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 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading symbol(s) |
Name of each exchange on which registered | ||
Large Accelerated filer |
☐ |
☒ | ||||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
Page |
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PART I |
FINANCIAL INFORMATION |
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Item 1 |
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3 |
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4 |
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5 |
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6-7 |
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8-35 |
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Item 2 |
35-51 |
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Item 3 |
52 |
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Item 4 |
52 |
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PART II |
OTHER INFORMATION |
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Item 1 |
53 |
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Item 1A |
54 |
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Item 6 |
56 |
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57 |
September 30, |
December 31, |
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Assets |
2020 |
2019 |
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Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Trade accounts receivable, net of allowance for doubtful accounts of $ |
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Inventory, net |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net of accumulated depreciation of $ |
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Operating lease assets |
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Other assets |
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Intangible assets, net of accumulated amortization of $ |
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Goodwill |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
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Accounts payable |
$ | $ | ||||||
Accrued and other expenses |
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Notes payable - current portion |
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Lease payable - current portion |
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Deferred revenue |
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Total current liabilities |
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Lease payable, long-term portion |
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Notes payable, long-term portion |
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Convertible debentures payable to non-related parties, at fair value |
— | |||||||
Convertible debentures payable to related parties, at fair value |
— | |||||||
Deferred revenue, long-term portion |
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Deferred tax |
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Total liabilities |
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Commitments and Contingencies (Note 7) |
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Stockholders’ equity: |
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Preferred stock, $ par value: authorized |
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Common stock, $ par value: authorized September 30, 2020 |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Treasury stock at cost, |
( |
) | ( |
) | ||||
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
$ | $ | ||||||
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Three Months Ended September 30, |
Nine Months Ended September 30, |
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2020 |
2019 |
2020 |
2019 |
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Revenue: |
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Products |
$ | $ | $ | $ | ||||||||||||
Service and supplies |
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Total revenue |
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Cost of revenue: |
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Products |
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Service and supplies |
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Amortization and depreciation |
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Total cost of revenue |
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Gross profit |
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Operating expenses: |
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Engineering and product development |
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Marketing and sales |
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General and administrative |
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Amortization and depreciation |
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Total operating expenses |
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Loss from operations |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income |
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Loss on extinguishment of debt |
— | — | ( |
) | — | |||||||||||
Loss on fair value of convertible debentures |
— | ( |
) | ( |
) | ( |
) | |||||||||
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Other expense, net |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
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Net loss and comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Net loss per share: |
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Basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
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Weighted average number of shares used in computing loss per share: |
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Basic |
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Diluted |
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For the Nine Months ended September 30, |
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2020 |
2019 |
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(in thousands) |
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Cash flow from operating activities: |
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Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used for operating activities: |
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Amortization of Intangible Assets |
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Depreciation |
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Bad debt provision |
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Stock-based compensation |
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Amortization of debt discount and debt costs |
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Loss on extinguishment of debt |
— | |||||||
Deferred tax expense |
— | |||||||
Change in fair value of convertible debentures |
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Changes in operating assets and liabilities: |
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Accounts receivable |
( |
) | ||||||
Inventory |
( |
) | ( |
) | ||||
Prepaid and other current assets |
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Accounts payable |
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Accrued expenses |
( |
) | ||||||
Deferred revenue |
( |
) | ||||||
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Total adjustments |
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Net cash used for operating activities |
( |
) | ( |
) | ||||
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Cash flow from investing activities: |
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Additions to patents, technology and other |
( |
) | ( |
) | ||||
Additions to property and equipment |
( |
) | ( |
) | ||||
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Net cash used for investing activities |
( |
) | ( |
) | ||||
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Cash flow from financing activities: |
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Issuance of common stock pursuant to stock option plans |
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Issuance of common stock pursuant to Employee Stock Purchase Plan |
— | |||||||
Taxes paid related to restricted stock issuance |
( |
) | ( |
) | ||||
Principal payments of capital lease obligations |
— | ( |
) | |||||
Principal repayment of debt financing |
( |
) | ( |
) | ||||
Proceeds from Line of Credit |
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Repayment to Line of Credit |
( |
) | — | |||||
Proceeds from debt financing |
— | |||||||
Debt issuance costs |
— | |||||||
Proceeds from issuance of common stock, net |
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Net cash provided by financing activities |
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Increase in cash and equivalents |
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Cash and cash equivalents, beginning of period |
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Cash and cash equivalents, end of period |
$ | $ | ||||||
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Supplemental disclosure of cash flow information: |
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Interest paid |
$ | $ | ||||||
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Taxes paid |
$ | $ | ||||||
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Issuance of stock upon conversion of debentures |
— | |||||||
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Right-of-use |
$ | $ | ||||||
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See accompanying notes to condensed consolidated financial statements. |
Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
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Number of Shares Issued |
Par Value |
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Balance at December 31, 2019 |
$ |
$ |
$ |
( |
) | $ |
( |
) | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock |
— | ( |
) | ( |
) | |||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | — | ||||||||||||||||||||||
Stock Issuance Net |
— | — | ||||||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plan |
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Issuance of stock upon conversion of Debentures |
— | — | ||||||||||||||||||||||
Stock-based compensation |
— | — |
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Net loss |
— | — |
— |
( |
) | — |
( |
) | ||||||||||||||||
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Balance at September 30, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
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Number of Shares Issued |
Par Value |
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Balance at June 30, 2020 |
$ |
$ |
$ |
( |
) | $ |
( |
) | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock |
— | ( |
) | — | — | ( |
) | |||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | — | — | |||||||||||||||||||||
Stock Issuance Net |
— |
— | — | — | — | — | ||||||||||||||||||
Issuance of common stock pursuant Employee Stock Purchase Plan |
— | — | — | |||||||||||||||||||||
Issuance of stock upon conversion of Debentures |
— | — | — | — | — | — | ||||||||||||||||||
Stock-based compensation |
— | — |
— |
— |
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Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance at September 30, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
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Number of Shares Issued |
Par Value |
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Balance at December 31, 2018 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock shares forfeited for tax obligations |
( |
) | — | — | ( |
) | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | — | ||||||||||||||||||||||
Stock Issuance net of issuance costs |
||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | ||||||||||||||||||||
Net loss |
— | — | — | ( |
) | — | ( |
) | ||||||||||||||||
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Balance at September 30, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
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Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Treasury Stock |
Stockholders’ Equity |
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Number of Shares Issued |
Par Value |
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Balance at June 30, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ | |||||||||||||||
Issuance of common stock relative to vesting of restricted stock shares forfeited for tax obligations |
( |
) | — | — | ( |
) | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— | — | — | — | — | |||||||||||||||||||
Stock-based compensation |
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Net loss |
— | — | — | ( |
) | — |
( |
) | ||||||||||||||||
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Balance at September 30, 2019 |
$ | $ | $ | ( |
) | $ | ( |
) | $ |
Three months ended September 30, 2020 |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
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Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
— | |||||||||||
$ | $ | $ | ||||||||||
Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
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$ | $ | $ | ||||||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
$ | $ | $ | ||||||||||
Nine months ended September 30, 2020 |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
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Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
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$ | $ | $ | ||||||||||
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Sales Channels |
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Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Three months ended September 30, 2019 |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
|
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Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Timing of Revenue Recognition |
|
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
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$ | $ | $ | ||||||||||
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Sales Channels |
|
|||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
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$ | $ | $ | ||||||||||
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Nine months ended September 30, 2019 |
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Reportable Segments |
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Detection |
Therapy |
Total |
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Major Goods/Service Lines |
||||||||||||
Products |
$ | $ | $ | |||||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
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|
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$ | $ | $ | ||||||||||
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|
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Timing of Revenue Recognition |
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Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
||||||||||||
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$ | $ | $ | ||||||||||
|
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|||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
|
|
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|
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|
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$ | $ | $ | ||||||||||
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Contract balances |
||||
Balance at September 30, 2020 |
||||
Receivables, which are included in “Trade accounts receivable” |
$ | |||
Contract assets, which are included in “Prepaid and other current assets” |
||||
Contract liabilities, which are included in “Deferred revenue” |
Contract liabilities |
September 30, 2020 |
December 31, 2019 |
||||||
Short term |
$ | $ | ||||||
Long term |
||||||||
Total |
$ | $ | ||||||
Nine Months Ended September 30, |
||||
Balance at beginning of period |
$ | |||
Deferral of revenue |
||||
Recognition of deferred revenue |
( |
) | ||
Balance at end of period |
$ | |||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||
Shares used in the calculation of basic and diluted net loss per share |
||||||||||||||||
Diluted shares used in the calculation of net loss per share |
||||||||||||||||
Net loss per share - basic and dilute d |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | ||||
As of September 30, |
||||||||
2020 |
2019 |
|||||||
Stock options |
||||||||
Restricted stock |
||||||||
Convertible Debentures |
— | |||||||
Total |
||||||||
As of September 30, 2020 |
As of December 31, 2019 |
|||||||
Raw materials |
$ | $ | ||||||
Work in process |
||||||||
Finished Goods |
||||||||
Inventory Gross |
||||||||
Inventory Reserve |
( |
) | ( |
) | ||||
Inventory Net |
$ | $ | ||||||
Input |
December 31, 2019 |
February 21, 2020 |
||||||
Company’s stock price |
$ | $ | ||||||
Conversion price |
||||||||
Remaining term (years) |
||||||||
Equity volatility |
% | N/A | ||||||
Risk free rate |
% | N/A | ||||||
1 Probabilty of default event |
% | N/A | ||||||
1 Utilization of Forced Conversion (if available) |
% | % | ||||||
1 Exercise of Default Redemption (if available) |
% | N/A | ||||||
1 Effective discount rate |
% | N/A | ||||||
1 Represents a Level 3 unobservable input, as defined in Note 8 - Fair Value Measurements, below. |
Convertible Debentures |
December 31, 2019 |
February 21, 2020 |
||||||
Fair value, in accordance with fair value option |
$ | $ | ||||||
Principal value outstanding |
$ | $ |
Amount Due |
||||
2020 |
$ | |||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
Total |
$ | |||
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
Cash interest expense |
$ | $ | $ | $ | ||||||||||||
Interest on convertible debentures |
||||||||||||||||
Accrual of notes payable final payment |
||||||||||||||||
Amortization of debt costs |
||||||||||||||||
Interest expense capital lease |
||||||||||||||||
Total interest expense |
$ | $ | $ | $ | ||||||||||||
Lease Cost |
Classification |
Three Months Ended September 30, 2020 |
Year Ended December 31, 2019 |
|||||||
Operating lease cost |
Operating expenses | $ | $ |
|||||||
Finance lease costs |
||||||||||
Amortization of leased assets |
Amortization and depreciation |
|||||||||
Interest on lease liabilities |
Interest expense | |||||||||
Total |
$ | $ |
||||||||
Three Months Ended September 30, 2020 |
||||
Cash paid from operating cash flows for operating leases |
$ | |||
Cash paid from operating cash flows for finance leases |
||||
Cash paid from financing cash flows for finance leases |
||||
As of September 30, 2020 |
||||
Weighted-average remaining lease term of operating leases (in years) |
||||
Weighted-average remaining lease term of finance leases (in years) |
— | |||
Weighted-average discount rate for operating leases |
% | |||
Weighted-average discount rate for finance leases |
As of September 30, 2020: |
Operating Leases |
Finance Leases |
Total |
|||||||||
2020 |
$ | — | ||||||||||
2021 |
— | |||||||||||
2022 |
— | |||||||||||
2023 |
— | |||||||||||
2024 |
— | |||||||||||
Total lease payments |
— | |||||||||||
Less: imputed interest |
( |
) | — | ( |
) | |||||||
Total lease liabilities |
— | |||||||||||
Less: current portion of lease liabilities |
( |
) | — | ( |
) | |||||||
Long-term lease liabilities |
$ | $ | — | $ |
||||||||
Three Months Ended |
Nine Months Ended | |||||||
September 30, |
September 30, | |||||||
19 |
19 | |||||||
Average risk-free interest rate |
||||||||
Expected dividend yield |
||||||||
Expected life |
||||||||
Expected volatility |
||||||||
Weighted average exercise price |
$ |
$ |
$ |
$ | ||||
Weighted average fair value |
$ |
$ |
$ |
$ |
Three Months Ended |
Nine Months Ended |
|||||||||||||||
September 30, |
September 30, |
|||||||||||||||
19 |
||||||||||||||||
Cost of revenue |
$ | $ | $ | $ | ||||||||||||
Engineering and product development |
||||||||||||||||
Marketing and sales |
||||||||||||||||
General and administrative |
||||||||||||||||
$ | $ | $ | $ | |||||||||||||
Remaining expense |
$ | |||
Weighted average term |
As of |
||||||||
September 30, |
||||||||
Aggregate intrinsic value |
2020 |
2019 |
||||||
Stock options |
$ | $ | ||||||
Restricted stock |
◾ |
Level 1 - Quoted prices in active markets for identical assets or liabilities. |
◾ |
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. |
◾ |
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value. |
Fair Value Measurements (in thousands) as of December 31, 2019 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Money market accounts |
$ | $ | $ | — | $ | |||||||||||
Total Assets |
$ | $ | — | $ | — | $ | ||||||||||
Liabilities |
||||||||||||||||
Convertible debentures |
$ | — | $ | — | $ | $ | ||||||||||
Total Liabilities |
$ | — | $ | — | $ | $ | ||||||||||
Fair Value Measurements as of September 30, 2020 | ||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Money market accounts |
$ | $ | $ | $ | ||||||||||||
Total Assets |
$ | $ | — | $ | — | $ | ||||||||||
Convertible Debentures |
||||
Balance, December 31, 2019 |
$ | |||
Fair value adjustments |
||||
Conversion |
( |
) | ||
Balance as of September 30, 2020 |
$ | — | ||
• | significant underperformance relative to historical or projected future operating results; |
• | significant changes in the manner or use of the assets or the strategy for the Company’s overall business; |
• | significant negative industry or economic trends; |
• | significant decline in the Company’s stock price for a sustained period; and |
• | a decline in the Company’s market capitalization below net book value. |
Consolidated reporting unit |
Detection |
Therapy |
Total |
|||||||||||||
Accumulated Goodwill |
$ |
$ | — | $ | — | $ |
||||||||||
Accumulated impairment |
( |
) |
— |
— |
( |
) | ||||||||||
Fair value allocation |
( |
) | — | |||||||||||||
Acquisition of DermEbx and Radion |
— | — | ||||||||||||||
Acquisition measurement period adjustments |
— | — | ||||||||||||||
Acquisition of VuComp |
— | — | ||||||||||||||
Sale of MRI assets |
— | ( |
) | ( |
) | |||||||||||
Impairment |
— | — | ( |
) | ( |
) | ||||||||||
Prior to December 31, 2019 |
— | — | ||||||||||||||
Balance at September 30, 2020 |
$ | — | $ | $ | — | $ | ||||||||||
• |
A significant decrease in the market price of a long-lived asset (or asset group); |
• |
A significant adverse change in the extent or manner in which a long-lived asset (or asset group) is being used or in its physical condition; |
• |
A significant adverse change in legal factors or in the business climate that could affect the value of a long-lived asset (or asset group), including an adverse action or assessment by a regulator; |
• |
An accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of a long-lived asset (or asset group); and |
• |
A current operating period, or cash flow loss combined with a history of operating or cash flow losses or a projection or forecast that demonstrates continuing losses associated with the use of a long-lived asset (or asset group). |
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
2020 | 2019 | 2020 | 2019 | |||||||||||||
Segment revenues: |
||||||||||||||||
Detection |
$ | $ | $ | $ | ||||||||||||
Therapy |
||||||||||||||||
Total Revenue |
$ | $ | $ | $ | ||||||||||||
Segment gross profit: |
||||||||||||||||
Detection |
$ | $ | $ | $ | ||||||||||||
Therapy |
$ | |||||||||||||||
Segment gross profit |
$ | $ | $ | $ | ||||||||||||
Segment operating income (loss): |
||||||||||||||||
Detection |
$ | $ | $ | $ | ||||||||||||
Therapy |
( |
) | ( |
) | ( |
) | $ | ( |
) | |||||||
Segment operating income (loss) |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||
General, administrative, depreciation and amortization expense |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Interest expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
Other income |
||||||||||||||||
Loss on extinguishment of debt |
— | — | ( |
) | — | |||||||||||
Fair value of convertible debentures |
— | ( |
) | ( |
) | ( |
) | |||||||||
Loss before income tax |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ |
3,889 |
$ |
4,749 |
$ |
(860 |
) |
(18.1 |
)% | |||||||
Service revenue |
1,402 |
1,338 |
64 |
4.8 |
% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
5,291 |
6,087 |
(796 |
) |
(13.1 |
)% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
649 |
407 |
242 |
59.5 |
% | |||||||||||
Service revenue |
1,189 |
1,363 |
(174 |
) |
(12.8 |
)% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
1,838 |
1,770 |
68 |
3.8 |
% | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ |
7,129 |
$ |
7,857 |
$ |
(728 |
) |
(9.3 |
)% | |||||||
|
|
|
|
|
|
|
|
Nine months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ | 9,691 | $ | 11,347 | $ | (1,656 | ) | (14.6 | )% | |||||||
Service revenue |
4,194 | 4,117 | 77 | 1.9 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
13,885 | 15,464 | (1,579 | ) | (10.2 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
1,529 | 1,984 | (455 | ) | (22.9 | )% | ||||||||||
Service revenue |
3,833 | 4,511 | (678 | ) | (15.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
5,362 | 6,495 | (1,133 | ) | (17.4 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 19,247 | $ | 21,959 | $ | (2,712 | ) | (12.4 | )% | |||||||
|
|
|
|
|
|
|
|
Three months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Products |
$ | 1,345 | $ | 809 | $ | 536 | 66.3 | % | ||||||||
Service and supplies |
667 | 891 | (224 | ) | (25.1 | )% | ||||||||||
Amortization and depreciation |
92 | 103 | (11 | ) | (10.7 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 2,104 | $ | 1,803 | $ | 301 | 16.7 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 5,025 | $ | 6,054 | $ | (1,029 | ) | (17.0 | )% |
Three months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Detection gross profit |
$ | 4,227 | $ | 5,051 | $ | (824 | ) | (16.3 | %) | |||||||
Therapy gross profit |
798 | 1,003 | (205 | ) | (20.4 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 5,025 | $ | 6,054 | $ | (1,029 | ) | (17.0 | %) | |||||||
|
|
|
|
|
|
|
|
Nine months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Products |
$ | 2,899 | $ | 2,134 | $ | 765 | 35.8 | % | ||||||||
Service and supplies |
2,169 | 2,466 | (297 | ) | (12.0 | )% | ||||||||||
Amortization and depreciation |
287 | 297 | (10 | ) | (3.4 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 5,355 | $ | 4,897 | $ | 458 | 9.4 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 13,892 | $ | 17,062 | $ | (3,170 | ) | (18.6 | )% |
Nine months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Detection gross profit |
$ | 11,227 | $ | 12,874 | $ | (1,647 | ) | (12.8 | %) | |||||||
Therapy gross profit |
2,665 | 4,188 | (1,523 | ) | (36.4 | %) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 13,892 | $ | 17,062 | $ | (3,170 | ) | (18.6 | %) | |||||||
|
|
|
|
|
|
|
|
Three months ended September 30, |
||||||||||||||||
Operating expenses: |
2020 |
2019 |
Change |
Change % |
||||||||||||
Engineering and product development |
$ | 1,849 | $ | 2,485 | $ | (636 | ) | (25.6 | )% | |||||||
Marketing and sales |
2,979 | 3,588 | (609 | ) | (17.0 | )% | ||||||||||
General and administrative |
1,834 | 1,872 | (38 | ) | (2.0 | )% | ||||||||||
Amortization and depreciation |
52 | 69 | (17 | ) | (24.6 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 6,714 | $ | 8,014 | $ | (1,300 | ) | (16.2 | )% | |||||||
|
|
|
|
|
|
|
|
Nine months ended September 30, |
||||||||||||||||
Operating expenses: |
2020 |
2019 |
Change |
Change % |
||||||||||||
Engineering and product development |
$ | 5,938 | $ | 6,751 | $ | (813 | ) | (12.0 | )% | |||||||
Marketing and sales |
9,218 | 9,281 | (63 | ) | (0.7 | )% | ||||||||||
General and administrative |
6,476 | 5,276 | 1,200 | 22.7 | % | |||||||||||
Amortization and depreciation |
153 | 206 | (53 | ) | (25.7 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 21,785 | $ | 21,514 | $ | 271 | 1.3 | % | ||||||||
|
|
|
|
|
|
|
|
Three months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
Change % |
|||||||||||||
Interest expense |
$ | (115 | ) | $ | (193 | ) | $ | 78 | (40.4 | )% | ||||||
Other income |
10 | 103 | (93 | ) | (90.3 | )% | ||||||||||
Loss on fair value of debentures |
— | (900 | ) | 900 | (100.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (105 | ) | $ | (990 | ) | $ | 885 | (89.4 | )% | |||||||
|
|
|
|
|
|
|
|
|||||||||
Tax benefit (expense) |
$ | (3 | ) | $ | (6 | ) | $ | 3 | (50.0 | )% |
Nine months ended September 30, |
||||||||||||||||
2020 |
2019 |
Change |
Change % |
|||||||||||||
Interest expense |
$ | (360 | ) | $ | (604 | ) | $ | 244 | (40.4 | )% | ||||||
Other income |
85 | 226 | (141 | ) | (62.4 | )% | ||||||||||
Loss on extinguishment of debt |
(341 | ) | — | (341 | ) | 0.0 | % | |||||||||
Loss on fair value of debentures |
(7,464 | ) | (5,340 | ) | (2,124 | ) | 39.8 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (8,080 | ) | $ | (5,718 | ) | $ | (2,362 | ) | 41.3 | % | ||||||
|
|
|
|
|
|
|
|
|||||||||
Tax benefit (expense) |
$ | (34 | ) | $ | (33 | ) | $ | (1 | ) | 3.0 | % |
For the nine-months ended September 30, |
||||||||
2020 |
2019 |
|||||||
(in thousands) | ||||||||
Net cash used for operating activities |
$ | (6,083 | ) | $ | (4,772 | ) | ||
Net cash used for investing activities |
(286 | ) | (219 | ) | ||||
Net cash provided by financing activities |
13,689 | 10,233 | ||||||
|
|
|
|
|||||
Increase in cash and equivalents |
$ | 7,320 | $ | 5,242 | ||||
|
|
|
|
Contractual Obligations |
Payments due by period |
|||||||||||||||||||
Total |
Less than 1 year |
1-3 years |
3-5 years |
5+ years |
||||||||||||||||
Operating Lease Obligations |
$ | 2,262 | $ | 918 | $ | 1,337 | $ | 7 | $ | — | ||||||||||
Capital Lease Obligations |
1 | 1 | — | — | — | |||||||||||||||
Settlement Obligations |
463 | 463 | — | — | — | |||||||||||||||
Notes Payable - principal and interest |
7,946 | 590 | 5,682 | 1,674 | — | |||||||||||||||
Other Commitments |
4,179 | 4,179 | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Contractual Obligations |
$ |
14,851 |
$ |
6,151 |
$ |
7,019 |
$ |
1,681 |
$ |
— |
||||||||||
|
|
|
|
|
|
|
|
|
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 4. |
Controls and Procedures |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors: |
Item 6. |
Exhibits |
Exhibit No. |
Description | |
31.1 * | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 * | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 ** | Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 ** | Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
101 * | The following materials formatted in XBRL (eXtensible Business Reporting Language); (i) Consolidated Balance Sheets as of 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 Cash Flows for the nine months ended September 30, 2020 and 2019, (iv) Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2020 and September 30, 2019 and (v) Notes to Consolidated Financial Statements. | |
104 * | Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). |
* | Filed herewith |
** | Furnished herewith |
iCAD, Inc. | ||
(Registrant) |
Date : November 6, 2020 |
By: | /s/ Michael Klein | ||||
Name: | Michael Klein | |||||
Title: | Chief Executive Officer (Principal Executive Officer) |
Date : November 6, 2020 |
By: | /s/ R. Scott Areglado | ||||
Name: | R. Scott Areglado | |||||
Title: | Chief Financial Officer (Principal Financial Officer) |
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Michael Klein, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 of iCAD, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 6, 2020
/s/ Michael Klein
Name: Michael Klein
Title: Chief Executive Officer
(Principal Executive Officer)
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, R. Scott Areglado, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2020 of iCAD, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting.
5. The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 6, 2020
/s/ R. Scott Areglado
Name: R. Scott Areglado
Title: Chief Financial Officer
(Principal Financial Officer)
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of iCAD, Inc. (the Company) on Form 10-Q for the quarterly period ended September 30, 2020 (the Report), I, Michael Klein, the Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Michael Klein
Name: Michael Klein
Title: Chief Executive Officer
(Principal Executive Officer)
Date: November 6, 2020
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of iCAD, Inc. (the Company) on Form 10-Q for the quarterly period ended September 30, 2020 (the Report), I, R. Scott Areglado, the Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ R. Scott Areglado
Name: R. Scott Areglado
Title: Chief Financial Officer
(Principal Financial Officer)
Date: November 6, 2020
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts on trade accounts receivable | $ 216 | $ 136 |
Property and equipment, accumulated depreciation and amortization | 6,716 | 6,510 |
Intangible assets, accumulated amortization | $ 8,418 | $ 8,186 |
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 23,155,482 | 19,546,151 |
Common stock, shares outstanding | 22,969,651 | 19,360,320 |
Treasury stock, shares | 185,831 | 185,831 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Revenue: | ||||
Total revenue | $ 7,129 | $ 7,857 | $ 19,247 | $ 21,959 |
Cost of revenue: | ||||
Amortization and depreciation | 92 | 103 | 287 | 297 |
Total cost of revenue | 2,104 | 1,803 | 5,355 | 4,897 |
Gross profit | 5,025 | 6,054 | 13,892 | 17,062 |
Operating expenses: | ||||
Engineering and product development | 1,849 | 2,485 | 5,938 | 6,751 |
Marketing and sales | 2,979 | 3,588 | 9,218 | 9,281 |
General and administrative | 1,834 | 1,872 | 6,476 | 5,276 |
Amortization and depreciation | 52 | 69 | 153 | 206 |
Total operating expenses | 6,714 | 8,014 | 21,785 | 21,514 |
Loss from operations | (1,689) | (1,960) | (7,893) | (4,452) |
Interest expense | (115) | (193) | (360) | (604) |
Other income | 10 | 103 | 85 | 226 |
Loss on extinguishment of debt | (341) | |||
Loss on fair value of convertible debentures | (900) | (7,464) | (5,340) | |
Other expense, net | (105) | (990) | (8,080) | (5,718) |
Loss before income tax expense | (1,794) | (2,950) | (15,973) | (10,170) |
Tax expense | (3) | (6) | (34) | (33) |
Net loss and comprehensive loss | $ (1,797) | $ (2,956) | $ (16,007) | $ (10,203) |
Net loss per share: | ||||
Basic | $ (0.08) | $ (0.15) | $ (0.73) | $ (0.57) |
Diluted | $ (0.08) | $ (0.15) | $ (0.73) | $ (0.57) |
Weighted average number of shares used in computing loss per share: | ||||
Basic | 23,173 | 19,284 | 21,827 | 18,049 |
Diluted | 23,173 | 19,284 | 21,827 | 18,049 |
Product [Member] | ||||
Revenue: | ||||
Total revenue | $ 4,538 | $ 5,156 | $ 11,220 | $ 13,331 |
Cost of revenue: | ||||
Total cost of revenue | 1,345 | 809 | 2,899 | 2,134 |
Service [Member] | ||||
Revenue: | ||||
Total revenue | 2,591 | 2,701 | 8,027 | 8,628 |
Cost of revenue: | ||||
Total cost of revenue | $ 667 | $ 891 | $ 2,169 | $ 2,466 |
Basis of Presentation and Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies | Note 1 – Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying condensed consolidated financial statements of iCAD, Inc. and subsidiaries (“iCAD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company at September 30, 2020, the results of operations of the Company for the three and nine-month periods ended September 30, 2020 and 2019, cash flows of the Company for the nine-month periods ended September 30, 2020 and 2019 and stockholders’ equity for the Company for the three and nine-month periods ended September 30, 2020 and 2019. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10 - K for the fiscal year ended December 31, 2019 filed with the SEC on March 11, 2020. The results for the three and nine-month periods ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020, or any future period.Segments The Company reports the results of two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products. The Therapy segment consists of radiation therapy (“Axxent”) products. Risk and Uncertainty On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of the COVID-19 pandemic, the United States, many countries in Europe, as well as Canada and China, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. As a provider of devices and services to the health care industry, the Company’s operations have been materially affected in part due to stay-at-home COVID-19 pandemic on the Company’s operations and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. The COVID-19 pandemic has resulted in significant financial market volatility and uncertainty. A continuation or worsening of the levels of market disruption and volatility seen in the recent past will have an adverse effect on the Company’s ability to access capital, on its business, results of operations and financial condition, and on the market price of its common stock. The impact of the COVID-19 pandemic is also relevant to the covenants contained in the Company’s loan and security agreement, as amended (the “Loan Agreement”), with Western Alliance Bank (the “Bank”), as described in Note 4(a). The Loan Agreement requires the Company to satisfy a minimum revenue covenant or maintain a ratio of (x) unrestricted cash at the Bank to (y) the aggregate total of indebtedness owed to the Bank, equal to or greater than to 1.00. If at any point the Company is not in compliance with at least one of these and certain other covenants and is unable to obtain an amendment or waiver from the Bank , such noncompliance may result in an event of default under the Loan Agreement, which could result in acceleration of the outstanding indebtedness and require the Company to repay such indebtedness before the scheduled due date. However, the Company believes that even if an event of default were to occur, the Company’s current liquidity and capital resources are sufficient to sustain operations through at least the next 12 months, primarily due to cash on hand of $ 22.6 million and anticipated revenue and cash collections. However, the resurgence of the COVID-19 pandemic could affect our liquidity. The Company’s results for the quarter ending September 30, 2020 reflect a negative impact from the COVID-19 pandemic, as the typical sales cycle and ordering patterns were still disrupted due to some healthcare facilities’ additional focus on COVID-19. Although the Company does not provide guidance to investors relating to its future results of operations, its results for the quarter ending December 31, 2020, and possibly future quarters, could reflect a continuing negative impact from the COVID-19 pandemic for similar reasons. Depending upon the duration and severity of the pandemic, the continuing effect on the Company’s results over the long term is uncertain.Although the Company did not see any material impact to trade accounts receivable losses in the quarter ended September 30, 2020, the Company’s exposure may increase if its customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. The Company has historically not experienced significant trade account receivable losses, but it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade account receivables as hospitals’ cash flows are impacted by their response to the COVID-19 pandemic. Recently Adopted Accounting Pronouncements There are no significant recently adopted accounting pronouncements. For a full list of the Company’s response to all relevant recent accounting pronouncements, please refer to Note 13 below. Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities. Disaggregation of Revenue The following tables presents the Company’s revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel, reconciled to its reportable segments (in thousands).
Products. Service Contracts. , including product installations, maintenance, training, and service repairs, and in certain cases leases equipment, to hospitals, imaging centers, radiology practices, radiation oncologists and treatment centers. These contracts non-lease components, or the entire arrangement when accounted for under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), Supply and Source Usage Agreements. These agreements represent a separate performance obligation to the Company. The Company allocates revenue to each performance obligation based on the SSP. Professional Services. Other. Other revenue consists primarily of miscellaneous products and services. The Company transfers control and recognizes a sale when the product is shipped from the manufacturing or warehousing facility to the customer or the installation services are performed . Contract Balances Contract liabilities are a component of deferred revenue, and contract assets are a component of prepaid and other current assets. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands).
Timing of revenue recognition may differ from timing of invoicing of customers. The Company records a receivable when revenue is recognized prior to receipt of cash payment and the Company has the unconditional right to such consideration, or unearned revenue when cash payments are received or due in advance of performance. For multi-year agreements, the Company generally invoices customers annually at the beginning of each annual service period. The Company’s accounts receivable from contracts with customers, net of allowance for doubtful accounts, was $8.4 million and $9.8 million as of September 30, 2020 and December 31, 2019, respectively. The Company will record a contract asset for unbilled revenue when the Company’s performance is in excess of amounts billed or billable. The Company has classified the contract asset balance as a component of prepaid expenses and other current assets as of September 30, 2020 and December 31, 2019. The contract asset balance was $7,000 as of September 30, 2020 and $14,000 as of December 31, 2019. Deferred revenue from contracts with customers, which is included in deferred revenue in the consolidated balance sheet, is primarily composed of fees related to service arrangements, which are generally billed in advance. Deferred revenue also includes payments for installation and training that has not yet been completed and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The balance of deferred revenue at September 30, 2020 and December 31, 2019 is as follows (in thousands):
Changes in deferred revenue from contracts with customers were as follows (in thousands):
We expect to recognize approximately $3.2 million of the deferred amount in 2020, $2.5 million in 2021, and $0.2 million thereafter. |
Net Loss per Common Share |
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Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net Loss per Common Share | Note 2 – Net Loss per Common Share The Company’s basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding for the period. A summary of the Company’s calculation of net loss per share is as follows (in thousands except per share amounts):
The shares of the Company’s common stock issuable upo n the exercise of convertible securities, stock options and vesting of restricted stock that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive are as follows:
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Inventory |
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory | Note 3 – Inventory Inventory is valued at the lower of cost or net realizable value, with cost determined by the first-in, first-out method. The Company regularly reviews inventory quantities on hand and records a reserve for excess and/or obsolete inventory primarily based upon the estimated usage of its inventory as well as other factors. Inventory includes
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Financing Arrangements |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financing Arrangements | Note 4 – Financing Arrangements (a) Loan and Security Agreement – Western Alliance Bank On March 30, 2020, the Company entered into the Loan Agreement with the Bank that provided an initial term loan (“Term Loan”) facility of $7.0 million and a $5.0 million revolving line of credit. The Loan Agreement was amended effective June 16, 2020. The Loan Agreement requires the Company to either (i) meet a minimum revenue covenant, or (ii) maintain a ratio of unrestricted cash at the Bank to aggregate indebtedness owed to the Bank of at least 1.25 to 1.00. The Company was compliant with these covenants as of September 30, 2020 but cannot provide any assurance as to its future compliance due to, in part, the uncertainty of the effect of the COVID-19 pandemic on the world economy and the U.S. health system. If at any point the Company is not in compliance with certain covenants under the Loan Agreement and is unable to obtain an amendment or waiver, such noncompliance may result in an event of default under the Loan Agreement, which could permit acceleration of the outstanding indebtedness and require the Company to repay such indebtedness before the scheduled due date. The Company was required, periodically in the past, to seek modifications from its prior lender to avoid non-compliance with its earlier covenants. Interest in arrears on the Term Loan began to be repaid on April 1, 2020 and will continue to be paid on the first of each successive month thereafter until the principal repayment starts. Commencing on the principal repayment date of September 1, 2021 (or March 1, 2022 if the Company achieves a specified revenue target for any trailing six-month period prior to December 31, 2020) and continuing on the first day of each month thereafter, the Company will make equal monthly payments of principal, together with applicable interest in arrears, to the Bank. The interest rate is set at 1% above the Prime Rate, which The Company has the option to prepay all, but not less than all, of the Term Loan advanced by the Bank under the Loan Agreement. The Company prepayment is subject to payment of (1) all outstanding principal of the Term Loan plus accrued and unpaid interest thereon through the prepayment date, (2) the final payment ($122,500 or 1.75% of the original loan amount), (3) prior to first March 30, 2021, 2% of principal if prepaid after March 30, 2021 but before June 30, 2022, or 1% of principal if prepaid after March 30, 2022) plus (4) all other obligations that are due and payable, including the Bank’s expenses and interest at the default rate with respect to any past due amounts.The Company drew $ 775,000 against its revolving line of credit as of September 30, 2020. The interest rate on such borrowings is three quarters-percent (0.75%) above the Prime Rate as defined above or 4.0%. The Company paid back this borrowing on October 5, 2020. Obligations to the Bank under the Loan Agreement are secured by a first priority security interest in the Company’s assets, except for certain permitted liens that have priority to the Bank’s security interest by operation of law. In connection with the Loan Agreement, the Company incurred approximately $141,000 of closing costs. The closing costs have been deduced from the carrying value of the debt and will be amortized through March 30, 2022, the maturity date of the Term Loan. The maturity date of the revolving loan is March 30, 2022. (b) Loan and Security Agreement – Silicon Valley Bank On August 7, 2017, the Company entered into a Loan and Security Agreement, which has since been modified several times through November 1, 2019 (as amended, the “SVB Loan Agreement ”), with Silicon Valley Bank that provided an initial term loan facility of $6.0 million and a $4.0 million revolving line of credit. On March 30, 2020, the Company elected to repay all outstanding obligations (including accrued interest) and retire the SVB Loan Agreement. The Company accounted for this repayment and retirement as an extinguishment of the SVB Loan Agreement. In addition to the outstanding principal and accrued interest, the Company was required to pay the $510,000 final payment, a termination fee of $114,000 and other costs totaling $10,000. The Company also wrote off unamortized original closing costs as of the extinguishment date. The Company recorded a loss on extinguishment of approximately $341,000 related to the repayment and retirement of the SVB Loan Agreement. The loss on extinguishment was composed of approximately $185,000 for the unaccrued final payment, $114,000 termination fee, and $42,000 of unamortized and other closing costs. (c) Convertible Debentures On December 20, 2018, the Company entered into a Securities Purchase Agreement (the “SPA”) with certain institutional and accredited investors (the “Investors”), including , but not limited to, all directors and executive officers of the Company at the time , pursuant to which the Investors purchased unsecured subordinated convertible debentures (the “Convertible Debentures”) with an aggregate principal amount of approximately $7.0 million in a private placement. On February 21, 2020 (the “Conversion Date”), the conditions permitting a forced conversion were met, and the Company elected to exercise its forced conversion right under the terms of the Convertible Debentures. As a result of this election, all of the outstanding Convertible Debentures were converted, at a conversion price of $4.00 per share, into 1,742,500 shares of the Company’s common stock. In accordance with the make-whole provisions in the Convertible Debentures, the Company also issued an additional 76,966 shares of 697,000its common stock. The make-whole amount represented the total interest which would have accrued through the maturity date of the Convertible Debentures, less the amounts previously paid, totaling $. The conversion prices related to the make-whole amount were dependent on whether the Investors were related parties or unrelated third parties. Accounting Considerations and Fair Value Measurements Related to the Convertible Debentures The Company had previously elected to make a one-time, irrevocable election to utilize the fair value option to account for the Convertible Debentures as a single hybrid instrument at its fair value, with changes in fair value from period to period being recorded either in current earnings, or as an element of other comprehensive income (loss), for the portion of the change in fair value determined to relate to the Company’s own credit risk. The Company believed that the election of the fair value option allowed for a more meaningful representation of the total fair value of its obligation under the Convertible Debentures and allowed for a better understanding of how changes in the external market environment and valuation assumptions impact such fair value.As of the December 31, 2019 valuation and the prior measurement dates, the Company utilized a Monte Carlo simulation model to estimate the fair value of the Convertible Debentures. The simulation model was designed to capture the potential settlement features of the Convertible Debentures, in conjunction with simulated changes in the Company’s stock price and the probability of certain events occurring. The simulation utilized 100,000 trials or simulations to determine the estimated fair value. The simulation utilized the assumptions that if the Company was able to exercise its forced conversion right (if the requirements to do so were met), that it would do so in 100% of such scenarios. Additionally, if an event of default occurred during the simulated trial (based on the Company’s probability of default), the Investors would opt to redeem the Convertible Debentures in 100% of such scenarios. If neither event occurred during a simulated trial, the simulation assumed that the Investor would hold the Convertible Debentures until the maturity date. The value of the cash flows associated with each potential settlement were discounted to present value in each trial based on either the risk-free rate (for an equity settlement) or the effective discount rate (for a redemption or cash settlement). The Company also recorded a final adjustment to the Convertible Debentures based on their fair value on the Conversion Date, just prior to the forced conversion being completed. Given that the Company’s prior simulation model included the assumption that the Company would elect to force conversion in 100% of scenarios when the requirements were met, the final valuation was based on the actual results of the forced conversion. As such, the Company based the final fair value adjustment to the Convertible Debentures just prior to conversion on the number of shares of common stoc k that were issued to the Investors upon conversion and the fair value of the Company’s common stock as of the Conversion Date. The Company notes that the key inputs to the valuation models that were utilized to estimate the fair value of the Convertible Debentures included:
The Company’s stock price was based on the closing stock price on the valuation date. The conversion price was based on the contractual conversion price included in the SPA. The remaining term was determined based on the remaining time period to maturity of the Convertible Debentures, or remaining term under the expectation of the Company’s election of its forced conversion right. The Company’s equity volatility estimate was based on the Company’s historical equity volatility, the Company’s implied and observed volatility of option pricing, and the historical equity and observed volatility of option pricing for a selection of public companies. The risk-free rate was determined based on U.S. Treasury securities with similar terms. The probability of the occurrence of a default event was based on Bloomberg’s 1-year estimate of default risk for the Company (extrapolated over the remaining term).The utilization of the forced conversion right and the default redemption right was based on management’s best estimate of both features being exercised upon the occurrence of the related contingent events. The effective discount rate utilized at the December 31, 2019 valuation date was based on yields on CCC-rated debt instruments with terms equivalent to the remaining term of the Convertible Debentures. The credit rating estimate was based on the implied credit rating determined at issuance and no changes were identified by the Company that would impact this assessment.The fair value and principal value of the Convertible Debentures as of December 31, 2019 and the Conversion Date was as follows (in thousands):
The Company recorded a loss from the change in fair value of the Convertible Debentures of approximately $7.5 million for period through the C onversion D ate which is described in the additional fair value disclosures related to the Convertible Debentures in Note 8. Upon the consummation of the forced conversion , the Company issued 1,816,466 shares of common stock with a fair value of approximately $21.2 million, which was reclassified to stockholders’ equity. (d) Principal and Interest Payments Related to Financing Arrangements Future principal, interest payments, and final payment related to the Loan Agreement are as follows (in thousands):
The following amounts are included in interest expense in the Company’ s consolidated statement of operations for the three and nine months ended September 30, 2020 and 2019 (in thousands):
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Lease Commitments |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Commitments | Note 5 – Le ase Commitments Under ASC 842, “Leases” (“ASC 842”), the Company determines if an arrangement contains a lease at inception. A lease is a contract, or part of a contract, that conveys the right to control the use of identified property, plant or equipment (i.e., an identified asset) for a period of time in exchange for consideration. Leases are classified as either operating leases or financing leases. At lease inception, the Company recognizes a lease liability equal to the present value of the remaining lease payments, and a right of use asset equal to the lease liability, subject to certain adjustments, such as for lease incentives. The Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company determines the incremental borrowing rates for its leases by applying its applicable, fully collateralized borrowing rate, with adjustment as appropriate for the lease term. The lease term at the lease commencement date is determined based on the non-cancellable period for which the Company has the right to use the underlying asset, together with any periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option. The Company considers a number of factors when evaluating whether the options in its lease contracts are reasonably certain of exercise, such as length of time before option exercise, expected value of the leased asset at the end of the initial lease term, importance of the lease to overall operations, costs to negotiate a new lease, and any contractual or economic penalties. Right-of-use non-lease components. As the Company has determined that the non-lease component of these agreements is the predominant component, the Company accounted for the complete agreement under ASC 606 upon adoption of ASC 842. ASC 842 includes a number of reassessment and re-measurement requirements for lessees based on certain triggering events or conditions, including whether a contract is or contains a lease, assessment of lease term and purchase options, measurement of lease payments, assessment of lease classification and assessment of the discount rate. The Company reviewed the reassessment and re-measurement requirements and identified two lease modifications which are reflected in the table below showing the maturity of the Company’s lease liabilities as of September 30, 2020. This includes an extension of an operating lease for the facility leased by the Company in San Jose, California as well as some equipment. In addition, there were no impairment indicators identified during the quarter ended September 30, 2020 that required an impairment test for the Company’s right-of-use Certain of the Company’s leases include variable lease costs to reimburse the lessor for real estate tax and insurance expenses, and certain non-lease components that transfer a distinct service to the Company, such as common area maintenance services. The Company has elected to not separate its accounting of lease components and non-lease components for real estate and equipment leases.Components of Le a ses:The Company has leases for office space and office equipment. The leases have remaining lease terms ranging from less than one year to three years and t months as of September 30, 2020. hree The components of lease expense for the period are as follows (in thousands):
Other information related to le a ses was as follows (in thousands)
Maturity of the Company’s lease liabilities as of September 30, 2020 was as follows (in thousands):
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Stock-Based Compensation |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Note 6 – Stock-Based Compensation The Company granted options to purchase 17,029 and 540,886 shares of the Company’s stock during the three and nine months ended September 30, 2020, respectively. Options granted under the Company’s stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:
The Company’s stock-based compensation expense, including options and restricted stock by category is as follows (in thousands):
As of September 30, 2020, unrecognized compensation cost (in thousands) related to unvested options and unvested restricted stock and the weighted average term of such equity instruments is as follows:
The Company’s restricted stock awards typically vest in either one year or three equal annual installments with the first installment vesting one year from the grant date. The Company granted 0 and 14,000 shares of restricted stock during the nine-month periods ended September 30, 2020 and 2019, respectively. The Company’s aggregate intrinsic value for stock options and restricted stock outstanding is as follows (in thousands):
The Company issued 49,712 and 94,678 shares of common stock upon the exercise of outstanding stock options in the three and nine-month periods ended September 30, 2020, respectively. The Company received cash proceeds of approximately $185,000 and $417,000 in the three and nine-month periods ended September 30, 2020, respectively. The intrinsic value of restricted shares that vested in the nine months ended September 30, 2020 was $0.6 million. 38,160 restricted shares vested in the three months ended September 30, 2020 while another 3,666 were cancelled. Employee Stock Purchase Plan In December 2019, the 2019 Empl o yee Stock Purchase Plan (“ESPP”) was adopted by the Company’s Board of Directors (the “Board”) and approved by stockholders, effective January 1, 2020. The ESPP provides for the issuance of up to 950,000 shares of common stock, subject to adjustment in the event of a stock split, stock dividend or other change in the Company’s capitalization. The ESPP may be terminated or amended by the Board at any time. Certain amendments to the ESPP require stockholder approval. Substantially all of the Company’s employees whose customary employment is for more than 20 hours a week are eligible to participate in the ESPP. Any employee who owns 5% or more of the voting power or value of the Company’s shares of common stock is not eligible to participate in the ESPP. Any eligible employee can enroll in the ESPP as of the beginning of a respective quarterly accumulation period. Employees who participate in the ESPP may purchase shares by authorizing payroll deductions of up to 15% of their base compensation during an accumulation period. Unless the participating employee withdraws from participation, accumulated payroll deductions are used to purchase shares of common stock on the last business day of the accumulation period (the “Purchase Date”) at a price equal to 85% of the lower of the fair market value on (i) the Purchase Date or (ii) the first day of such accumulation period. Under applicable tax rules, no employee may purchase more than $25,000 worth of common stock, valued at the start of the purchase period, under the ESPP in any calendar year. The Company issued 16,392 and 34,857 shares under the ESPP in the three and nine-month periods ended September 30, 2020, respectively. The Company recorded approximately $19,000 and $84,000 of stock-based compensation expense pursuant to ESPP for the three and nine-month periods ended September 30, 2020, respectively. The third accumulation period under the ESPP commenced on July 1, 2020 and ended on September 30,2020, and the related shares purcha s ed by the participants were issued in October 2020. As of September 30, 2020, the Company recorded a liability of $ 58,000 related to employee withholdings in connection with the ESPP accumulation period ended September 30, 2020, which was included as a component of accrued expenses and other current liabilities. |
Commitments and Contingencies |
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Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies Foreign Tax Claim In July 2007, a dissolved former Canadian subsidiary of the Company, CADx Medical Systems Inc. (“CADx Medical”), received a tax re-assessment of approximately $6,800,000 from the Canada Revenue Agency (“CRA”) resulting from the CRA’s audit of CADx Medical’s Canadian federal tax return for the year ended December 31, 2002. In February 2010, the CRA reviewed the matter and reduced the tax re-assessment to approximately $703,000, excluding interest and penalties. The CRA had the right to pursue the matter until July 2020 and did not do so, and accordingly no accrual has been recorded for this matter as of September 30, 2020. Other Commitments The Company is obligated to pay approximately $4.2 million for firm purchase obligations to suppliers for future product and service deliverables. Litigation In December 2016, the Company entered into an Asset Purchase Agreement with Invivo Corporation (the “Asset Purchase Agreement”). In accordance with the Asset Purchase Agreement, the Company sold to Invivo all right, title and interest to certain intellectual property relating to the Company’s VersaVue Software and DynaCAD product and related assets for $ 3.2 million. The Company closed the transaction on January 30, less a holdback reserve of $ 350,000 for net 2.9pr of approximately $o ceeds million. On September 5, 2018, third-party Yeda Research and Development Company Ltd. (“Yeda”), filed a complaint (the “Complaint”) against the Company and Invivo in the United States District Court for the Southern District of New York, captioned Yeda Research and Development Company Ltd. v. iCAD, Inc. and Invivo Corporation, Case No. 1:18-cv-08083-GBD, The Company may be a party to various legal proceedings and claims arising out of the ordinary course of its business. Although the final results of all such matters and claims cannot be predicted with certainty, the Company currently believes that there are no current proceedings or claims pending against it the ultimate resolution of which would have a material adverse effect on its financial condition or results of operations, other than as set forth above. However, should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, such matters could have a material adverse effect on the Company’s operating results and cash flows for that particular period. The Company may be a party to certain actions that have been filed against the Company which are being vigorously defended. The Company has determined that potential losses in these matters are neither probable or reasonably possible at this time. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, “Contingencies.” Legal costs are expensed as incurred. The Company files United States federal income tax returns and income tax returns in various states and local jurisdictions. The Company’s three preceding tax years remain subject to examination by federal and state tax authorities. In addition, because the Company has net operating loss carry-forwards, the Internal Revenue Service and state jurisdictions are permitted to audit earlier years and propose adjustments up to the amount of net operating loss generated in those years. The Company is not currently under examination by any federal or state jurisdiction for any tax years. |
Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Note 8 - Fair Value Measurements Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset
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. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and notes payable and convertible debentures. Due to their short-term nature and market rates of interest, the carrying amounts of the financial instruments (except the Convertible Debentures, which were measured at fair value in accordance with the fair value option election) approximated fair value as of February 21, 2020 and December 31, 2019. The Company’s assets and liabilities that are measured at fair value on a recurring basis include the Company’s money market accounts and Convertible Debentures. The money market accounts are included in cash and cash equivalents in the accompanying consolidated balance sheet and are considered a Level 1 measurement as they are valued at quoted market prices in active markets. The Convertible Debentures were recorded as a separate component of the Company’s consolidated balance sheet and are considered a Level 3 measurement due to the utilization of significant unobservable inputs in their valuation. See Note 4(b) for a discussion of these fair value measurements. The following table sets forth the Company’s assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands).
The following sets forth a reconciliation of the changes in the fair value of the Convertible Debentures that were converted to equity during the nine months ended September 30, 2020 (in thousands):
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Income Taxes |
9 Months Ended |
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Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 9 - Income Taxes The Coronavirus Aid, Relief, and Economic Security Act was enacted on March 27, 2020 and did not have a material impact on the Company’s provision for income taxes for the three and nine months ended September 30, 2020. The Company recorded an income tax provision of $3,000 and $34,000 for the three and nine months ended September 30, 2020, respectively, and $6,000 and $33,000 for the three and nine months ended September 30, 2019, respectively. The Company had no material unrecognized tax benefits and a deferred tax liability of approximately $4,000 related to tax amortizable goodwill. No other adjustments were required under ASC 740, “Income Taxes.” The Company does not expect that its unrecognized tax benefits will materially increase within the next 12 months. The Company did not recognize any interest or penalties related to uncertain tax positions at September 30, 2020. The Company files United States federal income tax returns and income tax returns in various states and local jurisdictions. The Company’s three preceding tax years remain subject to examination by federal and state tax authorities. In addition, because the Company has net operating loss carry-forwards, the Internal Revenue Service and state jurisdictions are permitted to audit earlier years and propose adjustments up to the amount of net operating loss generated in those years. The Company is not currently under examination by any federal or state jurisdiction for any tax years. |
Goodwill |
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Goodwill | Note 10 - Goodwill The Company tests goodwill for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying value. Factors the Company considers important, which could trigger an impairment of such asset, include the following:
The Company considered the goodwill impairment factors due to the uncertainty around the continuing impact of the COVID-19 pandemic on the Company’s operations and on the global economy as a whole. Under this consideration the Company performed scenario testing as of March 31, 2020 updating the projections to the most recent impairment analysis performed as of October 1, 2019. The Company compared the scenario test again against current forecasts as of September 30, 2020 and concluded that it did not have a triggering event or impairment indicators in the quarter ended September 30, 2020.The Company would record an impairment charge when such assessment indicates that the fair value of a reporting unit is less than the carrying value. In evaluating potential impairments outside of the annual measurement date, judgment is required in determining whether an event has occurred that may impair the value of goodwill or intangible assets. The Company utilizes either discounted cash flow models or other valuation models, such as comparative transactions and market multiples, to determine the fair value of reporting units. The Company makes assumptions about future cash flows, future operating plans, discount rates, comparable companies, market multiples, purchase price premiums and other factors in those models. Different assumptions and judgment determinations could yield different conclusions that would result in an impairment charge to income in the period that such change or determination was made. The Company determines the fair values for each reporting unit using a weighting of the income approach and the market approach. For purposes of the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk adjusted rate. The Company uses internal forecasts to estimate future cash flows and includes estimates of long-term future growth rates based on its most recent views of the long-term forecast for each segment. Accordingly, actual results can differ from those assumed in the Company’s forecasts. Discount rates are derived from a capital asset pricing model and by analyzing published rates for industries relevant to the Company’s reporting units to estimate the cost of equity financing. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses of its reporting units and in the Company’s internally developed forecasts. In the market approach, the Company uses a valuation technique in which values are derived based on market prices of publicly traded companies with similar operating characteristics and in similar industries. A market approach allows for comparison to actual market transactions and multiples. It can be somewhat limited in its application because the population of potential comparable publicly-traded companies can be limited due to differing characteristics of the comparative business and the Company, as well as the fact that market data may not be available for divisions within larger conglomerates or non-public subsidiaries that could otherwise qualify as comparable, and the specific circumstances surrounding a market transaction (e.g., synergies between the parties, terms and conditions of the transaction, etc.) may be different or irrelevant with respect to the business. The Company corroborates the total fair values of the reporting units using a market capitalization approach; however, this approach cannot be used to determine the fair value of each reporting unit. The blend of the income approach and market approach is more closely aligned to the business profile of the Company, including markets served and products available. In addition, required rates of return, along with uncertainties inherent in the forecast of future cash flows, are reflected in the selection of the discount rate. In addition, under the blended approach, reasonably likely scenarios and associated sensitivities can be developed for alternative future states that may not be reflected in an observable market price. The Company will assess each valuation methodology based upon the relevance and availability of the data at the time the valuation is performed and weights the methodologies appropriately. The Company has two operating segments, Detection and Therapy, as further discussed in Note 12 below. A rollforward of goodwill activity by reportable segment is as follows (in thousands):
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Long-lived assets |
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Property, Plant and Equipment [Abstract] | |||||||||||||||||||||
Long-lived assets | Note 11 – Long-lived assets The Company assesses long-lived assets for impairment if events and circumstances indicate it is more likely than not that the fair value of the asset group is less than its carrying value. There is no set interval or frequency for recoverability evaluation. Rather, the determination of when, if at all, an asset (or asset group) is evaluated for recoverability is based on “events and circumstances.” The following factors are examples of events or changes in circumstances that indicate the carrying amount of an asset (or asset group) may not be recoverable and thus is to be evaluated for recoverability.
The Company determined there were no such triggering events in the quarter ended September 30, 2020. If the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be fully recoverable (e.g., the carrying amount exceeds the estimated gross, undiscounted cash flows from use and disposition), then an impairment loss must be recognized. The impairment loss is measured as the excess of the carrying amount over the fair value of the asset (or asset group). The Company determined the “Asset Group” of the Company to be the assets of the Therapy segment and the Detection segment, which the Company considers to be the lowest level for which the identifiable cash flows were largely independent of the cash flows of other assets and liabilities. A considerable amount of judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of the asset group and the reporting unit. While the Company believes that its judgments and assumptions are reasonable, different assumptions could change the estimated fair values and, therefore additional impairment charges could be required. Significant negative industry or economic trends, disruptions to the Company’s business, loss of significant customers, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets may adversely impact the assumptions used in the fair value estimates and ultimately result in future impairment charges. |
Segment Reporting |
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Segment Reporting | Note 12 – Segment Reporting Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. The Company’s CODM is the Chief Executive Officer. Each reportable segment generates revenue from the sale of medical equipment and related services and/or sale of supplies. The Company has determined there are two segments, Detection and Therapy. The Detection segment consists of the Company’s advanced image analysis and workflow products, and the Therapy segment consists of the Company’s radiation therapy products, “Axxent,” and related services. The primary factors used by the Company’s CODM to allocate resources are based on revenues, gross profit, operating income, and earnings or loss before interest, taxes, depreciation, amortization, and other specific and non-recurring items of each segment. Included in segment operating income are stock compensation, amortization of technology and depreciation expense. There are no intersegment revenues. The Company does not track assets by operating segment and the Company’s CODM does not use asset information by segment to allocate resources or make operating decisions. Segment revenues, gross profit, segment operating income or loss, and a reconciliation of segment operating income or loss to US GAAP loss before income tax is as follows (in thousands):
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Recent Accounting Pronouncements |
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Sep. 30, 2020 | |
Text Block [Abstract] | |
Recent Accounting Pronouncements | Note 13 - Recent Accounting Pronouncements Recently Adopted Accounting Standards On January 1, 2020, the Company adopted ASU 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 removes, modifies and adds certain disclosure requirements of ASC Topic 820. ASU 2018-13 is effective for Company for the fiscal year and interim periods therein beginning January 1, 2020. The Company notes that the adoption of ASU 2018-13 did not have a material impact on its consolidated financial statements. Recently Issued Accounting Standards Not Yet Adopted In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326)” (“ASU 2016-13”), which requires the measurement and recognition of expected credit losses for financial assets held at amortized cost. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss model which requires the use of forward-lookinginformation to calculate credit loss estimates. These changes will result in earlier recognition of credit losses. In November 2019, the FASB elected to defer the adoption date of ASU 2016-13 for public business entities that meet the definition of a smaller reporting company to fiscal years beginning after December 15, 2022. Early adoption of the guidance in ASU 2016-13 is permitted. The Company is currently evaluating the impact that the adoption of ASU 2016-13 will have on its consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes” (“ASU 2019-12”). ASU 2019-12 is intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify US GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for the Company for the fiscal year and interim periods therein beginning January 1, 2021. The Company will adopt ASU 2019-12 on January 1, 2021 and will account for income taxes in accordance with ASU 2019-12 at that time. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting” (“ASU 2020-04”). ASU 2020-04 was issued because the London Interbank Offered Rate (“LIBOR”) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities, and at the end of 2021, banks will no longer be required to report information that is used to determine LIBOR. As a result, LIBOR is expected to be discontinued as a benchmark interest rate. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. Companies can apply the ASU immediately. However, the guidance will only be available for a limited time (generally through December 31, 2022). The Company is currently evaluating the impact that the adoption of ASU 2020-04 will have on its consolidated financial statements. |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of iCAD, Inc. and subsidiaries (“iCAD” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). In the opinion of management, these unaudited interim condensed consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the financial position of the Company at September 30, 2020, the results of operations of the Company for the three and nine-month periods ended September 30, 2020 and 2019, cash flows of the Company for the nine-month periods ended September 30, 2020 and 2019 and stockholders’ equity for the Company for the three and nine-month periods ended September 30, 2020 and 2019. Although the Company believes that the disclosures in these financial statements are adequate to make the information presented not misleading, certain information normally included in the footnotes prepared in accordance with US GAAP has been omitted as permitted by the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10 - K for the fiscal year ended December 31, 2019 filed with the SEC on March 11, 2020. The results for the three and nine-month periods ended September 30, 2020 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2020, or any future period. |
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Segments | Segments The Company reports the results of two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products. The Therapy segment consists of radiation therapy (“Axxent”) products. |
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Risk and Uncertainty | Risk and Uncertainty On March 12, 2020, the World Health Organization declared COVID-19 to be a pandemic. In an effort to contain and mitigate the spread of the COVID-19 pandemic, the United States, many countries in Europe, as well as Canada and China, have imposed unprecedented restrictions on travel, and there have been business closures and a substantial reduction in economic activity in countries that have had significant outbreaks of COVID-19. As a provider of devices and services to the health care industry, the Company’s operations have been materially affected in part due to stay-at-home COVID-19 pandemic on the Company’s operations and on the global economy as a whole. It is currently not possible to predict how long the pandemic will last or the time that it will take for economic activity to return to prior levels. The COVID-19 pandemic has resulted in significant financial market volatility and uncertainty. A continuation or worsening of the levels of market disruption and volatility seen in the recent past will have an adverse effect on the Company’s ability to access capital, on its business, results of operations and financial condition, and on the market price of its common stock. The impact of the COVID-19 pandemic is also relevant to the covenants contained in the Company’s loan and security agreement, as amended (the “Loan Agreement”), with Western Alliance Bank (the “Bank”), as described in Note 4(a). The Loan Agreement requires the Company to satisfy a minimum revenue covenant or maintain a ratio of (x) unrestricted cash at the Bank to (y) the aggregate total of indebtedness owed to the Bank, equal to or greater than to 1.00. If at any point the Company is not in compliance with at least one of these and certain other covenants and is unable to obtain an amendment or waiver from the Bank , such noncompliance may result in an event of default under the Loan Agreement, which could result in acceleration of the outstanding indebtedness and require the Company to repay such indebtedness before the scheduled due date. However, the Company believes that even if an event of default were to occur, the Company’s current liquidity and capital resources are sufficient to sustain operations through at least the next 12 months, primarily due to cash on hand of $ 22.6 million and anticipated revenue and cash collections. However, the resurgence of the COVID-19 pandemic could affect our liquidity. The Company’s results for the quarter ending September 30, 2020 reflect a negative impact from the COVID-19 pandemic, as the typical sales cycle and ordering patterns were still disrupted due to some healthcare facilities’ additional focus on COVID-19. Although the Company does not provide guidance to investors relating to its future results of operations, its results for the quarter ending December 31, 2020, and possibly future quarters, could reflect a continuing negative impact from the COVID-19 pandemic for similar reasons. Depending upon the duration and severity of the pandemic, the continuing effect on the Company’s results over the long term is uncertain.Although the Company did not see any material impact to trade accounts receivable losses in the quarter ended September 30, 2020, the Company’s exposure may increase if its customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current
COVID-19 pandemic, or other customer-specific factors. The Company has historically not experienced significant trade account receivable losses, but it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade account receivables as hospitals’ cash flows are impacted by their response to the COVID-19 pandemic. |
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Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements There are no significant recently adopted accounting pronouncements. For a full list of the Company’s response to all relevant recent accounting pronouncements, please refer to Note 13 below. |
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Revenue Recognition | Revenue Recognition Revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration which the Company expects to be entitled to receive in exchange for these goods or services and excludes any sales incentives or taxes collected from customers which are subsequently remitted to government authorities. Disaggregation of Revenue The following tables presents the Company’s revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel, reconciled to its reportable segments (in thousands).
Products. Service Contracts. , including product installations, maintenance, training, and service repairs, and in certain cases leases equipment, to hospitals, imaging centers, radiology practices, radiation oncologists and treatment centers. These contracts non-lease components, or the entire arrangement when accounted for under ASC 606, “Revenue from Contracts with Customers” (“ASC 606”), Supply and Source Usage Agreements. These agreements represent a separate performance obligation to the Company. The Company allocates revenue to each performance obligation based on the SSP. Professional Services. Other. Other revenue consists primarily of miscellaneous products and services. The Company transfers control and recognizes a sale when the product is shipped from the manufacturing or warehousing facility to the customer or the installation services are performed . Contract Balances Contract liabilities are a component of deferred revenue, and contract assets are a component of prepaid and other current assets. The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands).
Timing of revenue recognition may differ from timing of invoicing of customers. The Company records a receivable when revenue is recognized prior to receipt of cash payment and the Company has the unconditional right to such consideration, or unearned revenue when cash payments are received or due in advance of performance. For multi-year agreements, the Company generally invoices customers annually at the beginning of each annual service period. The Company’s accounts receivable from contracts with customers, net of allowance for doubtful accounts, was $8.4 million and $9.8 million as of September 30, 2020 and December 31, 2019, respectively. The Company will record a contract asset for unbilled revenue when the Company’s performance is in excess of amounts billed or billable. The Company has classified the contract asset balance as a component of prepaid expenses and other current assets as of September 30, 2020 and December 31, 2019. The contract asset balance was $7,000 as of September 30, 2020 and $14,000 as of December 31, 2019. Deferred revenue from contracts with customers, which is included in deferred revenue in the consolidated balance sheet, is primarily composed of fees related to service arrangements, which are generally billed in advance. Deferred revenue also includes payments for installation and training that has not yet been completed and other offerings for which we have been paid in advance and earn the revenue when we transfer control of the product or service. The balance of deferred revenue at September 30, 2020 and December 31, 2019 is as follows (in thousands):
Changes in deferred revenue from contracts with customers were as follows (in thousands):
We expect to recognize approximately $3.2 million of the deferred amount in 2020, $2.5 million in 2021, and $0.2 million thereafter. |
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Litigation | In December 2016, the Company entered into an Asset Purchase Agreement with Invivo Corporation (the “Asset Purchase Agreement”). In accordance with the Asset Purchase Agreement, the Company sold to Invivo all right, title and interest to certain intellectual property relating to the Company’s VersaVue Software and DynaCAD product and related assets for $ 3.2 million. The Company closed the transaction on January 30, less a holdback reserve of $ 350,000 for net 2.9pr of approximately $o ceeds million. On September 5, 2018, third-party Yeda Research and Development Company Ltd. (“Yeda”), filed a complaint (the “Complaint”) against the Company and Invivo in the United States District Court for the Southern District of New York, captioned Yeda Research and Development Company Ltd. v. iCAD, Inc. and Invivo Corporation, Case No. 1:18-cv-08083-GBD, The Company may be a party to various legal proceedings and claims arising out of the ordinary course of its business. Although the final results of all such matters and claims cannot be predicted with certainty, the Company currently believes that there are no current proceedings or claims pending against it the ultimate resolution of which would have a material adverse effect on its financial condition or results of operations, other than as set forth above. However, should the Company fail to prevail in any legal matter or should several legal matters be resolved against the Company in the same reporting period, such matters could have a material adverse effect on the Company’s operating results and cash flows for that particular period. The Company may be a party to certain actions that have been filed against the Company which are being vigorously defended. The Company has determined that potential losses in these matters are neither probable or reasonably possible at this time. In all cases, at each reporting period, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under ASC 450, “Contingencies.” Legal costs are expensed as incurred. |
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Fair Value Measurements | Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset
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. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, and notes payable and convertible debentures. Due to their short-term nature and market rates of interest, the carrying amounts of the financial instruments (except the Convertible Debentures, which were measured at fair value in accordance with the fair value option election) approximated fair value as of February 21, 2020 and December 31, 2019. The Company’s assets and liabilities that are measured at fair value on a recurring basis include the Company’s money market accounts and Convertible Debentures. The money market accounts are included in cash and cash equivalents in the accompanying consolidated balance sheet and are considered a Level 1 measurement as they are valued at quoted market prices in active markets. The Convertible Debentures were recorded as a separate component of the Company’s consolidated balance sheet and are considered a Level 3 measurement due to the utilization of significant unobservable inputs in their valuation. See Note 4(b) for a discussion of these fair value measurements. The following table sets forth the Company’s assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands).
The following sets forth a reconciliation of the changes in the fair value of the Convertible Debentures that were converted to equity during the nine months ended September 30, 2020 (in thousands):
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Income Taxes | The Company recorded an income tax provision of $3,000 and $34,000 for the three and nine months ended September 30, 2020, respectively, and $6,000 and $33,000 for the three and nine months ended September 30, 2019, respectively. The Company had no material unrecognized tax benefits and a deferred tax liability of approximately $4,000 related to tax amortizable goodwill. No other adjustments were required under ASC 740, “Income Taxes.” The Company does not expect that its unrecognized tax benefits will materially increase within the next 12 months. The Company did not recognize any interest or penalties related to uncertain tax positions at September 30, 2020. The Company files United States federal income tax returns and income tax returns in various states and local jurisdictions. The Company’s three preceding tax years remain subject to examination by federal and state tax authorities. In addition, because the Company has net operating loss carry-forwards, the Internal Revenue Service and state jurisdictions are permitted to audit earlier years and propose adjustments up to the amount of net operating loss generated in those years. The Company is not currently under examination by any federal or state jurisdiction for any tax years. |
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Intangibles - Goodwill and Other | The Company tests goodwill for impairment on an annual basis and between annual tests if events and circumstances indicate it is more likely than not that the fair value of the reporting unit is less than its carrying value. Factors the Company considers important, which could trigger an impairment of such asset, include the following:
The Company considered the goodwill impairment factors due to the uncertainty around the continuing impact of the COVID-19 pandemic on the Company’s operations and on the global economy as a whole. Under this consideration the Company performed scenario testing as of March 31, 2020 updating the projections to the most recent impairment analysis performed as of October 1, 2019. The Company compared the scenario test again against current forecasts as of September 30, 2020 and concluded that it did not have a triggering event or impairment indicators in the quarter ended September 30, 2020.The Company would record an impairment charge when such assessment indicates that the fair value of a reporting unit is less than the carrying value. In evaluating potential impairments outside of the annual measurement date, judgment is required in determining whether an event has occurred that may impair the value of goodwill or intangible assets. The Company utilizes either discounted cash flow models or other valuation models, such as comparative transactions and market multiples, to determine the fair value of reporting units. The Company makes assumptions about future cash flows, future operating plans, discount rates, comparable companies, market multiples, purchase price premiums and other factors in those models. Different assumptions and judgment determinations could yield different conclusions that would result in an impairment charge to income in the period that such change or determination was made. The Company determines the fair values for each reporting unit using a weighting of the income approach and the market approach. For purposes of the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk adjusted rate. The Company uses internal forecasts to estimate future cash flows and includes estimates of long-term future growth rates based on its most recent views of the long-term forecast for each segment. Accordingly, actual results can differ from those assumed in the Company’s forecasts. Discount rates are derived from a capital asset pricing model and by analyzing published rates for industries relevant to the Company’s reporting units to estimate the cost of equity financing. The Company uses discount rates that are commensurate with the risks and uncertainty inherent in the respective businesses of its reporting units and in the Company’s internally developed forecasts. In the market approach, the Company uses a valuation technique in which values are derived based on market prices of publicly traded companies with similar operating characteristics and in similar industries. A market approach allows for comparison to actual market transactions and multiples. It can be somewhat limited in its application because the population of potential comparable publicly-traded companies can be limited due to differing characteristics of the comparative business and the Company, as well as the fact that market data may not be available for divisions within larger conglomerates or non-public subsidiaries that could otherwise qualify as comparable, and the specific circumstances surrounding a market transaction (e.g., synergies between the parties, terms and conditions of the transaction, etc.) may be different or irrelevant with respect to the business. The Company corroborates the total fair values of the reporting units using a market capitalization approach; however, this approach cannot be used to determine the fair value of each reporting unit. The blend of the income approach and market approach is more closely aligned to the business profile of the Company, including markets served and products available. In addition, required rates of return, along with uncertainties inherent in the forecast of future cash flows, are reflected in the selection of the discount rate. In addition, under the blended approach, reasonably likely scenarios and associated sensitivities can be developed for alternative future states that may not be reflected in an observable market price. The Company will assess each valuation methodology based upon the relevance and availability of the data at the time the valuation is performed and weights the methodologies appropriately. The Company has two operating segments, Detection and Therapy, as further discussed in Note 12 below. A rollforward of goodwill activity by reportable segment is as follows (in thousands):
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Long-lived assets | The Company assesses long-lived assets for impairment if events and circumstances indicate it is more likely than not that the fair value of the asset group is less than its carrying value. There is no set interval or frequency for recoverability evaluation. Rather, the determination of when, if at all, an asset (or asset group) is evaluated for recoverability is based on “events and circumstances.” The following factors are examples of events or changes in circumstances that indicate the carrying amount of an asset (or asset group) may not be recoverable and thus is to be evaluated for recoverability.
The Company determined there were no such triggering events in the quarter ended September 30, 2020. If the carrying amount of an asset or asset group (in use or under development) is evaluated and found not to be fully recoverable (e.g., the carrying amount exceeds the estimated gross, undiscounted cash flows from use and disposition), then an impairment loss must be recognized. The impairment loss is measured as the excess of the carrying amount over the fair value of the asset (or asset group). The Company determined the “Asset Group” of the Company to be the assets of the Therapy segment and the Detection segment, which the Company considers to be the lowest level for which the identifiable cash flows were largely independent of the cash flows of other assets and liabilities. A considerable amount of judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of the asset group and the reporting unit. While the Company believes that its judgments and assumptions are reasonable, different assumptions could change the estimated fair values and, therefore additional impairment charges could be required. Significant negative industry or economic trends, disruptions to the Company’s business, loss of significant customers, inability to effectively integrate acquired businesses, unexpected significant changes or planned changes in use of the assets may adversely impact the assumptions used in the fair value estimates and ultimately result in future impairment charges. |
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Segment Reporting | Operating segments are defined as components of an enterprise that engage in business activities for which discrete financial information is available and regularly reviewed by the chief operating decision maker (“CODM”) in deciding how to allocate resources and assess performance. |
Basis of Presentation and Significant Accounting Policies (Tables) |
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Revenues Disaggregated by Major Good or Service Line, Timing of Revenue Recognition, and Sales Channel, Reconciled to Our Reportable Segments | The following tables presents the Company’s revenues disaggregated by major good or service line, timing of revenue recognition, and sales channel, reconciled to its reportable segments (in thousands).
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Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers | The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in thousands).
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Summary of Changes in Deferred Revenue | Changes in deferred revenue from contracts with customers were as follows (in thousands):
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Summary of Changes in Deferred Revenue | The balance of deferred revenue at September 30, 2020 and December 31, 2019 is as follows (in thousands):
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Net Loss per Common Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Calculation of Net Loss Per Share | A summary of the Company’s calculation of net loss per share is as follows (in thousands except per share amounts):
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Schedule of Anti-dilutive Shares Excluded from Computation of Diluted Net Loss Per Share | The shares of the Company’s common stock issuable upo n the exercise of convertible securities, stock options and vesting of restricted stock that were excluded from the calculation of diluted net loss per share because their effect would have been antidilutive are as follows:
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Inventory (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Current Inventory |
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Financing Arrangements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Key Inputs to Simulation Model Utilized to Estimate Fair Value of Convertible Debentures | The Company notes that the key inputs to the valuation models that were utilized to estimate the fair value of the Convertible Debentures included:
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Schedule of Fair Value and Principal Value of Convertible Debentures | The fair value and principal value of the Convertible Debentures as of December 31, 2019 and the Conversion Date was as follows (in thousands):
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Summary of Future Principal and Interest Payments Related to Loan Agreement and Convertible Debentures | Future principal, interest payments, and final payment related to the Loan Agreement are as follows (in thousands):
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Interest Expense in Consolidated Income Statement | The following amounts are included in interest expense in the Company’ s consolidated statement of operations for the three and nine months ended September 30, 2020 and 2019 (in thousands):
|
Lease Commitments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Components of Lease Expense | The components of lease expense for the period are as follows (in thousands):
Other information related to le a ses was as follows (in thousands)
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Summary of Detained Information of Lease Liabilities |
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Stock-Based Compensation (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Options Granted under Company's Stock Incentive Plans, Valuation Assumptions and Fair Values |
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Stock-Based Compensation Expense Including Options and Restricted Stock by Category | The Company’s stock-based compensation expense, including options and restricted stock by category is as follows (in thousands):
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Unrecognized Compensation Cost Related to Unexercisable Options and Unvested Restricted Stock and Weighted Average Remaining Period | As of September 30, 2020, unrecognized compensation cost (in thousands) related to unvested options and unvested restricted stock and the weighted average term of such equity instruments is as follows:
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Aggregate Intrinsic Value | The Company’s aggregate intrinsic value for stock options and restricted stock outstanding is as follows (in thousands):
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Fair Value Measurements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Assets and Liabilities which are Measured at Fair Value on a Recurring Basis | The following table sets forth the Company’s assets and liabilities which are measured at fair value on a recurring basis by level within the fair value hierarchy (in thousands).
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Schedule of Reconciliation of Changes In Fair Value of Convertible Debentures | The following sets forth a reconciliation of the changes in the fair value of the Convertible Debentures that were converted to equity during the nine months ended September 30, 2020 (in thousands):
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Goodwill (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Roll Forward of Goodwill Activity by Reportable Segment | A rollforward of goodwill activity by reportable segment is as follows (in thousands):
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Segment Reporting (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Segment Revenues, Gross Profit, Segment Operating Income or Loss and Reconciliation of Segment Operating Income or Loss to GAAP Loss | Segment revenues, gross profit, segment operating income or loss, and a reconciliation of segment operating income or loss to US GAAP loss before income tax is as follows (in thousands):
|
Basis of Presentation and Significant Accounting Policies - Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Contract with Customer, Asset and Liability [Abstract] | ||
Receivables, which are included in "Trade accounts receivable" | $ 8,376 | |
Contract assets, which are included in "Prepaid and other current assets" | 7 | $ 14 |
Contract liabilities, which are included in "Deferred revenue" | $ 5,863 | $ 5,604 |
Basis of Presentation and Significant Accounting Policies - Summary of Deferred Revenue (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Deferred Revenue Arrangement [Line Items] | ||
Contract liabilities | $ 5,863 | $ 5,604 |
Short-term Contract with Customer [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Contract liabilities | 5,644 | 5,248 |
Long-term Contract with Customer [Member] | ||
Deferred Revenue Arrangement [Line Items] | ||
Contract liabilities | $ 219 | $ 356 |
Basis of Presentation and Significant Accounting Policies - Summary of Changes in Deferred Revenue from Contracts with Customers (Detail) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Deferred Revenue Disclosure [Abstract] | |
Balance at beginning of period | $ 5,604 |
Deferral of revenue | 8,092 |
Recognition of deferred revenue | (7,833) |
Balance at end of period | $ 5,863 |
Net Loss per Common Share - Calculation of Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
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Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Net loss | $ (1,797) | $ (2,956) | $ (16,007) | $ (10,203) |
Shares used in the calculation of basic and diluted net loss per share | 23,173 | 19,284 | 21,827 | 18,049 |
Effect of dilutive securities: | ||||
Diluted shares used in the calculation of net loss per share | 23,173 | 19,284 | 21,827 | 18,049 |
Net loss per share - basic and diluted | $ (0.08) | $ (0.15) | $ (0.73) | $ (0.57) |
Net Loss per Common Share - Schedule of Anti-dilutive Shares Excluded from Computation of Diluted Net Loss Per Share (Detail) - shares |
9 Months Ended | |
---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock options, warrants and restricted stock | 2,000,870 | 3,443,701 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock options, warrants and restricted stock | 1,971,704 | 1,509,292 |
Restricted Stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock options, warrants and restricted stock | 29,166 | 191,909 |
Convertible Debentures [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Common stock options, warrants and restricted stock | 1,742,500 |
Inventory - Additional Information (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Inventory reserve | $ 229 | $ 469 |
Inventory - Schedule of Current Inventory (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,422 | $ 1,572 |
Work in process | 324 | 39 |
Finished Goods | 1,629 | 1,469 |
Inventory Gross | 3,375 | 3,080 |
Inventory Reserve | (229) | (469) |
Inventory Net | $ 3,146 | $ 2,611 |
Financing Arrangements - Schedule of Fair Value and Principal Value of Convertible Debentures (Detail) - USD ($) $ in Thousands |
Feb. 21, 2020 |
Dec. 31, 2019 |
Feb. 21, 2019 |
---|---|---|---|
Debt Disclosure [Abstract] | |||
Fair value, in accordance with fair value option | $ 21,164 | $ 13,642 | $ 21,200 |
Principal value outstanding | $ 6,970 | $ 6,970 |
Finance Arrangements - Summary of Future Principal and Interest Payments Related to Loan Agreement and Convertible Debentures (Detail) - Term Loan A [Member] $ in Thousands |
Sep. 30, 2020
USD ($)
|
---|---|
Shares Issued And Outstanding [Line Items] | |
2020 | $ 94 |
2021 | 1,238 |
2022 | 2,875 |
2023 | 2,735 |
2024 | 1,003 |
Total | $ 7,945 |
Finance Arrangements - Interest Expense in Consolidated Income Statement (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Interest Expense [Line Items] | ||||
Cash interest expense | $ 94 | $ 65 | $ 232 | $ 222 |
Interest on convertible debentures | 0 | 87 | 49 | 261 |
Accrual of notes payable final payment | 8 | 34 | 47 | 98 |
Amortization of debt costs | 13 | 7 | 32 | 21 |
Interest expense capital lease | 0 | 0 | 0 | 2 |
Total interest expense | $ 115 | $ 193 | $ 360 | $ 604 |
Lease Commitments - Additional Information (Detail) |
9 Months Ended |
---|---|
Sep. 30, 2020 | |
Maximum [Member] | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 3 years |
Minimum [Member] | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 year |
Lease Commitments - Schedule of Components of Lease Expense (Detail) - Accounting Standards Update 2016-02 [Member] - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended |
---|---|---|
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease cost - Right of Use | $ 217 | $ 804 |
Finance lease costs | ||
Amortization of leased assets | 4 | 15 |
Interest on lease liabilities Interest expense | 0 | 2 |
Total | 221 | $ 821 |
Cash paid from operating cash flows for operating leases | 229 | |
Cash paid from operating cash flows for finance leases | 0 | |
Cash paid from financing cash flows for finance leases | $ 4 | |
Weighted-average remaining lease term of operating leases (in years) | 2 years 5 months 12 days | |
Weighted-average discount rate for operating leases | 5.60% | |
Weighted-average discount rate for capital leases | 0.00% |
Lease Commitments - Summary of Detained Information of Lease Liabilities (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Leases [Abstract] | ||
2020 | $ 228 | |
2021 | 920 | |
2022 | 899 | |
2023 | 211 | |
2024 | 5 | |
Total | 2,263 | |
Less: imputed interest | (154) | |
Total lease liabilities | 2,109 | |
Less: current portion of lease liabilities | (822) | |
Total lease liabilities | 1,287 | |
2020 | 228 | |
2021 | 920 | |
2022 | 899 | |
2023 | 211 | |
2024 | 5 | |
Total lease payments | 2,263 | |
Less: imputed interest | (154) | |
Total lease liabilities | 2,109 | |
Less: current portion of lease liabilities | (822) | $ (758) |
Long-term lease liabilities | $ 1,287 |
Stockholders' Equity - Stock-Based Compensation Expense Including Options and Restricted Stock by Category (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | $ 465 | $ 340 | $ 2,542 | $ 856 |
Cost of Revenue [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 3 | 1 | 28 | 2 |
Engineering and Product Development [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 64 | 62 | 406 | 182 |
Marketing and Sales [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | 61 | 62 | 608 | 178 |
General and Administrative Expense [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||||
Allocated share-based compensation expense | $ 337 | $ 215 | $ 1,500 | $ 494 |
Stock-Based Compensation - Additional Information (Detail) - USD ($) |
1 Months Ended | 3 Months Ended | 9 Months Ended | |
---|---|---|---|---|
Dec. 31, 2019 |
Sep. 30, 2020 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Net proceeds from Issue of common stock | $ 12,174,000 | $ 9,353,000 | ||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option Granted | 0 | 14,000 | ||
Number of shares vested | 38,160 | |||
Intrinsic value of restricted shares that vested | $ 600,000 | |||
Number of restricted stock vested cancelled | 3,666 | |||
Stock Options [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock, Issued | 49,712 | 94,678 | ||
Net proceeds from Issue of common stock | $ 185,000,000 | $ 417,000,000 | ||
2019 Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of shares issued, Employee Stock Purchase Plans | 950,000 | 16,392 | 34,857 | |
Percentage of voting power | 5.00% | |||
Description of employee stock purchase plan | Employees who participate in the ESPP may purchase shares by authorizing payroll deductions of up to 15% of their base compensation during an accumulation period. Unless the participating employee withdraws from participation, accumulated payroll deductions are used to purchase shares of common stock on the last business day of the accumulation period (the “Purchase Date”) at a price equal to 85% of the lower of the fair market value on (i) the Purchase Date or (ii) the first day of such accumulation period. Under applicable tax rules, no employee may purchase more than $25,000 worth of common stock, valued at the start of the purchase period, under the ESPP in any calendar year. | |||
Stock-based compensation expense | $ 19,000 | $ 84,000 | ||
Accrued salary and related expenses | $ 58,000 | $ 58,000 | ||
Black Scholes Model [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of option Granted | 17,029 | 540,886 |
Stock-Based Compensation - Options Granted under Company's Stock Incentive Plans, Valuation Assumptions and Fair Values (Detail) - Stock Options [Member] - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Average risk-free interest rate | 0.15% | 1.60% | 0.79% | 1.99% |
Expected dividend yield | 0.00% | 0.00% | 0.00% | 0.00% |
Expected life | 3 years 6 months | 3 years 6 months | 3 years 6 months | 3 years 6 months |
Weighted average exercise price | $ 8.84 | $ 6.78 | $ 10.08 | $ 5.69 |
Weighted average fair value | $ 4.11 | $ 2.63 | $ 4.34 | $ 2.26 |
Minimum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 66.00% | 51.04% | 50.20% | 51.04% |
Maximum [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected volatility | 66.00% | 51.37% | 65.70% | 54.23% |
Stock-Based Compensation - Unrecognized Compensation Cost Related to Unexercisable Options and Unvested Restricted Stock and Weighted Average Remaining Period (Detail) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2020
USD ($)
| |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized [Abstract] | |
Remaining expense | $ 1,060 |
Weighted average term | 1 year |
Stock-Based Compensation - Aggregate Intrinsic Value (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Sep. 30, 2019 |
---|---|---|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock options | $ 6,679 | $ 4,154 |
Restricted stock | $ 257 | $ 1,315 |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
1 Months Ended | ||||
---|---|---|---|---|---|
Feb. 28, 2010 |
Jul. 31, 2007 |
Sep. 30, 2020 |
Jan. 30, 2017 |
Dec. 31, 2016 |
|
Schedule Of Leases [Line Items] | |||||
Purchase obligations to suppliers for future product deliverables | $ 4,200,000 | ||||
VersaVue Software and DynaCAD Product and Related Assets [Member] | Asset Purchase Agreement [Member] | |||||
Schedule Of Leases [Line Items] | |||||
Sale and transfer of intangible assets | $ 3,200,000 | ||||
Holdback reserve related to sale and transfer of intangible assets | $ 350,000 | ||||
Proceeds from sale and transfer of intangible assets | $ 2,900,000 | ||||
CADx Medical Systems Inc [Member] | |||||
Schedule Of Leases [Line Items] | |||||
Tax re-assessment received | $ 6,800,000 | ||||
Reduced tax re-assessment received | $ 703,000 |
Fair Value Measurements - Assets and Liabilities which are Measured at Fair Value on a Recurring Basis (Detail) - USD ($) $ in Thousands |
Sep. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets | ||
Total Assets | $ 22,633 | $ 15,313 |
Liabilities | ||
Total Liabilities | 13,642 | |
Convertible Debentures [Member] | ||
Liabilities | ||
Total Liabilities | 13,642 | |
Money Market Accounts [Member] | ||
Assets | ||
Total Assets | 22,633 | 15,313 |
Level 1 [Member] | ||
Assets | ||
Total Assets | 22,633 | 15,313 |
Level 1 [Member] | Money Market Accounts [Member] | ||
Assets | ||
Total Assets | $ 22,633 | 15,313 |
Level 3 [Member] | ||
Liabilities | ||
Total Liabilities | 13,642 | |
Level 3 [Member] | Convertible Debentures [Member] | ||
Liabilities | ||
Total Liabilities | $ 13,642 |
Fair Value Measurements - Schedule of Reconciliation of Changes In Fair Value of Convertible Debentures (Detail) - USD ($) $ in Thousands |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2020 |
Feb. 21, 2020 |
Dec. 31, 2019 |
Feb. 21, 2019 |
|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning Balance | $ 13,642 | |||
Conversion | $ (21,164) | $ (13,642) | $ (21,200) | |
Convertible Debentures [Member] | ||||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||||
Beginning Balance | 13,642 | |||
Fair value adjustments | 7,522 | |||
Conversion | $ (21,164) |
Income Taxes - Additional Information (Detail) - USD ($) |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Schedule Of Income Tax Expense [Line Items] | ||||
Unrecognized tax benefits | $ 0 | $ 0 | ||
Income tax provision | 3,000 | $ 6,000 | 34,000 | $ 33,000 |
Deferred tax liability related to amortized goodwill | $ 4,000 | $ 4,000 |
Goodwill - Roll Forward of Goodwill Activity by Reportable Segment (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2018 |
Sep. 30, 2020 |
Dec. 31, 2019 |
|
Accumulated Goodwill | $ 47,937 | ||
Accumulated impairment | (26,828) | ||
Acquisition measurement period adjustments | 116 | ||
Sale of MRI assets | (394) | ||
Impairment | (19,716) | ||
Goodwill, Ending Balance | $ 8,362 | $ 8,362 | |
DermEbx And Radion [Member] | |||
Acquisition cost | 6,154 | ||
VuComp M-Vu Breast Density Product [Member] | |||
Acquisition cost | 1,093 | ||
Consolidated Reporting Unit [Member] | |||
Accumulated Goodwill | 47,937 | ||
Accumulated impairment | (26,828) | ||
Fair value allocation | (21,109) | ||
Detection [Member] | |||
Fair value allocation | 7,663 | ||
Sale of MRI assets | (394) | ||
Goodwill, Ending Balance | $ 8,362 | $ 8,362 | |
Detection [Member] | VuComp M-Vu Breast Density Product [Member] | |||
Acquisition cost | 1,093 | ||
Therapy [Member] | |||
Fair value allocation | 13,446 | ||
Acquisition measurement period adjustments | 116 | ||
Impairment | (19,716) | ||
Therapy [Member] | DermEbx And Radion [Member] | |||
Acquisition cost | $ 6,154 |
Segment Reporting - Summary of Segment Revenues, Gross Profit, Segment Operating Income or Loss and Reconciliation of Segment Operating Income or Loss to GAAP Loss (Detail) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2020 |
Sep. 30, 2019 |
Sep. 30, 2020 |
Sep. 30, 2019 |
|
Segment revenues: | ||||
Total Revenue | $ 7,129 | $ 7,857 | $ 19,247 | $ 21,959 |
Segment gross profit: | ||||
Segment gross profit | 5,025 | 6,054 | 13,892 | 17,062 |
Segment operating income (loss): | ||||
Segment operating income (loss) | 155 | (79) | 1,428 | 853 |
General, administrative, depreciation and amortization expense | (1,844) | (1,881) | (6,465) | (5,305) |
Interest expense | (115) | (193) | (360) | (604) |
Other income | 10 | 103 | 85 | 226 |
Fair value of convertible debentures | (900) | (7,464) | (5,340) | |
Loss on extinguishment of debt | (341) | |||
Loss before income tax expense | (1,794) | (2,950) | (15,973) | (10,170) |
Product [Member] | ||||
Segment revenues: | ||||
Total Revenue | 4,538 | 5,156 | 11,220 | 13,331 |
Service [Member] | ||||
Segment revenues: | ||||
Total Revenue | 2,591 | 2,701 | 8,027 | 8,628 |
Detection [Member] | ||||
Segment gross profit: | ||||
Segment gross profit | 4,227 | 5,051 | 11,227 | 12,874 |
Segment operating income (loss): | ||||
Segment operating income (loss) | 866 | 943 | 721 | 1,918 |
Detection [Member] | Product [Member] | ||||
Segment revenues: | ||||
Total Revenue | 5,291 | 6,087 | 13,885 | 15,464 |
Therapy [Member] | ||||
Segment gross profit: | ||||
Segment gross profit | 798 | 1,003 | 2,665 | 4,188 |
Segment operating income (loss): | ||||
Segment operating income (loss) | (711) | (1,022) | (2,149) | (1,065) |
Therapy [Member] | Service [Member] | ||||
Segment revenues: | ||||
Total Revenue | $ 1,838 | $ 1,770 | $ 5,362 | $ 6,495 |
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