make payments on note | 10.00% | |||||
Gross proceeds | $ 275,000 | |||||
Payments on the Iliad Note | $ 976,000 | $ 0 | ||||
Note Purchase Agreement | ||||||
Debt Instrument [Line Items] | ||||||
Principal amount | $ 1,300,000 | |||||
Issue discount | 142,000 | |||||
Purchase price | 1,100,000 | |||||
Unamortized debt issuance costs | $ 15,000 | |||||
Borrowing rate | 8.00% | |||||
Prepayment premium | 15.00% | |||||
Repurchase amount (up to) | $ 150,000 | |||||
Percentage increase due to deferral of redemption option | 1.50% | |||||
Total liability, net of discount and financing fees | $ 200,000 | $ 1,000,000.0 | ||||
Unamortized issuance costs at date of issuance | $ 100,000 | $ 100,000 | ||||
Increase in amount outstanding from becoming delisted | 15.00% | |||||
Percentage of gross proceeds used to make payments on note | 10.00% | |||||
Payments on the Iliad Note | $ 226,000 | |||||
Increase in amount outstanding from insolvency and bankruptcy event | 5.00% | |||||
Interest rate after insolvency and bankruptcy events | 22.00% | |||||
Note Purchase Agreement | Minimum | ||||||
Debt Instrument [Line Items] | ||||||
Increase in amount outstanding from default event | 5.00% | |||||
Note Purchase Agreement | Maximum | ||||||
Debt Instrument [Line Items] | ||||||
Increase in amount outstanding from default event | 15.00% | |||||
Note Purchase Agreement | Debt Instrument, Period Two | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment premium | 10.00% |
Debt - PPP Loan (Details) - USD ($) $ in Thousands |
5 Months Ended | ||
---|---|---|---|
Apr. 17, 2020 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Debt Instrument [Line Items] | |||
PPP loan | $ 0 | ||
PPP loan, net of current maturities | $ 0 | ||
Paycheck Protection Program | |||
Debt Instrument [Line Items] | |||
Proceeds from loan origination | $ 795 | ||
PPP loan | $ 362 | ||
PPP loan, net of current maturities | 433 | ||
Borrowing rate | 1.00% | ||
Accrued interest | $ 4 |
Income Taxes - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Operating Loss Carryforwards [Line Items] | ||||||
Benefit from income taxes | $ 2 | $ 0 | $ 2 | $ 0 | ||
Deferred tax assets, operating loss carryforwards, portion available after application of IRC Section 382 limitations | $ 54,500 | |||||
Operating loss carry-forwards | 8,300 | $ 8,700 | ||||
Operating loss, subject to expiration | 37,300 | |||||
U.S. Federal, State and Local tax authorities | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Deferred tax assets, operating loss carry-forwards | 108,800 | |||||
State and Local Jurisdiction | ||||||
Operating Loss Carryforwards [Line Items] | ||||||
Deferred tax assets, operating loss carry-forwards | $ 64,500 |
Stockholders' Equity - Stock Split (Details) |
9 Months Ended | ||||
---|---|---|---|---|---|
Jun. 02, 2020 |
Dec. 17, 2019 |
Sep. 30, 2020
$ / shares
shares
|
Jun. 11, 2020
$ / shares
shares
|
Dec. 31, 2019
$ / shares
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reverse stock split ratio | 0.2 | 0.2 | |||
Common stock, par value (in usd per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Common stock, authorized (in shares) | shares | 50,000,000 | 50,000,000 | 30,000,000 | ||
Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reverse stock split ratio | 0.5 | ||||
Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Reverse stock split ratio | 0.05 |
Stockholders' Equity - Preferred Stock (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||||
---|---|---|---|---|---|---|---|---|---|---|
Jan. 16, 2020 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Sep. 30, 2020 |
Jun. 11, 2020 |
Jan. 15, 2020 |
Dec. 31, 2019 |
Mar. 29, 2019 |
|||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Conversion of notes to preferred stock (in shares) | [1] | 22,000 | ||||||||
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 | 2,000,000 | 2,000,000 | ||||||
Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Conversion of notes to preferred stock | $ 1,769 | |||||||||
Votes equal to the number of shares of common stock convertible | 11.07% | |||||||||
Preferred Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Conversion of notes to preferred stock (in shares) | 111,548 | 2,709,000 | ||||||||
Common Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Conversion of notes to preferred stock (in shares) | 22,310 | |||||||||
Series A Preferred Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares issued from conversion (in shares) | 2,709,018 | |||||||||
Series A Convertible Preferred Stock | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Preferred stock, authorized (in shares) | 3,300,000 | 3,300,000 | 0 | |||||||
Convertible Debt | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Amount converted | $ 1,800 | |||||||||
Conversion rate (in dollars per share) | $ 0.67 | |||||||||
Common stock, par value (in usd per share) | $ 0.0001 | |||||||||
|
Stockholders' Equity - Issuance of Common Stock and Warrants (Details) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|---|
Nov. 29, 2019 |
Jan. 31, 2020 |
Sep. 30, 2020 |
Jun. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Sale of common stock (in shares) | 539,152 | |||||
Exercise price of common stock (in dollars per share) | $ 3.50 | $ 3.50 | ||||
Amount paid for clearing fees | $ 231,000 | |||||
Offering costs | 474,000 | |||||
Proceeds from sale of common stock | $ 2,300,000 | |||||
Percentage of gross proceeds used to make payments on note | 10.00% | |||||
Gross proceeds | $ 275,000 | |||||
Payments on the Iliad Note | $ 976,000 | $ 0 | ||||
Proceeds from issuance of warrants | 1,900,000 | |||||
Issuance of warrants, January 2020 | $ (1,555,000) | $ (103,000) | (197,394) | |||
Proceeds from the exercise of warrants | $ 676,000 | $ 0 | ||||
Note Purchase Agreement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of gross proceeds used to make payments on note | 10.00% | |||||
Payments on the Iliad Note | $ 226,000 | |||||
Institutional Investor | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Sale of common stock (in shares) | 688,360 | 497,472 | ||||
Exercise price of common stock (in dollars per share) | $ 3.37 | |||||
Purchase price (in usd per share) | 0.625 | |||||
Private Placement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Sale of common stock (in shares) | 41,680 | 48,185 | ||||
Exercise price of common stock (in dollars per share) | $ 4.99 | $ 4.9940 | $ 4.9940 | |||
Amount paid for placement agent commissions | $ 193,000 | |||||
Amount paid related to expenses for registered direct offering and concurrent private placement | $ 50,000 |
Stockholders' Equity - Warrants (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
shares
| |
Share-based Payment Arrangement [Abstract] | |
Sale of common stock (in shares) | shares | 539,152 |
Exercise price of common stock (in dollars per share) | $ / shares | $ 3.50 |
Stockholders' Equity - Stock-Based Compensation (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 35 | $ 34 | $ 96 | $ 557 |
Unearned stock-based compensation | 200 | $ 200 | ||
Unearned compensation expected to be recognized, period | 3 years 3 months 18 days | |||
Cost of sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1 | 1 | $ 2 | 8 |
Product development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 3 | 2 | 5 | 24 |
Selling, general, and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 31 | $ 31 | $ 89 | $ 525 |
Stockholders' Equity - Stock Options and a Summary of Activity (Details) - $ / shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Stockholders' Equity Note [Abstract] | ||
Fair value of options issued (in dollars per share) | $ 2.00 | $ 1.60 |
Exercise price (in dollars per share) | $ 2.61 | $ 2.10 |
Expected life (in years) | 6 years 2 months 12 days | 6 years 3 months 18 days |
Risk-free interest rate | 0.70% | 1.90% |
Expected volatility | 93.50% | 90.00% |
Dividend yield | 0.00% | 0.00% |
Number of Options | ||
Outstanding at beginning of period (in shares) | 155,031 | |
Granted (in shares) | 110,800 | |
Canceled/forfeited (in shares) | (30,774) | |
Outstanding at end of period (in shares) | 235,057 | |
Vested and expected to vest at period end (in shares) | 185,427 | |
Exercisable at period end (in shares) | 40,577 | |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of period (in dollars per share) | $ 5.23 | |
Granted (in dollars per share) | 2.61 | |
Canceled/forfeited (in dollars per share) | 7.14 | |
Outstanding at end of period (in dollars per share) | 3.74 | |
Vested and expected to vest at period end (in dollars per share) | 4.04 | |
Exercisable at period end (in dollars per share) | $ 9.91 | |
Weighted Average Remaining Contractual Life (in years) | ||
Outstanding at end of period | 8 years 10 months 24 days | |
Vested and expected to vest at period end | 8 years 9 months 18 days | |
Exercisable at period end | 7 years 6 months |
Stockholders' Equity - Restricted Stock Units (Details) |
9 Months Ended |
---|---|
Sep. 30, 2020
$ / shares
shares
| |
Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 155,031 |
Granted (in shares) | shares | 110,800 |
Canceled/forfeited (in shares) | shares | (30,774) |
Outstanding at end of period (in shares) | shares | 235,057 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 5.23 |
Granted (in dollars per share) | $ / shares | 2.61 |
Canceled/forfeited (in dollars per share) | $ / shares | 7.14 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 3.74 |
Weighted Average Remaining Contractual Life (in years) | |
Outstanding at end of period | 8 years 10 months 24 days |
Restricted Stock Units | |
Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 6,603 |
Granted (in shares) | shares | 19,200 |
Released (in shares) | shares | (20,068) |
Canceled/forfeited (in shares) | shares | (1,255) |
Outstanding at end of period (in shares) | shares | 4,480 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 13.17 |
Granted (in dollars per share) | $ / shares | 2.44 |
Released (in dollars per share) | $ / shares | 3.96 |
Canceled/forfeited (in dollars per share) | $ / shares | 12.40 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 8.64 |
Weighted Average Remaining Contractual Life (in years) | |
Outstanding at end of period | 7 years 3 months 18 days |
Commitments and Contingencies Purchase obligations (Details) $ in Millions |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Commitments and Contingencies Disclosure [Abstract] | |
Outstanding purchase commitments | $ 9.8 |
Purchase commitment | $ 3.8 |
Label | Element | Value |
---|---|---|
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201602Member |
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