ANNUAL 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 Class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
Large Accelerated filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Item 1 . |
Business . |
• | anti-kickback, false claims, and physician self-referral statutes; |
• | U.S. state laws and regulations regarding fee splitting and other relationships between healthcare providers and non-professional entities, such as companies that provide management and reimbursement support services; |
• | anti-bribery laws, such as the U.S. Foreign Corrupt Practices Act, the UK Anti-Bribery Act, the Canadian Corruption of Foreign Public Officials Act, and guidance promulgated by certain multi-national groups, such as the United Nations Convention Against Corruption and the Organization for Economic Cooperation and Development Convention on Combatting Bribery of Foreign Public Officials in International Business Transactions; |
• | laws regulating the privacy and security of health data, protected health information and personally identifiable information. These include the U.S. Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), the Health Information Technology for Economic and Clinical Health Act, the General Data Protection Regulation (“GDPR”) in the EU, and the Personal Information Protection and Electronic Documents Act in Canada; and |
• | healthcare reform laws in the United States, such as the Affordable Care Act (“ACA”) and the 21st Century Cures Act, which include new regulatory mandates and other measures designed to reduce the rate of medical inflation. These include, among other things, stringent new reporting requirements of financial relationships between device manufacturers and physicians and teaching hospitals. |
• | the referral of an individual for a service or product for which payment may be made by Medicare, Medicaid or other government-sponsored healthcare program; or |
• | purchasing, ordering, arranging for, or recommending the ordering of, any service or product for which payment may be made by a government-sponsored healthcare program. |
• | whether the product or service is a covered benefit under its health plan; |
• | whether the product or service is appropriate and medically necessary for the specific indication; |
• | cost effectiveness of the product or service; |
• | whether the product is being used in a manner consistent with its FDA-approved or cleared label (i.e., “on-label”); and |
• | a determination that the product or service is neither experimental nor investigational (e.g., that its use is supported by relevant evidence in the peer reviewed literature, its use is supported by medical professional society treatment guidelines). |
Item 1A. |
Risk Factors. |
• | We have incurred significant losses from inception through 2020 and there can be no assurance that we will be able to achieve and sustain future profitability. |
• | Our quarterly and annual operating and financial results and our gross margins are likely to fluctuate significantly in future periods. |
• | We expect the novel coronavirus (COVID-19) pandemic to have a significant effect on our results of operations. In addition, it has resulted in significant financial market volatility, and its impact on the global economy appears to be significant. A continuation or worsening of the pandemic will have a material adverse impact on our business, results of operations and financial condition and on the market price of our common stock. |
• | The markets for our products and treatments and newly introduced enhancements to our existing products and treatments may not develop as expected, we continue to face barriers to broad market acceptance. |
• | An unfavorable resolution of the Yeda litigation could have a material adverse effect on our business, financial condition, results of operations and cash flows. |
• | Sales and market acceptance of our products is dependent upon the coverage and reimbursement decisions made by third-party payers, including carve-out radiology benefits managers. The failure of third-party payers to provide appropriate levels of coverage and reimbursement, and/or meeting prior authorization and other requirements for approval to use our products and treatments facilitated by our products could harm our business and prospects. |
• | A limited number of customers account for a significant portion of our total revenue. The loss of a principal customer could seriously hurt our business. |
• | The markets for many of our products are subject to changing technology. |
• | We distribute our products in highly competitive markets and our sales may suffer as a result. |
• | We rely on intellectual property and proprietary rights to maintain our competitive position and may not be able to protect these rights. |
• | Our future prospects depend on our ability to retain current key employees and attract additional qualified personnel. |
• | The market price of our common stock has been, and may continue to be volatile, which could reduce the market price of our common stock. |
• | Future issuances of shares of our common stock may cause significant dilution of equity interests of existing holders of common stock and decrease the market price of shares of our common stock. |
• | market acceptance of our products; |
• | uncertainty of the development of a market for such product or treatment; |
• | trends relating to, or the introduction or existence of, competing products, technologies or alternative treatments or therapies that may be more effective, safer or easier to use than our products, technologies, treatments or therapies; |
• | the perceptions of our products or treatments as compared to other products and treatments; |
• | recommendation and support for the use of our products or treatments by influential customers, such as hospitals, radiological practices, breast surgeons and radiation oncologists and treatment centers and U.S. and international medical professional societies; |
• | the availability and extent of data demonstrating the clinical efficacy of our products or treatments; |
• | competition, including the presence of competing products sold by companies with longer operating histories, more recognizable names and more established distribution networks; and |
• | other technological developments. |
• | harm to our reputation; |
• | lost sales; |
• | delays in commercial releases; |
• | product liability claims; |
• | delays in or loss of market acceptance of our solutions; |
• | license terminations or renegotiations; |
• | unexpected expenses and diversion of resources to remedy errors; and |
• | privacy and security vulnerabilities. |
• | non-approval of an investigational device exemption (IDE), which is required by the FDA for the study in humans of a significant risk device that is not approved for the indication being studied; |
• | failure to reach an agreement with contract research organizations or clinical trial sites; |
• | failure of third-party contract research organizations to properly implement or monitor the clinical trial protocols; |
• | failure of IRBs to approve our clinical trial protocols or suspension or termination of our clinical trial by the IRB, DSMB, or the FDA; |
• | slower than expected rates of patient recruitment and enrollment, which may be further negatively impacted by the COVID-19 global pandemic; |
• | inability to retain patients in clinical trials, which may be further negatively impacted by the COVID-19 global pandemic; |
• | lack of effectiveness during clinical trials; |
• | unforeseen safety issues; |
• | inability or unwillingness of medical clinical investigators and institutional review boards to follow our clinical trial protocols; |
• | failure of clinical investigators or sites to maintain necessary licenses or permits or comply with good clinical practices, or GCP, or other regulatory requirements; and |
• | lack of sufficient funding to finance the clinical trials. |
• | requires us to dedicate a portion of our cash flow to payments on our debt obligations, which reduces the availability of our cash flow to fund working capital, capital expenditures and other corporate requirements; |
• | imposes restrictions on our ability to incur indebtedness, other than permitted indebtedness, and could impede us from obtaining additional financing in the future for working capital, capital expenditures, mergers, acquisitions and general corporate purposes; |
• | imposes restrictions on us with respect to the use of our available cash, including in connection with future acquisitions; |
• | requires us to agree by a certain date with the Bank regarding minimum revenue levels for the 2021 calendar year. Failure to agree will result in acceleration of the indebtedness under the Loan Agreement; and |
• | requires us to provide certain financial information on a monthly and annual basis. Failure to do so will result in acceleration of the indebtedness under the Loan Agreement. |
• | could impair our liquidity; |
• | could make it more difficult for us to satisfy our other obligations; |
• | make us more vulnerable in the event of a downturn in our business prospects and could limit our flexibility to plan for, or react to, changes in our licensing markets; |
• | could result in a prepayment or make-whole premium if we elected to prepay the indebtedness under the Loan Agreement prior to its maturity date; and |
• | could place us at a competitive disadvantage when compared to our competitors who have less debt. |
Item 1B. |
Unresolved Staff Comments. |
Item 2. |
Properties. |
Item 3. |
Legal Proceedings. |
Item 4. |
Mine Safety Disclosures. |
Item 5. |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
Item 6 . |
Selected Financial Data . |
Item 7 . |
Management’s Discussion and Analysis of Financial Condition and Results of Operations . |
• | Revenue recognition; |
• | Valuation of long-lived and intangible assets; |
• | Goodwill; |
• | Stock based compensation; and |
• | Income taxes; |
1) | Identify the contract(s) with a customer |
2) | Identify the performance obligations in the contract |
3) | Determine the transaction price |
4) | Allocate the transaction price to the performance obligations in the contract |
5) | Recognize revenue when (or as) the Company satisfies a performance obligation |
• | 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. |
• | A significant decrease in the market price of a long-lived asset (asset group); |
• | A significant adverse change in the extent or manner in which a long-lived asset (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 (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 (asset group); |
• | A current period operating 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 (asset group). |
Twelve months ended December 31, |
||||||||||||||||
2020 |
2019 |
$ Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ | 16,291 | $ | 16,788 | $ | (497 | ) | (3.0 | )% | |||||||
Service revenue |
5,706 | 5,531 | 175 | 3.2 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
21,997 | 22,319 | (322 | ) | (1.4 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
2,612 | 2,979 | (367 | ) | (12.3 | )% | ||||||||||
Service revenue |
5,089 | 6,042 | (953 | ) | (15.8 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
7,701 | 9,021 | (1,320 | ) | (14.6 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 29,698 | $ | 31,340 | $ | (1,642 | ) | (5.2 | )% | |||||||
|
|
|
|
|
|
|
|
Twelve months ended December 31, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Products |
$ | 5,000 | $ | 3,278 | $ | 1,722 | 52.5 | % | ||||||||
Service and supplies |
2,965 | 3,438 | (473 | ) | (13.8 | )% | ||||||||||
Amortization and depreciation |
379 | 397 | (18 | ) | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 8,344 | $ | 7,113 | $ | 1,231 | 17.3 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 21,354 | $ | 24,227 | $ | (2,873 | ) | (11.9 | )% | |||||||
profit % |
71.9 | % | 77.3 | % | ||||||||||||
For the year ended December 31, |
||||||||||||||||
2020 |
2019 |
Change |
% Change |
|||||||||||||
Detection gross profit |
$ | 17,856 | $ | 18,627 | $ | (771 | ) | (4.1 | )% | |||||||
Therapy gross profit |
3,498 | 5,600 | (2,102 | ) | (37.5 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 21,354 | $ | 24,227 | $ | (2,873 | ) | (11.9 | )% | |||||||
|
|
|
|
|
|
|
|
Year ended December 31, |
||||||||||||||||
2020 | 2019 | Change | Change % | |||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and product development |
$ | 8,114 | $ | 9,271 | $ | (1,157 | ) | (12.5 | )% | |||||||
Marketing and sales |
13,312 | 13,634 | (322 | ) | (2.4 | )% | ||||||||||
General and administrative |
9,117 | 7,443 | 1,674 | 22.5 | % | |||||||||||
Amortization and depreciation |
199 | 276 | (77 | ) | (27.9 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 30,742 | $ | 30,624 | $ | 118 | 0.4 | % | ||||||||
|
|
|
|
|
|
|
|
Year ended December 31, |
||||||||||||||||
2020 | 2019 | Change | Change% | |||||||||||||
Interest expense |
$ | (476 | ) | $ | (784 | ) | $ | 308 | (39.3 | )% | ||||||
Interest income |
97 | 344 | (247 | ) | (71.8 | )% | ||||||||||
Loss on extinguishment of debt |
(341 | ) | — | (341 | ) | 0.0 | % | |||||||||
Loss on fair value of debentures |
(7,464 | ) | (6,671 | ) | (793 | ) | 11.9 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (8,184 | ) | $ | (7,111 | ) | $ | (1,073 | ) | 15.1 | % | ||||||
|
|
|
|
|
|
|
|
|||||||||
Tax expense |
$ | 38 | $ | 43 | $ | (5 | ) | (11.6 | )% |
Twelve months ended December 31, |
||||||||||||||||
2019 |
2018 |
Change |
% Change |
|||||||||||||
Detection revenue |
||||||||||||||||
Product revenue |
$ | 16,788 | $ | 10,783 | $ | 6,005 | 55.7 | % | ||||||||
Service revenue |
5,531 | 6,081 | (550 | ) | (9.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
22,319 | 16,864 | 5,455 | 32.3 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Therapy revenue |
||||||||||||||||
Product revenue |
2,979 | 2,328 | 651 | 28.0 | % | |||||||||||
Service revenue |
6,042 | 6,429 | (387 | ) | (6.0 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Subtotal |
9,021 | 8,757 | 264 | 3.0 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenue |
$ | 31,340 | $ | 25,621 | $ | 5,719 | 22.3 | % | ||||||||
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|
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|
|
|
Twelve months ended December 31, |
||||||||||||||||
2019 |
2018 |
Change |
% Change |
|||||||||||||
Products |
$ | 3,278 | $ | 2,161 | $ | 1,117 | 51.7 | % | ||||||||
Service and supplies |
3,438 | 3,627 | (189 | ) | (5.2 | )% | ||||||||||
Amortization and depreciation |
397 | 403 | (6 | ) | 100.0 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total cost of revenue |
$ | 7,113 | $ | 6,191 | $ | 922 | 14.9 | % | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Gross profit |
$ | 24,227 | $ | 19,430 | $ | 4,797 | 24.7 | % | ||||||||
profit % |
77.3 | % | 75.8 | % |
For the year ended December 31, |
||||||||||||||||
2019 |
2018 |
Change |
% Change |
|||||||||||||
Operating expenses: |
||||||||||||||||
Engineering and product development |
$ | 9,271 | $ | 9,445 | $ | (174 | ) | (1.8 | )% | |||||||
Marketing and sales |
13,634 | 8,693 | 4,941 | 56.8 | % | |||||||||||
General and administrative |
7,443 | 9,117 | (1,674 | ) | (18.4 | )% | ||||||||||
Amortization and depreciation |
276 | 305 | (29 | ) | (9.5 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
$ | 30,624 | $ | 27,560 | $ | 3,064 | 11.1 | % | ||||||||
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|
For the year ended December 31, |
||||||||||||||||
2019 |
2018 |
Change |
Change % |
|||||||||||||
Interest expense |
$ | (784 | ) | $ | (504 | ) | (280 | ) | 55.6 | % | ||||||
Interest income |
344 | 110 | 234 | 212.7 | % | |||||||||||
Financing costs |
— | (451 | ) | 451 | (100.0 | )% | ||||||||||
Loss on fair value of debentures |
(6,671 | ) | — | (6,671 | ) | — | ||||||||||
|
|
|
|
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|
|
|||||||||
$ | (7,111 | ) | $ | (845 | ) | $ | (6,266 | ) | 741.5 | % | ||||||
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|
|||||||||
Income tax (benefit) expense |
$ | 43 | $ | 42 | 1 | 2.4 | % |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Segment revenues: |
||||||||||||
Detection |
$ | 21,997 | $ | 22,319 | $ | 16,864 | ||||||
Therapy |
7,701 | 9,021 | 8,757 | |||||||||
|
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|||||||
Total Revenue |
$ | 29,698 | $ | 31,340 | $ | 25,621 | ||||||
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|||||||
Segment gross profit: |
||||||||||||
Detection |
$ | 17,856 | $ | 18,627 | $ | 14,709 | ||||||
Therapy |
3,498 | 5,600 | 4,721 | |||||||||
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Segment gross profit |
$ | 21,354 | $ | 24,227 | $ | 19,430 | ||||||
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Segment operating income (loss): |
||||||||||||
Detection |
$ | 2,719 | $ | 2,564 | $ | 3,412 | ||||||
Therapy |
(3,028 | ) | (1,476 | ) | (2,373 | ) | ||||||
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|
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Segment operating income (loss) |
$ | (309 | ) | $ | 1,088 | $ | 1,039 | |||||
|
|
|
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|
|||||||
General administrative |
$ | (9,079 | ) | $ | (7,486 | ) | $ | (9,169 | ) | |||
Interest expense |
(476 | ) | (784 | ) | (504 | ) | ||||||
Financing costs |
— | — | (451 | ) | ||||||||
Loss on extinguishment of debt |
(341 | ) | ||||||||||
Other income |
97 | 345 | 110 | |||||||||
Fair value of convertible debentures |
(7,464 | ) | (6,671 | ) | ||||||||
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|
|
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|||||||
Loss before income tax |
$ | (17,572 | ) | $ | (13,508 | ) | $ | (8,975 | ) | |||
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Item 7A. |
Quantitative and Qualitative Disclosures about Market Risk. |
Item 8. |
Financial Statements and Supplementary Data. |
Item 9. |
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. |
Item 9A. |
Controls and Procedures. |
Item 9B. |
Other Information. |
Item 10 . |
Directors, Executive Officers and Corporate Governance . |
Item 11 . |
Executive Compensation . |
Item 12 . |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters . |
Item 13 . |
Certain Relationships and Related Transactions, and Director Independence . |
Item 14 . |
Principal Accounting Fees and Services . |
Item 15 . |
Exhibits, Financial Statement Schedules. |
21.1 |
| |
23.1 |
Consent of BDO USA, LLP, Independent Registered Public Accounting Firm. | |
31.1 |
Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
31.2 |
Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |
32.1 |
Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |
32.2 |
Certification of Chief 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 December 31, 2020 and December 31, 2019, (ii) Consolidated Statements of Operations for the years ended December 31, 2020, 2019 and 2018, (iii) Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2020, 2019 and 2018, (iv) Consolidated Statements of Cash Flows for the years ended December 31, 2020, 2019 and 2018, and (v) Notes to Consolidated Financial Statements. | |
104 |
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
* | Denotes a management compensation plan or arrangement. |
** | The Registrant has omitted certain schedules and exhibits pursuant to Item 601(b)(2) of Regulation S-K and shall furnish supplementally to the SEC copies any of the omitted schedules and exhibits upon request by the SEC. |
Item 16. |
Form 10-K Summary. |
By: | /s/ Michael Klein | |
Michael Klein | ||
Chief Executive Officer, Executive Chairman |
Signature |
Title |
Date | ||
/s/ Michael Klein |
Executive Chairman, Director, Chief Executive Officer (Principal Executive Officer) |
March 15, 2021 | ||
Michael Klein | ||||
/s/ R. Scott Areglado |
Chief Financial Officer (Principal Financial and Accounting Officer) |
March 15, 2021 | ||
R. Scott Areglado | ||||
/s/ Nathaniel Dalton |
Director | March 15, 2021 | ||
Nathaniel Dalton | ||||
/s/ Rakesh Patel |
Director | March 15, 2021 | ||
Rakesh Patel, MD | ||||
/s/ Andy Sassine |
Director | March 15, 2021 | ||
Andy Sassine | ||||
/s/ Susan Wood |
Director | March 15, 2021 | ||
Susan Wood, Ph.D |
Page |
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F-2 |
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F-4 |
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F-5 |
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F-6 |
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F-7 |
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F-8–F-50 |
• | Evaluating management’s accounting policies and practices, including the reasonableness of management’s judgments and assumptions related to the identification of each distinct performance obligation and its pattern of delivery. |
• | Testing these agreements together with their underlying documents and company assessments to evaluate the appropriate identification of each distinct performance obligation and its respective pattern of revenue recognition. |
December 31, |
December 31, |
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Assets |
2020 |
2019 |
||||||
(in thousands except shares and per share data) | ||||||||
Current assets: |
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Cash and cash equivalents |
$ | $ | ||||||
Trade accounts receivable, net of allowance for doubtful |
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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: |
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Equipment |
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Leasehold improvements |
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Furniture and fixtures |
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Marketing assets |
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Less accumulated depreciation and amortization |
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Property and equipment, net |
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Other assets: |
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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 other assets |
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Total assets |
$ | $ | ||||||
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Liabilities and Stockholders’ Equity |
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Current liabilities: |
||||||||
Accounts payable |
$ | $ | ||||||
Accrued and other expenses |
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Notes payable, current |
— | |||||||
Lease payable, current |
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Deferred revenue, current |
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Total current liabilities |
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Lease payable, long-term |
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Deferred revenue, long-term |
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Notes payable, long-term |
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Convertible debentures payable to non-related parties, at fair value |
— | |||||||
Convertible debentures payable to related parties, at fair value |
— | |||||||
Deferred tax |
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Total liabilities |
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Commitments and contingencies (Note 9) |
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Stockholders’ equity: |
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Preferred stock, $ par value: authorized |
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Common stock, $ par value: authorized |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Treasury stock at cost, |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
||||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | $ | ||||||
|
|
|
|
|||||
See accompanying notes to consolidated financial statements. |
For the Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
(in thousands except per share data) | ||||||||||||
Revenue: |
||||||||||||
Products |
$ | $ | $ | |||||||||
Service and supplies |
||||||||||||
|
|
|
|
|
|
|||||||
Total revenue |
||||||||||||
Cost of Revenue: |
||||||||||||
Products |
||||||||||||
Service and supplies |
||||||||||||
Amortization and depreciation |
||||||||||||
|
|
|
|
|
|
|||||||
Total cost of revenue |
||||||||||||
|
|
|
|
|
|
|||||||
Gross profit |
||||||||||||
|
|
|
|
|
|
|||||||
Operating expenses: |
||||||||||||
Engineering and product development |
||||||||||||
Marketing and sales |
||||||||||||
General and administrative |
||||||||||||
Amortization and depreciation |
||||||||||||
|
|
|
|
|
|
|||||||
Total operating expenses |
||||||||||||
|
|
|
|
|
|
|||||||
Loss from operations |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Other expense |
||||||||||||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Interest income |
||||||||||||
Financing costs |
— | — | ( |
) | ||||||||
Loss on extinguishment of debt |
( |
) | — | — | ||||||||
Loss on fair value of convertible debentures |
( |
) | ( |
) | — | |||||||
|
|
|
|
|
|
|||||||
Other expense, net |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ||||||
Income tax expense |
||||||||||||
|
|
|
|
|
|
|||||||
Net loss and comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
|
|
|
|
|
|
|||||||
Net loss per share: |
||||||||||||
Basic |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Diluted |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Weighted average number of shares used in computing net loss per share: |
||||||||||||
Basic |
||||||||||||
Diluted |
||||||||||||
See accompanying notes to consolidated financial statements. |
Common Stock |
Additional |
|||||||||||||||||||||||
Number of |
Paid-in |
Accumulated |
Treasury |
Stockholders’ |
||||||||||||||||||||
Shares Issued |
Par Value |
Capital |
Deficit |
Stock |
Equity |
|||||||||||||||||||
Balance at December 31, 2017 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||
Cumulative impact from the adoption of ASC 606 (see Note 1) |
— |
— |
— |
— |
||||||||||||||||||||
Issuance of common stock relative to vesting of restricted stock, net of |
( |
) |
— |
— |
( |
) | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
1 |
— |
— |
|||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
||||||||||||||||||||
Net loss |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2018 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of common stock relative to vesting of restricted stock, net of |
( |
) |
— |
— |
( |
) | ||||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— |
— |
||||||||||||||||||||||
Issuance of common stock, net |
— |
— |
||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
||||||||||||||||||||
Net Loss |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2019 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Issuance of common stock relative to vesting of restricted stock, net of |
— |
( |
) |
— |
— |
( |
) | |||||||||||||||||
Issuance of common stock pursuant to stock option plans |
— |
— |
||||||||||||||||||||||
Issuance of common stock, net |
— |
— |
||||||||||||||||||||||
Issuance of common stock pursuant employee stock purchase plan |
— |
— |
||||||||||||||||||||||
Issuance of common stock upon conversion of debentures |
— |
— |
||||||||||||||||||||||
Stock-based compensation |
— |
— |
— |
— |
||||||||||||||||||||
Net loss |
— |
— |
— |
( |
) |
— |
( |
) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Balance at December 31, 2020 |
$ |
$ |
$ |
( |
) |
$ |
( |
) |
$ |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
For the Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
(in thousands) |
||||||||||||
Cash flow from operating activities: |
||||||||||||
Net loss |
$ |
( |
) |
$ |
( |
) |
$ |
( |
) | |||
Adjustments to reconcile net loss to net cash used for operating activities: |
||||||||||||
Amortization |
||||||||||||
Depreciation |
||||||||||||
Bad debt provision |
||||||||||||
Stock-based compensation expense |
||||||||||||
Amortization of debt discount and debt costs |
||||||||||||
Loss on extinguishment of debt |
— |
— |
||||||||||
Deferred tax |
( |
) | ||||||||||
Loss on disposal of assets |
— |
— |
||||||||||
Change in fair value of convertible debentures |
— |
|||||||||||
Changes in operating assets and liabilities, net of acquisition: |
||||||||||||
Accounts receivable |
( |
) |
( |
) |
||||||||
Inventory |
( |
) |
( |
) |
||||||||
Prepaid and other assets |
( |
) |
||||||||||
Accounts payable |
( |
) | ||||||||||
Accrued and other expenses |
( |
) |
||||||||||
Deferred revenue |
( |
) | ||||||||||
|
|
|
|
|
|
|||||||
Total adjustments |
||||||||||||
|
|
|
|
|
|
|||||||
Net cash used for operating activities |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Cash flow used for investing activities: |
||||||||||||
Additions to patents, technology and other |
( |
) |
( |
) |
( |
) | ||||||
Additions to property and equipment |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Net cash provided by (used for) investing activities |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Cash flow from financing activities: |
||||||||||||
Issuance of common stock for cash, net |
— |
|||||||||||
Issuance of common stock pursuant to Employee Stock Purchase Plan |
— |
— |
||||||||||
Issuance of common stock pursuant to stock option plans |
||||||||||||
Taxes paid related to restricted stock issuance |
( |
) |
( |
) |
( |
) | ||||||
Proceeds from convertible debentures |
— |
— |
||||||||||
Principal payments of capital lease obligations |
— |
( |
) |
( |
) | |||||||
Proceeds from notes payable |
— |
— |
||||||||||
Principal repayment of notes payable |
( |
) |
( |
) |
— |
|||||||
Debt issuance costs |
( |
) |
— |
— |
||||||||
Proceeds from line of credit |
— |
|||||||||||
Repayment line of credit |
( |
) |
( |
) |
— |
|||||||
|
|
|
|
|
|
|||||||
Net cash provided by financing activities |
||||||||||||
|
|
|
|
|
|
|||||||
Increase in cash and equivalents |
||||||||||||
Cash and equivalents, beginning of year |
||||||||||||
|
|
|
|
|
|
|||||||
Cash and equivalents, end of year |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Supplemental disclosure of cash flow information: |
||||||||||||
Interest paid |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Taxes paid |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
|||||||
Right-of-use |
— |
|||||||||||
|
|
|
|
|
|
|||||||
Issuance of common stock upon conversion of debentures |
$ |
— |
— |
|||||||||
|
|
|
|
|
|
(1) |
Summary of Significant Accounting Policies |
2020 |
2019 |
2018 |
||||||||||
Balance at beginning of period |
$ |
$ |
$ |
|||||||||
Additions charged to costs and expenses |
||||||||||||
Reductions |
( |
) |
( |
) |
( |
) | ||||||
|
|
|
|
|
|
|||||||
Balance at end of period |
$ |
$ |
$ |
|||||||||
|
|
|
|
|
|
Inventory balances, net of reserves, were as follows: |
| |||||||
December 31, |
December 31, |
|||||||
2020 |
2019 |
|||||||
Raw materials |
$ |
$ |
||||||
Work in process |
||||||||
Finished Goods |
||||||||
|
|
|
|
|||||
Inventory Net |
$ |
$ |
||||||
|
|
|
|
Estimated life | ||
Equipment |
||
Leasehold improvements |
||
Furniture and fixtures |
||
Marketing assets |
• | 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 December 31, 2020 |
$ |
— |
$ |
$ |
— |
$ |
||||||||||
|
|
|
|
|
|
|
|
• | A significant decrease in the market price of a long-lived asset (asset group); |
• | A significant adverse change in the extent or manner in which a long-lived asset (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 (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 (asset group); |
• | A current period operating 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 (asset group). |
Weighted |
||||||||||||
average |
||||||||||||
2020 |
2019 |
useful life |
||||||||||
Gross Carrying Amount |
||||||||||||
Patents and licenses |
$ |
$ |
||||||||||
Technology |
||||||||||||
Customer relationships |
||||||||||||
Tradename |
||||||||||||
|
|
|
|
|||||||||
Total amortizable intangible assets |
||||||||||||
|
|
|
|
|||||||||
Accumulated Amortization |
||||||||||||
Patents and licenses |
$ |
$ |
||||||||||
Technology |
||||||||||||
Customer relationships |
||||||||||||
Tradename |
||||||||||||
|
|
|
|
|||||||||
Total accumulated amortization |
||||||||||||
|
|
|
|
|||||||||
Total amortizable intangible assets, net |
$ |
$ |
||||||||||
|
|
|
|
Estimated |
||||
For the years ended |
amortization |
|||
December 31: |
expense |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
2025 |
||||
|
|
|||
$ | ||||
|
|
1) |
Identify the contract(s) with a customer |
2) |
Identify the performance obligations in the contract |
both capable of being distinct, whereby the customer can benefit from the good or service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the goods or services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised goods or services, the Company must apply judgment to determine whether promised goods or services are capable of being distinct and distinct in the context of the contract. If these criteria are not met the promised goods or services are accounted for as a combined performance obligation. The Company’s contracts typically do not include options that would result in a material right. If options to purchase additional goods or services are included in customer contracts, the Company evaluates the option in order to determine if the Company’s arrangement include promises that may represent a material right and needs to be accounted for as a performance obligation in the contract with the customer. The Company did not note any significant provisions within its typical contracts that would create a material right. |
3) |
Determine the transaction price |
4) |
Allocate the transaction price to the performance obligations in the contract |
5) |
Recognize revenue when (or as) the Company satisfies a performance obligation |
Year ended December 31, 2020 |
||||||||||||
Reportable Segments |
||||||||||||
Detection |
Therapy |
Total |
||||||||||
Major Goods/Service Lines |
||||||||||||
Products |
$ | |
$ | |
$ | |
||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Timing of Revenue Recognition |
||||||||||||
Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Year ended December 31, 2019 |
||||||||||||
Reportable Segments |
||||||||||||
Detection |
Therapy |
Total |
||||||||||
Major Goods/Service Lines |
||||||||||||
Products |
$ | |
$ | |
$ | |
||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Timing of Revenue Recognition |
||||||||||||
Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Sales Channels |
||||||||||||
Direct sales |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Year ended December 31, 2018 |
||||||||||||
Reportable Segments |
||||||||||||
Detection |
Therapy |
Total |
||||||||||
Major Goods/Service Lines |
||||||||||||
Products |
$ | |
$ | |
$ | |
||||||
Service contracts |
||||||||||||
Supply and source usage agreements |
— | |||||||||||
Professional services |
— | |||||||||||
Other |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Timing of Revenue Recognition |
||||||||||||
Goods transferred at a point in time |
$ | $ | $ | |||||||||
Services transferred over time |
||||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Sales Channels |
||||||||||||
Direct sales force |
$ | $ | $ | |||||||||
OEM partners |
— | |||||||||||
Channel partners |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
|||||||
Total Revenue |
||||||||||||
Revenue from contracts with customers |
$ | $ | $ | |||||||||
Revenue from lease components |
— | |||||||||||
|
|
|
|
|
|
|||||||
$ | $ | $ | ||||||||||
|
|
|
|
|
|
Balance at December 31, 2020 |
Balance at December 31, 2019 |
|||||||
Receivables, which are included in “Trade accounts receivable” |
$ | |
$ | |
||||
Current contract assets, which are included in “Prepaid and other assets” |
||||||||
Non-current contract assets, which are included in “other assets” |
||||||||
Contract liabilities, which are included in “Deferred revenue” |
Contract liabilities |
December 31, 2020 |
December 31, 2019 |
||||||
Short term |
$ | |
$ | |
||||
Long term |
||||||||
Total |
$ | $ | ||||||
Year Ended December 31, 2020 |
Year Ended December 31, 2019 |
|||||||
Balance at beginning of period |
$ | |
$ | |
||||
Deferral of revenue |
||||||||
Recognition of deferred revenue |
( |
) | ( |
) | ||||
Balance at end of period |
$ | $ | ||||||
Years Ended December 31, |
||||||||
2020 |
2019 |
|||||||
Balance at beginning of period |
$ | |
$ | |
||||
Deferral of costs to obtain a contract |
||||||||
Recognition of costs to obtain a contract |
( |
) | ( |
) | ||||
Balance at end of period |
$ | $ | ||||||
2020 |
2019 |
2018 |
||||||||||
Beginning accrual balance |
$ | |
$ | |
$ | |
||||||
Warranty provision |
||||||||||||
Usage |
( |
) | ( |
) | ( |
) | ||||||
|
|
|
|
|
|
|||||||
Ending accrual balance |
$ | $ | $ | |||||||||
|
|
|
|
|
|
2020 |
2019 |
2018 |
||||||||||
Net loss available to common shareholders |
$ |
( |
) | $ |
( |
) | $ |
( |
) | |||
|
|
|
|
|
|
|||||||
Basic shares used in the calculation of earnings per share |
||||||||||||
Effect of dilutive securities: |
||||||||||||
Stock options |
— | — | — | |||||||||
Restricted stock |
— | — | — | |||||||||
|
|
|
|
|
|
|||||||
Diluted shares used in the calculation of earnings per share |
||||||||||||
|
|
|
|
|
|
|||||||
Net loss per share : |
||||||||||||
Basic |
$ ( |
) | $ ( |
) | $ ( |
) | ||||||
Diluted |
$ ( |
) | $ ( |
) | $ ( |
) |
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Common stock options |
||||||||||||
Restricted Stock |
||||||||||||
Convertible Debentures |
— | |||||||||||
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
• | 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 as of December 31, 2020 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Money market accounts |
$ | |
|
|
$ | |
||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Assets |
$ | |
$ | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Convertible debentures |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Liabilities |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Fair Value Measurements as of December 31, 2019 |
||||||||||||||||
Level 1 |
Level 2 |
Level 3 |
Total |
|||||||||||||
Assets |
||||||||||||||||
Money market accounts |
$ | — | — | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Assets |
$ | — | — | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities |
||||||||||||||||
Convertible debentures |
— | — | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Liabilities |
— | — | $ | $ | ||||||||||||
|
|
|
|
|
|
|
|
Convertible Debentures | ||||
Balance, December 20, 2019 |
$ | |||
Issuances |
||||
Fair value adjustments |
||||
Conversion |
( |
) | ||
|
|
|||
Balance, December 31, 2020 |
$ | |||
|
|
(2) |
Sale of MRI Assets |
(3) |
Financing Arrangements |
December 31, 2020 (Western Alliance Bank) * |
||||
Principal Amount of Term Loan |
$ | |||
Unamortized closing costs |
( |
) | ||
Accrued Final Payment |
||||
Amount Drawn on Line of Credit |
— | |||
|
|
|||
Carrying amount of Term Loan |
||||
|
|
|||
Less current portion of Term Loan |
||||
|
|
|||
Notes payable long-term portion |
$ | |||
|
|
|||
* No December 31, 2019 balance. Debt opened in 2020 |
December 31, 2019 (Silicon Valley Bank) * |
||||
Principal Amount of Term Loan |
$ | |||
Unamortized closing costs |
( |
) | ||
Accrued Final Payment |
||||
Amount Drawn on Line of Credit |
||||
|
|
|||
Carrying amount of Term Loan |
||||
|
|
|||
Less current portion of Term Loan |
( |
) | ||
|
|
|||
Notes payable long-term portion |
$ | |||
|
|
|||
* No December 31, 2020 balance. Debt closed in 2020 |
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 |
$ | $ | ||||||
|
|
|
|
Fiscal Year |
Amount Due |
|||
2021 |
||||
2022 |
||||
2023 |
||||
2024 |
||||
|
|
|||
Total |
$ | |||
|
|
Year Ended December 31, |
||||||||||||
2020 | 2019 | 2018 | ||||||||||
Cash interest expense, notes payable |
$ | $ | $ | |||||||||
Cash interest expense, convertible debentures |
||||||||||||
Amortization of debt costs |
||||||||||||
Accrual of notes payable final payment |
||||||||||||
Interest expense capital lease |
— | |||||||||||
|
|
|
|
|
|
|||||||
Total interest expense |
$ | $ | $ | |||||||||
|
|
|
|
|
|
(4) |
Accrued and Other Expenses |
2020 | 2019 | |||||||
Accrued salary and related expenses |
$ | $ | ||||||
Accrued accounts payable |
||||||||
Accrued professional fees |
||||||||
Other accrued expenses |
||||||||
|
|
|
|
|||||
$ | |
$ | |
|||||
|
|
|
|
(5) |
Leases |
Year Ended December 31, |
||||||||||
Lease Cost |
Classification |
2020 |
2019 |
|||||||
Operating lease cost - Right of Use |
Operating expenses | $ | $ | |||||||
Operating lease cost - Variable Costs |
Operating expenses | $ | ||||||||
Finance lease costs |
||||||||||
Amortization of leased assets |
Amortization and depreciation | |||||||||
Interest on lease liabilities |
Interest expense | |||||||||
|
|
|
|
|||||||
Total |
$ | $ | ||||||||
|
|
|
|
|||||||
Other information related to leases was as follows (in thousands): |
| |||||||||
2020 |
2019 |
|||||||||
Cash paid for operating cash flows from operating leases |
$ | $ | ||||||||
Cash paid for operating cash flows from finance leases |
||||||||||
Cash paid for financing cash flows from finance leases |
||||||||||
2020 |
2019 |
|||||||||
Weighted-average remaining lease term of operating leases (in years) |
||||||||||
Weighted-average remaining lease term of finance leases (in years) |
.00 | |||||||||
Weighted-average discount rate for operating leases |
% | % | ||||||||
Weighted-average discount rate for finance leases |
% |
Year Ended December 31, 2020: |
Operating Leases |
|||
2021 |
$ |
|||
2022 |
||||
2023 |
||||
2024 |
||||
|
|
|||
Total lease payments |
||||
Less: imputed interest |
( |
) | ||
|
|
|||
Total |
||||
Less: current portion of lease liabilities |
( |
) | ||
|
|
|||
Long-term lease liabilities |
$ | |||
|
|
(6) |
Stockholders’ Equity |
Number of Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Term |
||||||||||
Outstanding, December 31, 2018 |
$ | |||||||||||
Granted |
$ | |||||||||||
Exercised |
( |
) | $ | |||||||||
Forfeited |
( |
) | $ | |||||||||
Outstanding, December 31, 2019 |
$ | |||||||||||
Granted |
$ | |||||||||||
Exercised |
( |
) | $ | |||||||||
Forfeited |
( |
) | $ | |||||||||
Outstanding, December 31, 2020 |
$ | |||||||||||
Exercisable at December 31, 2018 |
$ | |||||||||||
Exercisable at December 31, 2019 |
$ | |||||||||||
Exercisable at December 31, 2020 |
$ | |||||||||||
Year Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Cost of revenue |
$ | $ | $ | |||||||||
Engineering and product development |
||||||||||||
Marketing and sales |
||||||||||||
General and administrative expense |
||||||||||||
$ |
$ |
$ |
||||||||||
Year Ended December 31, | ||||||
2020 |
2019 |
2018 | ||||
Average risk-free interest rate |
||||||
Expected dividend yield |
||||||
Expected life |
||||||
Expected volatility |
||||||
Weighted average exercise price |
$ |
$ |
$ | |||
Weighted average fair value |
$ |
$ |
$ |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Outstanding |
$ | $ | $ | |||||||||
Exercisable |
||||||||||||
Exercised |
||||||||||||
Company’s stock price at December 31 |
$ | $ | $ |
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Beginning outstanding balance |
||||||||||||
Granted |
— | |||||||||||
Vested |
( |
) | ( |
) | ( |
) | ||||||
Forfeited |
( |
) | ( |
) | ( |
) | ||||||
Ending outstanding balance |
||||||||||||
Years Ended December 31, |
||||||||||||
2020 |
2019 |
2018 |
||||||||||
Outstanding |
$ | $ | $ | |||||||||
Vested |
||||||||||||
Company’s stock price at December 31 |
$ | $ | $ |
(7) |
Income Taxes |
2020 | 2019 | 2018 | ||||||||||
Current provision (benefit): |
||||||||||||
Federal |
$ | $ | — | $ | — | |||||||
State |
||||||||||||
$ | $ | $ | ||||||||||
Deferred provision: |
||||||||||||
Federal |
$ | $ | $ | ( |
) | |||||||
State |
— | — | ( |
) | ||||||||
$ | $ | $ | ( |
) | ||||||||
Total |
$ | $ | $ | |||||||||
2020 | 2019 | 2018 | ||||||||||
Federal statutory rate |
% |
% |
% | |||||||||
State income taxes, net of federal benefit |
% |
% |
% | |||||||||
Net state impact of deferred rate change |
( |
%) |
( |
%) |
% | |||||||
Stock compensation expense |
% |
( |
%) |
( |
%) | |||||||
Tax amortization on goodwill |
% |
% |
% | |||||||||
Goodwill impairment |
% |
% |
% | |||||||||
Other permanent differences |
( |
%) |
% |
( |
%) | |||||||
Change in valuation allowance |
( |
%) |
( |
%) |
( |
%) | ||||||
Tax credits |
% |
% |
% | |||||||||
Federal Rate Change |
% |
% |
% | |||||||||
Accrual to tax return |
% |
% |
% | |||||||||
Increase Xoft NOLs under 382 Study |
% |
% |
% | |||||||||
Change in FV of convertible debt |
( |
%) |
( |
%) |
% | |||||||
Foreign Rate Differential |
% |
% |
% | |||||||||
True Ups - NOL Expiration/162(m) limits |
( |
%) |
% |
% | ||||||||
Effective income tax |
( |
%) |
( |
% ) |
( |
% ) | ||||||
2020 | 2019 | |||||||
Inventory (Section 263A) |
$ | $ | ||||||
Inventory reserves |
||||||||
Receivable reserves |
||||||||
Other accruals |
||||||||
Deferred revenue |
||||||||
Accumulated depreciation/amortization |
||||||||
Stock options |
||||||||
Developed technology |
||||||||
Tax credits |
||||||||
NOL carryforward |
||||||||
Lease liability |
||||||||
Net deferred tax assets |
||||||||
Valuation allowance |
( |
) | ( |
) | ||||
Right of Use Asset |
( |
) | ( |
) | ||||
Goodwill tax amortization |
( |
) | ( |
) | ||||
Deferred tax liability |
$ | ( |
) | $ | ( |
) | ||
(8) |
Segment Reporting, Geographical Information and Major Customers |
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
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 |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Interest expense |
( |
) | ( |
) | ( |
) | ||||||
Financing costs |
— | — | ( |
) | ||||||||
Loss on extinguishment of debt |
( |
) | ||||||||||
Other income |
||||||||||||
Fair value of convertible debentures |
( |
) | ( |
) | ||||||||
Loss before income tax |
$ | ( |
) | $ | ( |
) | $ | ( |
) | |||
Year Ended December 31, | ||||||||||||
2020 | 2019 | 2018 | ||||||||||
Detection depreciation and amortization |
||||||||||||
Depreciation |
$ | $ | $ | |||||||||
Amortization |
||||||||||||
Therapy depreciation and amortization |
||||||||||||
Depreciation |
$ | $ | $ | |||||||||
Amortization |
Percent of Export sales |
||||||||||||
Region |
2020 | 2019 | 2018 | |||||||||
Europe |
% | % | % | |||||||||
Taiwan |
% | % | % | |||||||||
Canada |
% | % | % | |||||||||
China |
% | % | % | |||||||||
Other |
% | % | % | |||||||||
|
|
|
|
|
|
|||||||
Total |
% | % | % | |||||||||
|
|
|
|
|
|
|||||||
Total Export sales |
$ | $ | $ |
Percent of Export sales |
||||||||||||
Region |
2020 | 2019 | 2018 | |||||||||
France |
% | % | % | |||||||||
Spain |
% | % | % | |||||||||
Germany |
% | % | % | |||||||||
Italy |
% | % | % | |||||||||
United Kingdon |
|
% | |
% | |
% |
(9) |
Commitments and Contingencies |
EXHIBIT 21
Subsidiaries of iCAD, Inc.
Name |
Jurisdiction of Incorporation/Organization | |
Xoft, Inc. | Delaware | |
Xoft Solutions, LLC | Delaware | |
PMDE ICAD | France |
EXHIBIT 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
iCAD, Inc.
Nashua, New Hampshire
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3 (No. 333-228514, 333-229452 and 333-235887) and Form S-8 (No. 333-201874, 333-187660, 333-99973, 333-119509, 333-139023, 333-144671, 333-161959, 333-211656, 333-229453 and 333-235580) and Form S-3MEF (No. 333-253808) of iCAD, Inc. and subsidiaries of our report dated March 15, 2021, relating to the consolidated financial statements which appear in this Annual Report on Form 10-K.
/s/ BDO USA, LLP
Boston, Massachusetts
March 15, 2021
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, Michael Klein, certify that:
1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 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: March 15, 2021 | /s/ Michael Klein | |||
Michael Klein | ||||
Chief Executive Officer | ||||
(Principal Executive Officer) |
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, R. Scott Areglado, certify that:
1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 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: March 15, 2021 | /s/ R. Scott Areglado | |||
R. Scott Areglado | ||||
Chief Financial Officer | ||||
(Principal Financial Officer) |
EXHIBIT 32.1
iCAD, Inc.
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 Annual Report of iCAD, Inc. (the Company) on Form 10-K for the fiscal year ended December 31, 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 |
Michael Klein |
Chief Executive Officer and Director |
(Principal Executive Officer) |
Date: March 15, 2021
EXHIBIT 32.2
iCAD, Inc.
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 Annual Report of iCAD, Inc. (the Company) on Form 10-K for the fiscal year ended December 31, 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 |
R. Scott Areglado |
Chief Financial Officer |
(Principal Financial Officer) |
Date: March 15, 2021
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Statement of Financial Position [Abstract] | |||
Allowance for doubtful accounts on trade accounts receivable | $ 111 | $ 136 | |
Intangible assets, accumulated amortization | $ 8,494 | $ 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 | 23,693,735 | 19,546,151 | |
Common stock, shares outstanding | 23,508,575 | 19,360,320 | |
Treasury stock, shares | 185,831 | 185,831 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Common Stock [Member] | |||
Shares forfeited for tax obligations | 20,247 | 29,887 | 56,946 |
Additional Paid-in Capital [Member] | |||
Shares forfeited for tax obligations | 20,247 | 29,887 | 56,946 |
Summary of Significant Accounting Policies |
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Significant Accounting Policies |
(a) Nature of Operations and Use of Estimates iCAD, Inc. and subsidiaries (the “Company” or “iCAD”) is a global medical technology company providing innovative cancer detection and therapy solutions The Company has grown primarily through acquisitions to become a broad player in the cancer detection and therapy market. Its solutions include advanced artificial intelligence and image analysis workflow solutions that enable healthcare professionals to better serve patients by identifying pathologies and pinpointing the most prevalent cancers earlier, a comprehensive range of high-performance, upgradeable Computer-Aided Detection (“CAD”) systems and workflow solutions for digital breast tomosynthesis (“DBT”), full-field digital mammography (“FFDM”), MRI and CT, and the Xoft System which is an isotope-free cancer treatment platform technology. CAD is reimbursable in the U.S. under federal and most third-party insurance programs. The Company intends to continue the extension of its image analysis and clinical decision support solutions for DBT, FFDM, MRI and CT imaging. iCAD believes that advances in digital imaging techniques should bolster its efforts to develop additional commercially viable CAD/advanced image analysis and workflow products. The Company’s management believes that early detection in combination with earlier targeted intervention will provide patients and care providers with the best tools available to achieve better clinical outcomes resulting in a market demand that will drive top line growth. The Company’s headquarters are located in Nashua, New Hampshire, with a manufacturing facility in New Hampshire and an operations, research, development, manufacturing and warehousing facility in San Jose, California. The Company operates in two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products, and the Therapy segment consists of radiation therapy products. The Company sells its products throughout the world through its direct sales organization as well as through various OEM partners, distributors and resellers. See Note 8 for segment, major customer and geographical information. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to assets and liabilities. (b) Risk and Uncertainty On March 12, 2020, the Wor l d 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 and social distancing orders as well as uncertainty in the market. Significant uncertainty remains as to the continuing impact of the 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 Company’s results for the year ending December 31, 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. 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 year ended December 31, 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. ( c ) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Xoft, Inc. and Xoft Solutions, LLC. All material inter-company transactions and balances have been eliminated in consolidation. ( d ) Cash and cash equivalents The Company defines cash and cash equivalents as all bank accounts, money market funds, deposits and other money market instruments with original maturities of 90 days or less, which are unrestricted as to withdrawal. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Insurance coverage is $250,000 per depositor at each financial institution, and the Company’s non-interest bearing cash balances exceed federally insured limits. Interest-bearing amounts on deposit in excess of federally insured limits at December 31, 2020 approximated $26.7 million. ( e ) Financial instruments Financial instruments consist of cash and cash equivalents, accounts receivable, contract assets, accounts payable, 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, approximated fair value as of December 31, 2020 and 2019. The Company has elected to record the convertible debentures at fair value at each reporting date in accordance with the fair value option election. See Note 3( c ) for further details. ( f ) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. Credit limits are established through a process of reviewing the financial history and stability of each customer. The Company performs continuing credit evaluations of its customers’ financial condition and generally does not require collateral. The Company’s policy is to maintain allowances for estimated losses from the inability of its customers to make required payments. The Company’s senior management reviews accounts receivable on a periodic basis to determine if any receivables may potentially be uncollectible. The Company includes any accounts receivable balances that it determines may likely be uncollectible, along with a general reserve for estimated probable losses based on historical experience, in its overall allowance for doubtful accounts. An amount would be written off against the allowance after all attempts to collect the receivable had failed. Based on the information available, the Company believes the allowance for doubtful accounts as of December 31, 2020 and 2019 is adequate. The following table summarizes the allowance for doubtful accounts for the three years ended December 31, 2020 (in thousands):
( g ) 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. At December 31, 2020 and 2019, inventories consisted of the following (in thousands), which includes an inventory reserve of approximately $0.2 million and $0.5 million as December 31, 2020 and 2019, respectively. Inventory balances, net of reserves, were as follows:
( h ) Property and Equipment Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets or the remaining lease term, if shorter, for leasehold improvements (see below).
( i ) Goodwill In accordance with FASB Accounting Standards Codification (“ASC”) Topic 350-20, “Intangibles—Goodwill and Other” 350-20”), 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 the carrying value of the reporting unit. Factors the Company considers important, which could trigger an impairment of such asset, include the following:
The Company records an impairment charge when such assessment indicates that the fair value of a reporting unit was 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 value of reporting units based on the present value of estimated future cash flows, discounted at an appropriate risk adjusted rate. This approach was selected as it measures the income producing assets, primarily technology and customer relationships. This method estimates the fair value based upon the ability to generate future cash flows, which is particularly applicable when future profit margins and growth are expected to vary significantly from historical operating results. The Company uses internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on the most recent views of the long-term forecast for the reporting unit. Accordingly, actual results can differ from those assumed in the forecasts. Discount rates are derived from a capital asset pricing model and analyzing published rates for industries relevant to the reporting unit 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 and in the internally developed forecasts. Other significant assumptions include terminal value margin rates, future capital expenditures, and changes in future working capital requirements. While there are inherent uncertainties related to the assumptions used and to the application of these assumptions to this analysis, the income approach provides a reasonable estimate of the fair value of the Therapy reporting unit. The Company performed the annual impairment assessments at October 1, 2020 and 2019, respectively, and compared the fair value of each reporting unit to its carrying value as of each date. The fair value exceeded the carrying value for the Detection reporting unit as of each date of these impairment assessments. Goodwill for the Therapy reporting unit was fully impaired as of December 31, 2017. As such, the Company did not record any impairment charges for the years ended December 31, 2020 or 2019. The carrying values of the reporting units were determined based on an allocation of the Company’s assets and liabilities through specific allocation of certain assets and liabilities, to the reporting units and an apportionment of the remaining net assets based on the relative size of the reporting units’ revenues and operating expenses compared to the Company as a whole. The determination of reporting units also requires management judgment. 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 the Company’s 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 and in its 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 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 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 value. 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. A rollforward of goodwill activity by reportable segment is as follows (in thousands):
( j ) Long Lived Assets In accordance with FASB ASC Topic 360, “ Property, Plant and Equipment ASC 360-10-35 360-10-35-21,
In accordance with ASC 360-10-35-17, Undiscounted cash flows exceeded the carrying value of the asset group and that long-lived assets were not impaired. The Company did not record any impairment charges related to long lived assets for the years ended December 31, 2020 or 2019. A considerable amount of judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of the asset group. While the Company believes the 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. Intangible assets subject to amortization consist primarily of patents, technology, customer relationships and trade names purchased in the Company’s previous acquisitions. These assets, which include assets from the acquisition of the assets of VuComp, DermEbx and Radion and the acquisition of Xoft, Inc., are amortized on a straight-line basis consistent with the pattern of economic benefit over their estimated useful lives of 5 to 10 years. A summary of intangible assets for 2020 and 2019 is as follows (in thousands):
Amortization expense related to intangible assets was approximately $309,000, $377,000 and $383,000 for the years ended December 31, 2020, 2019, and 2018, respectively. Estimated remaining amortization of the Company’s intangible assets is as follows (in thousands):
( k ) Revenue Recognition On January 1, 2018, the Company adopted FASB ASC Topic 606, “Revenue from Contracts with Customers” and all the related amendments (“Topic 606”), using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4, The Company recorded a net increase to opening retained earnings of $0.1 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to the deferral of commissions on the Company’s long-term service arrangements and warranty periods greater than one year, which previously were expensed as incurred but, under the amendments to ASC 340-40, are now generally capitalized and amortized over the period of contract performance or a longer period if renewals are expected and the renewal commission is not commensurate with the initial commission. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to 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. To achieve this core principle, the Company applies the following five steps:
The Company recognizes revenue from its contracts with customers primarily from the sale of products and from the sale of services and supplies. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For product revenue, control has transferred upon shipment provided title and risk of loss have passed to the customer. Services and supplies are considered to be transferred as the services are performed or over the term of the service or supply agreement. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company’s hardware is generally highly dependent on, and interrelated with, the underlying software and the software is considered essential to the functionality of the product. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of revenue. The Company continues to provide for estimated warranty costs on original product warranties at the time of sale. 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 Upon the adoption of ASC 842, effective January 1, 2019, the lease components of certain fixed fee service contracts are no longer being separately accounted for under the lease guidance, and the entire contract is being accounted for under ASC 606. Upon the adoption of ASC 606, effective January 1, 2018, and until the adoption of ASC 842 referred to above, these lease components were accounted for as a lease in accordance with ASC 840, “ Leases non-lease components, such as service contracts, was recognized on a straight-line basis over the term of the agreements. Supply and Source Usage Agreements Professional Services Other Significant Judgments The Company’s contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when the Company sells each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. The Company provides for estimated warranty costs on original product warranties at the time of sale. Contract Balances Contract liabilities are a component of deferred revenue, current contract assets are a component of prepaid and other assets and non-current contract assets are a component of other assets. The following table provides information about receivables, current and non-current contract assets, and contract liabilities from contracts with customers (in thousands). Contract balances
Timing of revenue recognition may differ from timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to receipt of cash payments 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 records net contract assets or contract liabilities on a contract-by-contract non-current based on the expected timing of the Company’s right to bill under the terms of the contract. The current contract asset balance primarily relates to the net unbilled revenue balances with two significant customers, which the Company expects to be able to bill for within one year. The non-current contract asset balance consists of net unbilled revenue balances with one customer which the Company expects to be able to bill for in more than one year. Contract liabilities, or deferred revenue from contracts with customers, is primarily composed of fees related to long-term 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 the Company has been paid in advance and earn the revenue when it transfers control of the product or service. The balance of deferred revenue at December 31, 2020 and December 31, 2019 is as follows (in thousands):
Changes in deferred revenue from contracts with customers were as follows (in thousands):
The Company expects to recognize estimated revenues related to performance obligation that are unsatisfied (or partially satisfied) in the amounts of approximately $7.1 million in 2021, $1.2 million in 2022 and $1.0 million in each year from 2023-2025. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain commissions programs meet the requirements to be capitalized. As of December 31, 2020, the balance of capitalized costs to obtain a contract was $406,000 compared to $379,000 as of December 31, 2019. The Company has classified the capitalized costs to obtain a contract as a component of prepaid expenses and other current assets as of December 31, 2020 and 2019, respectively. Changes in the balance of capitalized costs to obtain a contract were as follows (in thousands):
Practical Expedients and Exemptions The Company has elected to make the following accounting policy elections through the adoption of the following practical expedients: Right to Invoice Where applicable, the Company will recognize revenue from a contract with a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date and the amount to which the entity has a right to invoice. Sales and Other Similar Taxes The Company will exclude sales taxes and similar taxes from the measurement of transaction price and will ensure that it complies with the disclosure requirements of ASC 235-10-50-1 50-6. Significant Financing Component The Company will not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Cost to Obtain a Contract The Company will recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less and there are no renewal periods on which the Company does not pay commissions that are not commensurate with those originally paid. Promised Goods or Services that are Immaterial in the Context of a Contract The Company has elected to assess promised goods or services as performance obligations that are deemed to be immaterial in the context of a contract. As such, the Company will not aggregate and assess immaterial items at the entity level. That is, when determining whether a good or service is immaterial in the context of a contract, the assessment will be made based on the application of ASC 606 at the contract level. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. (k) Cost of Revenue Cost of revenue consists of the costs of products purchased for resale, cost relating to service including costs of service contracts to maintain equipment after the warranty period, inbound freight and duty, manufacturing, warehousing, material movement, inspection, scrap, rework, depreciation and in-house product warranty repairs, amortization of acquired technology and medical device tax. (l) Warranty Costs The Company provides for the estimated cost of standard product warranty against defects in material and workmanship based on historical warranty trends, including the cost of product returns during the warranty period. Warranty provisions and claims for the years ended December 31, 2020, 2019 and 2018, were as follows (in thousands):
(m) Engineering and Product Development Costs Engineering and product development costs relate to research and development efforts including Company sponsored clinical trials which are expensed as incurred. (n) Advertising Costs The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2020, 2019 and 2018 was approximately $211,000, $1,084,000 and $811,000 respectively. (o) Net Loss per Common Share The Company follows FASB ASC 260-10, “Earnings per Share”, which requires the presentation of both basic and diluted earnings per share on the face of the statements of operations. 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 and, if there are dilutive securities, diluted income per share is computed by including common stock equivalents which includes shares issuable upon the exercise of stock options, net of shares assumed to have been purchased with the proceeds, using the treasury stock method. A summary of the Company’s calculation of net loss per share is as follows (in thousands, except per share amounts):
The following table summarizes the number of shares of common stock for convertible securities, warrants and restricted stock that were not included in the calculation of diluted net loss per share because such shares are antidilutive:
Restricted common stock can be issued to directors, executives or employees of the Company and are subject to time-based vesting. These potential shares were excluded from the computation of basic loss per share as these shares are not considered outstanding until vested. (p) Income Taxes The Company follows the liability method under ASC Topic 740 “ Income Taxes ASC 740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 also provides guidance on de-recognition, classification, interest and penalties, disclosure and transition. (q) Stock-Based Compensation The Company maintains stock-based incentive plans, under which it provides stock incentives to employees, directors and contractors. The Company may grant to employees, directors and contractors, options to purchase common stock at an exercise price equal to the market value of the stock at the date of grant. The Company may grant restricted stock to employees and directors. The underlying shares of the restricted stock grant are not issued until the shares vest, and compensation expense is based on the stock price of the shares at the time of grant. The Company also has an Employee Stock Purchase Plan, adopted in 2019, which became effective as of January 1, 2020. The Company follows FASB ASC Topic 718, “ Compensation – Stock Compensation The Company uses the Black-Scholes option pricing model to value stock options which requires extensive use of accounting judgment and financial estimates, including estimates of the expected term participants will retain their vested stock options before exercising them, the estimated volatility of its common stock price over the expected term, the risk free rate, expected dividend yield, and the number of options that will be forfeited prior to the completion of their vesting requirements. The fair value of restricted stock is determined based on the stock price of the underlying option on the date of the grant. From time to time, the Company may grant performance based restricted stock awards, based on the achievement of certain performance targets. Compensation cost for performance based restricted stock awards requires significant judgment regarding probability of achieving the performance objectives and compensation cost is adjusted for the probability of achieving these objectives. As a result, compensation cost could vary significantly during the performance measurement period. Compensation cost for stock purchase rights under the employee stock purchase plan is measured and recognized on the date the Company becomes obligated to issue shares of the Company’s common stock and is based on the difference between the fair value of the Company’s common stock and the purchase price on such date. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the Consolidated Statements of Operations. (r) Fair Value Measurements The Company follows the provisions of FASB ASC Topic 820, “ Fair Value Measurement and Disclosures
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 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 funds are included in cash and cash equivalents in the accompanying balance sheet are considered a Level 1 measurement as they are valued at quoted market prices in active markets. The convertible debentures are recorded as a separate component of the Company’s consolidated balance sheets are considered a Level 3 measurement due to the utilization of significant unobservable inputs in their valuation. See Note 3( c ) below 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 is a roll forward of the Company’s Level 3 instruments for the years ended December 31, 2020 and 2019, see Note 3 ( c ) convertible debentures
Items Measured at Fair Value on a Nonrecurring Basis Certain assets, including long-lived assets and goodwill, are measured at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be impaired. There were no items measured at fair value on a nonrecurring basis as of or during the years ended December 31, 2020 and 2019. (t) Recently Issued and Recently Adopted Accounting Standards 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. On January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)” and all the related amendments, which are codified under ASC 842. The Company has applied its transition provisions at the beginning of the period of adoption (i.e., on the effective date), and so did not restate comparative periods. Under this transition provision, the Company has applied the legacy guidance under ASC 840, “ Leases 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-looking information 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. This update will not make a material difference to the Company’s financial statements. 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. In August 2020, the FASB issued ASU 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 was issued to simplify the accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for the fiscal year and interim periods therein beginning January 1, 2022. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2020-06 will have on its consolidated financial statements. (u) Subsequent Events On March 2, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Guggenheim Securities, LLC, as representative of the several underwriters (the “Underwriters”), in connection with an underwritten public offering of 1,393,738 shares of the Company’s common stock, at a public offering price of $18.00 per share (the “Offering”). The Underwriting Agreement contains customary representations, warranties and covenants by the Company, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. In exchange for the Underwriters’ services, the Company agreed to sell the shares to the Underwriters at a purchase price of $16.92 per share and to reimburse the representative of the Underwriters for up to $125,000 of its expenses in connection with the Offering. The Offering closed March 5, 2021. The net proceeds to the Company from the Offering were approximately $23.2 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. On March 2, 2021, the Company terminated its
at-the-market |
Sale of MRI Assets |
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Dec. 31, 2020 | |||
Discontinued Operations and Disposal Groups [Abstract] | |||
Sale of MRI Assets |
In December 2016, the Company entered into an Asset Purchase Agreement with Invivo Corporation (“Invivo”). In accordance with the 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, 2017 less a holdback reserve of $350,000 for a net of approximately $2.9 million. The holdback reserve of $350,000 has been recorded as an asset in other assets and will be paid to the Company upon resolution of the litigation matter described in Note 9(f), less amounts, if any, due and payable or reserved under the indemnification provisions in the Asset Purchase agreement. |
Financing Arrangements |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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 December 31, 2020. 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 March 1, 2022, 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 is defined in the Loan Agreement as the greater of 4.25% or the Prime Rate published in the Money Rates section of the Western Edition of the Wall Street Journal. The Prime Rate as of December 31, 2020 was 3.25%. 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) a prepayment fee (3% of the principal balance if prepaid 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. 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 deducted 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 and there was no outstanding amount as of December 31, 2020.
(b) Loan and Security Agreement – Silicon Valley Bank On August 7, 2017, the Company entered into a Loan and Security Agreement, which was 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, the $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 its 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 $697,000. 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 stock 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 simulation model that were utilized to estimate the fair value of the Convertible Debentures at each valuation date included:
The Company’s stock price is based on the closing stock price on the valuation date. The conversion price is 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. 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 comparable guideline 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 one 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 is 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 and February 21, 2020 valuation dates was solved for utilizing the simulation model based on the principal value of the Convertible Debentures, as the transaction was determined to represent an ‘arm’s length’ transaction. The effective discount was corroborated against market yield data which implied the Company’s credit rating, and this implied credit rating will be utilized to determine the changes in the effective discount rate at future valuation dates. 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 the period ending December 31, 2019 through the conversion date of February 21, 2020, compared to $6.7 million in the period ending December 31, 2019, 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 Expense Payments Related to Financing Arrangements Future principal and interest payments related to the Loan Agreement are as follows (in thousands):
The following amounts are included in interest expense in the Company’s consolidated statements of operations for the years ended December 31, 2020, 2019 and 2018 (in thousands):
Cash interest expense, notes payable, represents the cash interest paid monthly related to the Loan Agreement. Cash interest expense, convertible debentures represents cash interest paid or accrued in connection with the Convertible Debentures issued in December 2018. The amortization of debt costs represents the closing costs incurred with the Term Loan and the SVB Loan Agreement, which have been capitalized and expensed using the effective interest method. |
Accrued and Other Expenses |
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Accrued and Other Expenses |
Accrued and other expenses consist of the following at December 31 (in thousands):
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Leases |
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Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases |
Under 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 or financing. 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 used its incremental borrowing rate to determine the present value of the lease payments. The Company determined the incremental borrowing rates for its leases by applying its applicable, fully collateralized borrowing rate, with adjustment as appropriate for 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 considered a number of factors when evaluating whether the options in its lease contracts were 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 assets and obligations for short-term leases (leases with an initial term of 12 months or less) are not recognized in the consolidated balance sheet. Lease expense for short-term leases is recognized on a straight-line basis over the lease term. The Company does not sublease any of its leased assets to third parties. The Company’s lease agreements do not contain any residual value guarantees or restrictive covenants. The Company has lessor agreements that contain lease and non-lease components. As the Company has determined that the non-lease component of these agreements is the predominant component, the Company is accounting for the complete agreement under ASC 606 upon adoption of ASC 842 (see discussion in Note 1(j)). 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 three lease modifications which are reflected in the table below showing the maturity of the Company’s lease liabilities as of December 31, 2020. This includes an extension of operating leases for the two facilities leased by the Company in New Hampshire and the facility lease in California. In addition, there were no impairment indicators identified during the year ended December 31, 2020 that required an impairment test for the Company’s right-of-use assets or other long-lived assets in accordance with ASC 360-10. 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 the accounting for lease components and non-lease components for real estate and equipment leases. 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 three months as of December 31, 2020. The components of lease expense for the period are as follows (in thousands):
Maturities of the Company’s lease liabilities as of December 31, 2020 was as follows (in thousands):
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Stockholders' Equity |
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Federal Home Loan Banks [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders' Equity |
(a) Financing Activity On April 27, 2020, the Company issued 1,562,500 shares of common stock to several institutional investors at a price of $8.00 per share in a registered direct offering. The gross proceeds of the offering were approximately $12.5 million, and the Company received net proceeds of approximately $12.3 million. The Company also entered into an at-the-market (b) Stock Options The Company has two The 2012 Stock Incentive Plan (the “2012 Plan”). The 2012 Plan was adopted by the Company’s stockholders in May 2012 and amended in May 2014. The 2012 Plan, as amended, provides for the grant of any or all of the following types of awards: (a) stock options, (b) restricted stock, (c) deferred stock and (d) other stock-based awards. Awards may be granted singly, in combination, or in tandem. Subject to anti-dilution adjustments as provided in the amended 2012 Plan, (i) the amended 2012 Plan provides for a total of 1,600,000 shares of the Company’s common stock to be available for distribution pursuant to the amended 2012 Plan, and (ii) the maximum number of shares of the Company’s common stock with respect to which stock options, restricted stock, deferred stock, or other stock-based awards may be granted to any participant under the amended 2012 Plan during any calendar year or part of a year may not exceed 250,000 shares. The 2012 Plan provides that it will be administered by the Company’s Board of Directors or a committee of two or more directors appointed by the Board of Directors. The administrator will generally have the authority to administer the 2012 Plan, determine participants who will be granted awards under the 2012 Plan, the size and types of awards, the terms and conditions of awards and the form and content of the award agreements representing awards. With respect to options granted under the 2012 Plan, the exercise price must be at least 100% (110% in the case of an incentive stock option granted to a 10% stockholder) of the fair market value of the common stock subject to the award, determined as of the date of grant. Restricted stock awards are shares of common stock that are awarded subject to the satisfaction of the terms and conditions established by the administrator. In general, awards that do not require exercise may be made in exchange for such lawful consideration, including services, as determined by the administrator. At December 31, 2020, there were 129,126 shares available for issuance under the 2012 Plan. The 2016 Stock Incentive Plan (the “2016 Plan”). The 2016 Plan was adopted by the Company’s stockholders in May 2016 and amended in November 2018. The 2016 Plan provides for the grant of any or all of the following types of awards: (a) non-qualified stock options and incentive stock options, (b) stock appreciation rights, (c) restricted stock awards and restricted stock units, (d) unrestricted stock awards, (e) cash-based awards, (f) performance share awards and (g) dividend equivalent rights. Subject to anti-dilution adjustments as provided in the 2016 Plan, (i) the amended 2016 Plan provides for a total of 2,600,000 shares of the Company’s common stock to be available for distribution pursuant to the 2016 Plan, and (ii) the maximum number of shares of the Company’s common stock with respect to which stock options or stock appreciation rights may be granted to any one individual under the 2016 Plan during any one calendar year period may not exceed 1,000,000 shares. No more than 1,000,000 shares of common stock may be issued in the form of incentive stock options and no more than 120,000 shares of stock may be issued pursuant to awards to non-employee directors. The 2016 Plan provides that it will be administered by the Company’s Compensation Committee. The Compensation Committee has the authority to administer the 2016 Plan, determine participants, from among the individuals eligible for awards, who will be granted awards under the 2016 Plan, make any combination of awards to participants and determine the specific terms and conditions of awards subject to the 2016 Plan. Awards under the 2016 Plan may be granted to full or part-time officers, employees, non-employee directors and other key persons (including consultants) of the Company and its subsidiaries. With respect to stock options granted under the 2016 Plan, the exercise price will be determined by the Compensation Committee but may not be less than 100% of the fair market value of the common stock subject to the award, determined as of the date of grant. Regarding incentive stock options, including that the aggregate grant date fair market value of the shares of stock with respect to which incentive stock options granted under the 2016 Plan and any other plan of the Company or its parent and subsidiary corporations become exercisable for the first time by an optionee during any calendar year shall not exceed $100,000. To the extent that any incentive stock option exceeds this limit, it shall constitute a non-qualified stock option. Restricted stock awards are shares of common stock that are awarded subject to the satisfaction of the terms and conditions established by the Compensation Committee. In general, awards that do not require exercise may be made in exchange for such lawful consideration, including services, as determined by the Compensation Committee. At December 31, 2020, there were 333,091 shares available for issuance under the 2016 Plan. A summary of stock option activity for all stock option plans is as follows:
There were 462,218 shares available for future grants from all plans at December 31, 2020. The Company’s stock-based compensation expense, including options and restricted stock by category is as follows (amounts in thousands):
As of December 31, 2020, there was $0.7 million of total unrecognized compensation costs related to unvested options and restricted stock. That cost is expected to be recognized over a weighted average period of 1.0 years. Options granted under the stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:
The Company’s 2020, 2019 and 2018 average expected volatility and average expected life is based on the average of the Company’s historical information. The risk-free rate is based on the rate of U.S. Treasury zero-coupon issues with a remaining term equal to the expected life of option grants. The Company has paid noIntrinsic values of options (in thousands) and the closing market price used to determine the intrinsic values are as follows: Intrinsic value of stock options
(c) Restricted Stock 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 grant date. The Company did not grant any restricted stock units in 2020. The Company granted 15,990 shares with time-based vesting during the year ended December 31, 2019. The Company granted 334,083 shares with time-based vesting and 45,356 shares with immediate vesting during the year ended December 31, 2018. A summary of restricted stock activity for all equity incentive plans is as follows:
Intrinsic values of restricted stock (in thousands) and the closing market price used to determine the intrinsic values are as follows:
(d) Employee Stock Purchase Program: In December 2019, the Company’s Board of Directors adopted, and the stockholders approved the 2019 Employee Stock Purchase Plan (“ESPP”), effective January 1, 2020. The ESPP provides for the issuance of up 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 of Directors 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 purchase shares under the ESPP. Any eligible employee can enroll in the Plan 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 42,606 shares under the ESPP as of December 31, 2020. |
Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes |
The components of income tax expense for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):
A summary of the differences between the Company’s effective income tax rate and the Federal statutory income tax rate for the years ended December 31, 2020, 2019 and 2018 is as follows:
Deferred tax assets and liabilities are recognized for the expected future tax consequences of net operating loss carryforwards, tax credit carryforwards and temporary differences between the financial statement carrying amounts and the income tax basis of assets and liabilities. A valuation allowance is applied against any net deferred tax asset if, based on the available evidence, it is more likely than not that the deferred tax assets will not be realized. Deferred income taxes reflect the impact of “temporary differences” between the amount of assets and liabilities for financial reporting purposes and such amounts as measured by tax laws and regulations. The Company has fully reserved the net deferred tax assets, as it is more likely than not that the deferred tax assets will not be utilized. Deferred tax assets (liabilities) are composed of the following at December 31, 2020 and 2019 (in thousands):
The increase in the net deferred tax assets and corresponding valuation allowance during the year ended December 31, 2020 and December 31, 2019 is primarily attributable to additional accruals, net operating losses, and research and development credits. As of December 31, 2020, the Company has federal net operating loss carryforwards totaling approximately $149.1 million. Federal net operating loss carryforwards totaling $122.1 million will expire at various dates from 2021 and 2037. The remaining $27.0 million of the federal net operating losses generated since December 31, 2017 can be carried forward indefinitely. As of December 31, 2020, the Company has provided a valuation allowance for its net operating loss carryforwards due to the uncertainty of the Company’s ability to generate sufficient taxable income in future years to obtain the benefit from the utilization of the net operating loss carryforwards. In the event of a deemed change in control, an annual limitation imposed on the utilization of the net operating losses may result in the expiration of all or a portion of the net operating loss carryforwards. There were no n The Company currently has approximately $6.6 million in net operating losses that are subject to limitations related to Xoft. Approximately $656,000 can be used annually through 2029. The Company has available tax credit carryforwards (adjusted to reflect provisions of the Tax Reform Act of 1986) to offset future income tax liabilities totaling approximately $3.9 million. The credits expire in various years through 2039. The Company has additional tax credits of $1.8 million related to Xoft which have been fully reserved for and as a result no deferred tax asset has been recorded. These credits expire in various years through 2030. ASC 740-10 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. As of December 31, 2020 and 2019, the Company had no unrecognized tax benefits and no adjustments to liabilities or operations were required under ASC 740-10. The Company’s practice is to recognize interest and penalty expenses related to uncertain tax positions in income tax expense, which was zero for the years ended December 31, 2020, 2019 and 2018. The Company files United States federal and various state income tax returns. The Company will also file a tax return in France. Generally, the Company’s preceding tax years remain subject to examination by federal and state tax authorities. The Company is not under examination by any other federal or state jurisdiction for any tax year. The Company does not anticipate that it is reasonably possible that unrecognized tax benefits as of December 31, 2020 will significantly change within the next 12 months. |
Segment Reporting, Geographical Information and Major Customers |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting, Geographical Information and Major Customers |
(a) Segment Reporting In accordance with FASB Topic ASC 280, Segments, 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 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, and related services. The primary factors used by the Company’s CODM to allocate resources are based on revenues, gross profit, operating income or loss, 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 its assets by operating segment and its 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 GAAP loss before income tax is as follows (in thousands):
Segment depreciation and amortization included in segment operating income (loss) is as follows (in thousands):
(b) Geographic Information The Company’s sales are made to customers, distributors and dealers of mammography, electronic brachytherapy equipment and other medical equipment, and to foreign distributors of mammography and electronic brachytherapy equipment. Export sales to a single country did not exceed 10% of total revenue in any year. Total export sales were approximately $6.1 million or 20% of total revenue in 2020, $3.8 million or 12% of total revenue in 2019 and $3.2 million or 12% of total revenue in 2018. As of December 31, 2020 and 2019, the Company had outstanding receivables of $3.4 million and $2.1 million, respectively, from distributors and customers of its products who are located outside of the U.S.
Significant export sales in Europe are as follows:
(c) Major Customers The Company had one OEM partners represented $4.4 million or 44% of outstanding receivables as of December 31, 2020, with GE Healthcare accounting for $1.5 million or 34% of this amount. The four largest Therapy customers composed $1.7 million or 17% of outstanding receivables as of December 31, 2020. The largest Detection direct customer represents $1.1 million or 11% of outstanding receivables as of December 31, 2020. These twenty-one customers in total represented $7.1 million or 72% of outstanding receivables as of December 31, 2020. |
Commitments and Contingencies |
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Dec. 31, 2020 | |||
Commitments and Contingencies Disclosure [Abstract] | |||
Commitments and Contingencies |
(a) Other Commitments The Company has non-cancelable purchase orders with key suppliers executed in the normal course of business that total approximately $3.4 million. In connection with the Company’s employee savings plans, the matching contribution for 2020 was approximately $0.5 million in cash. The matching contribution for 2021 is estimated to be approximately $0.5 million in cash. (b) Employment Agreements The Company has entered into employment agreements with certain key current and former executives. The employment agreements provide for minimum annual salaries and performance-based annual bonus compensation as defined in their respective agreements. In addition, the employment agreements provide that if employment is terminated without cause, the executive will receive an amount equal to their respective base salary then in effect for (i) fifteen months from the date of termination, for Mr. Klein, (ii) eighteen months from the date of termination, for Ms. Stevens, and (iii) twenty-four months from the date of termination, for Mr. Ferry, and in each case, plus the pro rata portion of any annual bonus earned in any employment year through the date of termination. On November 8, 2018, Mr. Ferry retired as Chief Executive Officer of the Company and from his position as Chairman of the Board of Directors. Mr. Ferry and the Company entered into a Separation Agreement on that date, pursuant to which Mr. Ferry will generally receive the payments that would have been payable had he been terminated by the Company without cause. The Company accrued $1,009,000 representing 24 months of severance and 18 months of health benefits as of November 2018 upon Mr. Ferry’s agreeing to the Separation Agreement, which the Company began paying monthly in May 2019 and has completed all payments as of December 31, 2020. (c) Royalty Obligations In connection with prior litigation, the Company received a nonexclusive, irrevocable, perpetual, worldwide license, including the right to sublicense certain Hologic patents, and a non-compete covenant as well as an agreement not to seek further damages with respect to the alleged patent violations. In return, the Company had a remaining obligation to pay a minimum annual royalty payment of $250,000 payable through 2016. In addition to the minimum annual royalty payments, the litigation settlement agreement with Hologic also provides for payment of royalties if such royalties exceed the minimum payment based upon a specified percentage of future net sales on any products that practice the licensed rights. The estimated fair value of the patent license and non-compete covenant is $100,000 and was amortized over the useful life of approximately four years. In addition, a liability has been recorded within accrued expenses and accounts payable for future payment and for minimum royalty obligations totaling $0.4 million. (d) Litigation 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 of which the ultimate resolution would have a material adverse effect on its financial condition or results of operations. However, should the Company fail to prevail in any legal matter or should several legal matters be resolved against us 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. 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. In December 2016, the Company entered into an Asset Purchase Agreement with Invivo Corporation. In accordance with the 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, 2017 less a holdback reserve of $350,000 for a net of approximately $2.9 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, |
Summary of Significant Accounting Policies (Policies) |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nature Of Operations And Use Of Estimates | (a) Nature of Operations and Use of Estimates iCAD, Inc. and subsidiaries (the “Company” or “iCAD”) is a global medical technology company providing innovative cancer detection and therapy solutions The Company has grown primarily through acquisitions to become a broad player in the cancer detection and therapy market. Its solutions include advanced artificial intelligence and image analysis workflow solutions that enable healthcare professionals to better serve patients by identifying pathologies and pinpointing the most prevalent cancers earlier, a comprehensive range of high-performance, upgradeable Computer-Aided Detection (“CAD”) systems and workflow solutions for digital breast tomosynthesis (“DBT”), full-field digital mammography (“FFDM”), MRI and CT, and the Xoft System which is an isotope-free cancer treatment platform technology. CAD is reimbursable in the U.S. under federal and most third-party insurance programs. The Company intends to continue the extension of its image analysis and clinical decision support solutions for DBT, FFDM, MRI and CT imaging. iCAD believes that advances in digital imaging techniques should bolster its efforts to develop additional commercially viable CAD/advanced image analysis and workflow products. The Company’s management believes that early detection in combination with earlier targeted intervention will provide patients and care providers with the best tools available to achieve better clinical outcomes resulting in a market demand that will drive top line growth. The Company’s headquarters are located in Nashua, New Hampshire, with a manufacturing facility in New Hampshire and an operations, research, development, manufacturing and warehousing facility in San Jose, California. The Company operates in two segments: Cancer Detection (“Detection”) and Cancer Therapy (“Therapy”). The Detection segment consists of advanced image analysis and workflow products, and the Therapy segment consists of radiation therapy products. The Company sells its products throughout the world through its direct sales organization as well as through various OEM partners, distributors and resellers. See Note 8 for segment, major customer and geographical information. The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. It is reasonably possible that changes may occur in the near term that would affect management’s estimates with respect to assets and liabilities. |
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Risk and Uncertainty | (b) Risk and Uncertainty On March 12, 2020, the Wor l d 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 and social distancing orders as well as uncertainty in the market. Significant uncertainty remains as to the continuing impact of the 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 Company’s results for the year ending December 31, 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. 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 year ended December 31, 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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Principles of Consolidation | ( c ) Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries: Xoft, Inc. and Xoft Solutions, LLC. All material inter-company transactions and balances have been eliminated in consolidation. |
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Cash and cash equivalents | ( d ) Cash and cash equivalents The Company defines cash and cash equivalents as all bank accounts, money market funds, deposits and other money market instruments with original maturities of 90 days or less, which are unrestricted as to withdrawal. Cash and cash equivalents are maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to these balances. Insurance coverage is $250,000 per depositor at each financial institution, and the Company’s
non-interest bearing cash balances exceed federally insured limits. Interest-bearing amounts on deposit in excess of federally insured limits at December 31, 2020 approximated $26.7 million. |
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Financial instruments | ( e ) Financial instruments Financial instruments consist of cash and cash equivalents, accounts receivable, contract assets, accounts payable, 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, approximated fair value as of December 31, 2020 and 2019. The Company has elected to record the convertible debentures at fair value at each reporting date in accordance with the fair value option election. See Note 3( c ) for further details. |
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Accounts Receivable and Allowance for Doubtful Accounts | ( f ) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are customer obligations due under normal trade terms. Credit limits are established through a process of reviewing the financial history and stability of each customer. The Company performs continuing credit evaluations of its customers’ financial condition and generally does not require collateral. The Company’s policy is to maintain allowances for estimated losses from the inability of its customers to make required payments. The Company’s senior management reviews accounts receivable on a periodic basis to determine if any receivables may potentially be uncollectible. The Company includes any accounts receivable balances that it determines may likely be uncollectible, along with a general reserve for estimated probable losses based on historical experience, in its overall allowance for doubtful accounts. An amount would be written off against the allowance after all attempts to collect the receivable had failed. Based on the information available, the Company believes the allowance for doubtful accounts as of December 31, 2020 and 2019 is adequate. The following table summarizes the allowance for doubtful accounts for the three years ended December 31, 2020 (in thousands):
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Inventory | ( g ) 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. At December 31, 2020 and 2019, inventories consisted of the following (in thousands), which includes an inventory reserve of approximately $0.2 million and $0.5 million as December 31, 2020 and 2019, respectively. Inventory balances, net of reserves, were as follows:
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Property and Equipment | ( h ) Property and Equipment Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets or the remaining lease term, if shorter, for leasehold improvements (see below).
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Goodwill | ( i ) Goodwill In accordance with FASB Accounting Standards Codification (“ASC”) Topic 350-20, “Intangibles—Goodwill and Other” 350-20”), 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 the carrying value of the reporting unit. Factors the Company considers important, which could trigger an impairment of such asset, include the following:
The Company records an impairment charge when such assessment indicates that the fair value of a reporting unit was 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 value of reporting units based on the present value of estimated future cash flows, discounted at an appropriate risk adjusted rate. This approach was selected as it measures the income producing assets, primarily technology and customer relationships. This method estimates the fair value based upon the ability to generate future cash flows, which is particularly applicable when future profit margins and growth are expected to vary significantly from historical operating results. The Company uses internal forecasts to estimate future cash flows and includes an estimate of long-term future growth rates based on the most recent views of the long-term forecast for the reporting unit. Accordingly, actual results can differ from those assumed in the forecasts. Discount rates are derived from a capital asset pricing model and analyzing published rates for industries relevant to the reporting unit 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 and in the internally developed forecasts. Other significant assumptions include terminal value margin rates, future capital expenditures, and changes in future working capital requirements. While there are inherent uncertainties related to the assumptions used and to the application of these assumptions to this analysis, the income approach provides a reasonable estimate of the fair value of the Therapy reporting unit. The Company performed the annual impairment assessments at October 1, 2020 and 2019, respectively, and compared the fair value of each reporting unit to its carrying value as of each date. The fair value exceeded the carrying value for the Detection reporting unit as of each date of these impairment assessments. Goodwill for the Therapy reporting unit was fully impaired as of December 31, 2017. As such, the Company did not record any impairment charges for the years ended December 31, 2020 or 2019. The carrying values of the reporting units were determined based on an allocation of the Company’s assets and liabilities through specific allocation of certain assets and liabilities, to the reporting units and an apportionment of the remaining net assets based on the relative size of the reporting units’ revenues and operating expenses compared to the Company as a whole. The determination of reporting units also requires management judgment. 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 the Company’s 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 and in its 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 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 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 value. 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. A rollforward of goodwill activity by reportable segment is as follows (in thousands):
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Long Lived Assets | ( j ) Long Lived Assets In accordance with FASB ASC Topic 360, “ Property, Plant and Equipment ASC 360-10-35 360-10-35-21,
In accordance with ASC 360-10-35-17, Undiscounted cash flows exceeded the carrying value of the asset group and that long-lived assets were not impaired. The Company did not record any impairment charges related to long lived assets for the years ended December 31, 2020 or 2019. A considerable amount of judgment and assumptions are required in performing the impairment tests, principally in determining the fair value of the asset group. While the Company believes the 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. Intangible assets subject to amortization consist primarily of patents, technology, customer relationships and trade names purchased in the Company’s previous acquisitions. These assets, which include assets from the acquisition of the assets of VuComp, DermEbx and Radion and the acquisition of Xoft, Inc., are amortized on a straight-line basis consistent with the pattern of economic benefit over their estimated useful lives of 5 to 10 years. A summary of intangible assets for 2020 and 2019 is as follows (in thousands):
Amortization expense related to intangible assets was approximately $309,000, $377,000 and $383,000 for the years ended December 31, 2020, 2019, and 2018, respectively. Estimated remaining amortization of the Company’s intangible assets is as follows (in thousands):
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Revenue Recognition | ( k ) Revenue Recognition On January 1, 2018, the Company adopted FASB ASC Topic 606, “Revenue from Contracts with Customers” and all the related amendments (“Topic 606”), using the modified retrospective method for all contracts not completed as of the date of adoption. For contracts that were modified before the effective date, the Company reflected the aggregate effect of all modifications when identifying performance obligations and allocating transaction price in accordance with practical expedient ASC 606-10-65-1-(f)-4, The Company recorded a net increase to opening retained earnings of $0.1 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606, with the impact primarily related to the deferral of commissions on the Company’s long-term service arrangements and warranty periods greater than one year, which previously were expensed as incurred but, under the amendments to ASC 340-40, are now generally capitalized and amortized over the period of contract performance or a longer period if renewals are expected and the renewal commission is not commensurate with the initial commission. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to 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. To achieve this core principle, the Company applies the following five steps:
The Company recognizes revenue from its contracts with customers primarily from the sale of products and from the sale of services and supplies. Under Topic 606, revenue is recognized when control of the promised goods or services is transferred to a customer, in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services. For product revenue, control has transferred upon shipment provided title and risk of loss have passed to the customer. Services and supplies are considered to be transferred as the services are performed or over the term of the service or supply agreement. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations. The Company’s hardware is generally highly dependent on, and interrelated with, the underlying software and the software is considered essential to the functionality of the product. In these cases, the hardware and software license are accounted for as a single performance obligation and revenue is recognized at the point in time when ownership is transferred to the customer. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by the Company from a customer, are excluded from revenue. Shipping and handling costs associated with outbound freight after control of a product has transferred to a customer are accounted for as fulfillment costs and are included in cost of revenue. The Company continues to provide for estimated warranty costs on original product warranties at the time of sale. 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 Upon the adoption of ASC 842, effective January 1, 2019, the lease components of certain fixed fee service contracts are no longer being separately accounted for under the lease guidance, and the entire contract is being accounted for under ASC 606. Upon the adoption of ASC 606, effective January 1, 2018, and until the adoption of ASC 842 referred to above, these lease components were accounted for as a lease in accordance with ASC 840, “ Leases non-lease components, such as service contracts, was recognized on a straight-line basis over the term of the agreements. Supply and Source Usage Agreements Professional Services Other Significant Judgments The Company’s contracts with customers may include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. For arrangements with multiple performance obligations, the Company allocates revenue to each performance obligation based on its relative standalone selling price. Judgment is required to determine the standalone selling price for each distinct performance obligation. The Company generally determines standalone selling prices based on the prices charged to customers and uses a range of amounts to estimate standalone selling prices when the Company sells each of the products and services separately and need to determine whether there is a discount that needs to be allocated based on the relative standalone selling prices of the various products and services. The Company typically has more than one range of standalone selling prices for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such as the type of customer and geographic region in determining the range of standalone selling prices. The Company may provide credits or incentives to customers, which are accounted for as variable consideration when estimating the transaction price of the contract and amounts of revenue to recognize. The amount of variable consideration to include in the transaction price is estimated at contract inception using either the estimated value method or the most likely amount method based on the nature of the variable consideration. These estimates are updated at the end of each reporting period as additional information becomes available and revenue is recognized only to the extent that it is probable that a significant reversal of any amounts of variable consideration included in the transaction price will not occur. The Company provides for estimated warranty costs on original product warranties at the time of sale. Contract Balances Contract liabilities are a component of deferred revenue, current contract assets are a component of prepaid and other assets and non-current contract assets are a component of other assets. The following table provides information about receivables, current and non-current contract assets, and contract liabilities from contracts with customers (in thousands). Contract balances
Timing of revenue recognition may differ from timing of invoicing to customers. The Company records a receivable when revenue is recognized prior to receipt of cash payments 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 records net contract assets or contract liabilities on a contract-by-contract non-current based on the expected timing of the Company’s right to bill under the terms of the contract. The current contract asset balance primarily relates to the net unbilled revenue balances with two significant customers, which the Company expects to be able to bill for within one year. The non-current contract asset balance consists of net unbilled revenue balances with one customer which the Company expects to be able to bill for in more than one year. Contract liabilities, or deferred revenue from contracts with customers, is primarily composed of fees related to long-term 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 the Company has been paid in advance and earn the revenue when it transfers control of the product or service. The balance of deferred revenue at December 31, 2020 and December 31, 2019 is as follows (in thousands):
Changes in deferred revenue from contracts with customers were as follows (in thousands):
The Company expects to recognize estimated revenues related to performance obligation that are unsatisfied (or partially satisfied) in the amounts of approximately $7.1 million in 2021, $1.2 million in 2022 and $1.0 million in each year from 2023-2025. Assets Recognized from the Costs to Obtain a Contract with a Customer The Company recognizes an asset for the incremental costs of obtaining a contract with a customer if it expects the benefit of those costs to be longer than one year. The Company has determined that certain commissions programs meet the requirements to be capitalized. As of December 31, 2020, the balance of capitalized costs to obtain a contract was $406,000 compared to $379,000 as of December 31, 2019. The Company has classified the capitalized costs to obtain a contract as a component of prepaid expenses and other current assets as of December 31, 2020 and 2019, respectively. Changes in the balance of capitalized costs to obtain a contract were as follows (in thousands):
Practical Expedients and Exemptions The Company has elected to make the following accounting policy elections through the adoption of the following practical expedients: Right to Invoice Where applicable, the Company will recognize revenue from a contract with a customer in an amount that corresponds directly with the value to the customer of the Company’s performance completed to date and the amount to which the entity has a right to invoice. Sales and Other Similar Taxes The Company will exclude sales taxes and similar taxes from the measurement of transaction price and will ensure that it complies with the disclosure requirements of ASC 235-10-50-1 50-6. Significant Financing Component The Company will not adjust the promised amount of consideration for the effects of a significant financing component if the Company expects, at contract inception, that the period between when the entity transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less. Cost to Obtain a Contract The Company will recognize the incremental costs of obtaining a contract as an expense when incurred if the amortization period of the asset that the Company otherwise would have recognized is one year or less and there are no renewal periods on which the Company does not pay commissions that are not commensurate with those originally paid. Promised Goods or Services that are Immaterial in the Context of a Contract The Company has elected to assess promised goods or services as performance obligations that are deemed to be immaterial in the context of a contract. As such, the Company will not aggregate and assess immaterial items at the entity level. That is, when determining whether a good or service is immaterial in the context of a contract, the assessment will be made based on the application of ASC 606 at the contract level. The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which it recognizes revenue at the amount to which it has the right to invoice for services performed. |
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Cost of Revenue | (k) Cost of Revenue Cost of revenue consists of the costs of products purchased for resale, cost relating to service including costs of service contracts to maintain equipment after the warranty period, inbound freight and duty, manufacturing, warehousing, material movement, inspection, scrap, rework, depreciation and
in-house product warranty repairs, amortization of acquired technology and medical device tax. |
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Warranty Costs | (l) Warranty Costs The Company provides for the estimated cost of standard product warranty against defects in material and workmanship based on historical warranty trends, including the cost of product returns during the warranty period. Warranty provisions and claims for the years ended December 31, 2020, 2019 and 2018, were as follows (in thousands):
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Engineering and Product Development Costs | (m) Engineering and Product Development Costs Engineering and product development costs relate to research and development efforts including Company sponsored clinical trials which are expensed as incurred. |
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Advertising Costs | (n) Advertising Costs The Company expenses advertising costs as incurred. Advertising expense for the years ended December 31, 2020, 2019 and 2018 was approximately $211,000, $1,084,000 and $811,000 respectively. |
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Net Loss per Common Share | (o) Net Loss per Common Share The Company follows FASB ASC 260-10, “Earnings per Share”, which requires the presentation of both basic and diluted earnings per share on the face of the statements of operations. 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 and, if there are dilutive securities, diluted income per share is computed by including common stock equivalents which includes shares issuable upon the exercise of stock options, net of shares assumed to have been purchased with the proceeds, using the treasury stock method. A summary of the Company’s calculation of net loss per share is as follows (in thousands, except per share amounts):
The following table summarizes the number of shares of common stock for convertible securities, warrants and restricted stock that were not included in the calculation of diluted net loss per share because such shares are antidilutive:
Restricted common stock can be issued to directors, executives or employees of the Company and are subject to time-based vesting. These potential shares were excluded from the computation of basic loss per share as these shares are not considered outstanding until vested. |
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Income Taxes | (p) Income Taxes The Company follows the liability method under ASC Topic 740 “ Income Taxes ASC
740-10 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC 740-10 also provides guidance on de-recognition, classification, interest and penalties, disclosure and transition. |
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Stock-Based Compensation | (q) Stock-Based Compensation The Company maintains stock-based incentive plans, under which it provides stock incentives to employees, directors and contractors. The Company may grant to employees, directors and contractors, options to purchase common stock at an exercise price equal to the market value of the stock at the date of grant. The Company may grant restricted stock to employees and directors. The underlying shares of the restricted stock grant are not issued until the shares vest, and compensation expense is based on the stock price of the shares at the time of grant. The Company also has an Employee Stock Purchase Plan, adopted in 2019, which became effective as of January 1, 2020. The Company follows FASB ASC Topic 718, “ Compensation – Stock Compensation The Company uses the Black-Scholes option pricing model to value stock options which requires extensive use of accounting judgment and financial estimates, including estimates of the expected term participants will retain their vested stock options before exercising them, the estimated volatility of its common stock price over the expected term, the risk free rate, expected dividend yield, and the number of options that will be forfeited prior to the completion of their vesting requirements. The fair value of restricted stock is determined based on the stock price of the underlying option on the date of the grant. From time to time, the Company may grant performance based restricted stock awards, based on the achievement of certain performance targets. Compensation cost for performance based restricted stock awards requires significant judgment regarding probability of achieving the performance objectives and compensation cost is adjusted for the probability of achieving these objectives. As a result, compensation cost could vary significantly during the performance measurement period. Compensation cost for stock purchase rights under the employee stock purchase plan is measured and recognized on the date the Company becomes obligated to issue shares of the Company’s common stock and is based on the difference between the fair value of the Company’s common stock and the purchase price on such date. Application of alternative assumptions could produce significantly different estimates of the fair value of stock-based compensation and consequently, the related amounts recognized in the Consolidated Statements of Operations. |
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Fair Value Measurements | (r) Fair Value Measurements The Company follows the provisions of FASB ASC Topic 820, “ Fair Value Measurement and Disclosures
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 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 funds are included in cash and cash equivalents in the accompanying balance sheet are considered a Level 1 measurement as they are valued at quoted market prices in active markets. The convertible debentures are recorded as a separate component of the Company’s consolidated balance sheets are considered a Level 3 measurement due to the utilization of significant unobservable inputs in their valuation. See Note 3( c ) below 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 is a roll forward of the Company’s Level 3 instruments for the years ended December 31, 2020 and 2019, see Note 3 ( c ) convertible debentures
Items Measured at Fair Value on a Nonrecurring Basis Certain assets, including long-lived assets and goodwill, are measured at fair value on a nonrecurring basis. These assets are recognized at fair value when they are deemed to be impaired. There were no items measured at fair value on a nonrecurring basis as of or during the years ended December 31, 2020 and 2019. |
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Recently Issued and Recently Adopted Accounting Standards | (t) Recently Issued and Recently Adopted Accounting Standards 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. On January 1, 2019, the Company adopted ASU 2016-02, “Leases (Topic 842)” and all the related amendments, which are codified under ASC 842. The Company has applied its transition provisions at the beginning of the period of adoption (i.e., on the effective date), and so did not restate comparative periods. Under this transition provision, the Company has applied the legacy guidance under ASC 840, “ Leases 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-looking information 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. This update will not make a material difference to the Company’s financial statements. 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. In August 2020, the FASB issued ASU
2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU 2020-06”). ASU 2020-06 was issued to simplify the accounting for convertible instruments by removing major separation models required under current U.S. GAAP. Consequently, more convertible debt instruments will be reported as a single liability instrument and more convertible preferred stock as a single equity instrument with no separate accounting for embedded conversion features. ASU 2020-06 removes certain settlement conditions that are required for equity contracts to qualify for the derivative scope exception, which will permit more equity contracts to qualify for it. ASU 2020-06 also simplifies the diluted earnings per share calculation in certain areas. ASU 2020-06 is effective for the Company for the fiscal year and interim periods therein beginning January 1, 2022. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of ASU 2020-06 will have on its consolidated financial statements. |
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Subsequent Events | (u) Subsequent Events On March 2, 2021, the Company entered into an underwriting agreement (the “Underwriting Agreement”) with Guggenheim Securities, LLC, as representative of the several underwriters (the “Underwriters”), in connection with an underwritten public offering of 1,393,738 shares of the Company’s common stock, at a public offering price of $18.00 per share (the “Offering”). The Underwriting Agreement contains customary representations, warranties and covenants by the Company, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act, other obligations of the parties and termination provisions. In exchange for the Underwriters’ services, the Company agreed to sell the shares to the Underwriters at a purchase price of $16.92 per share and to reimburse the representative of the Underwriters for up to $125,000 of its expenses in connection with the Offering. The Offering closed March 5, 2021. The net proceeds to the Company from the Offering were approximately $23.2 million, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. On March 2, 2021, the Company terminated its
at-the-market |
Summary of Significant Accounting Policies (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Schedule of Allowance for Doubtful Accounts | The following table summarizes the allowance for doubtful accounts for the three years ended December 31, 2020 (in thousands):
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Schedule of Current Inventory | At December 31, 2020 and 2019, inventories consisted of the following (in thousands), which includes an inventory reserve of approximately $0.2 million and $0.5 million as December 31, 2020 and 2019, respectively.
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Schedule of Property and Equipment Estimated Useful Lives | Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the assets or the remaining lease term, if shorter, for leasehold improvements (see below).
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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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Schedule of Intangible Assets | A summary of intangible assets for 2020 and 2019 is as follows (in thousands):
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Schedule of Expected Amortization Expense | Estimated remaining amortization of the Company’s intangible assets is as follows (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, current and non-current 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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Schedule of Changes of Capitalized Costs to Obtain Contract | Changes in the balance of capitalized costs to obtain a contract were as follows (in thousands):
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Roll forward of Warranty Cost | Warranty provisions and claims for the years ended December 31, 2020, 2019 and 2018, were as follows (in thousands):
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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 following table summarizes the number of shares of common stock for convertible securities, warrants and restricted stock that were not included in the calculation of diluted net loss per share because such shares are antidilutive:
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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 Rollforward of the Company's Level 3 Instruments | The following is a roll forward of the Company’s Level 3 instruments for the years ended December 31, 2020 and 2019, see Note 3 ( c ) convertible debentures
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Accounting Standards Update 2016-02 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Changes in Deferred Revenue | The balance of deferred revenue at December 31, 2020 and December 31, 2019 is as follows (in thousands):
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Accounting Standards Update 2014-09 [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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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Financing Arrangements (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Value of Term Loan Net of Debt Issuance Costs | The maturity date of the revolving loan is March 30, 2022 and there was no outstanding amount as of December 31, 2020.
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Schedule of Key Inputs to Simulation Model Utilized to Estimate Fair Value of Convertible Debentures | The Company notes that the key inputs to the simulation model that were utilized to estimate the fair value of the Convertible Debentures at each valuation date 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 and interest payments 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 statements of operations for the years ended December 31, 2020, 2019 and 2018 (in thousands):
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Accrued and Other Expenses (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued and Other Expenses | Accrued and other expenses consist of the following at December 31 (in thousands):
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Leases (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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):
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Summary of Detained Information of Lease Liabilities | Maturities of the Company’s lease liabilities as of December 31, 2020 was as follows (in thousands):
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Stockholders' Equity (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Federal Home Loan Banks [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Stock Option Activity for all Stock Option Plans | A summary of stock option activity for all stock option plans is as follows:
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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 (amounts in thousands):
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Options Granted under Company's Stock Incentive Plans, Valuation Assumptions and Fair Values | Options granted under the stock incentive plans were valued utilizing the Black-Scholes model using the following assumptions and had the following fair values:
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Summary Of Intrinsic Values Of Option And Closing Market Price | Intrinsic values of options (in thousands) and the closing market price used to determine the intrinsic values are as follows: Intrinsic value of stock options
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Summary of Restricted Stock Activity for All Equity Incentive Plans | A summary of restricted stock activity for all equity incentive plans is as follows:
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Summary of Intrinsic Values of Restricted Stock and Closing Market Price | Intrinsic values of restricted stock (in thousands) and the closing market price used to determine the intrinsic values are as follows:
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Tax Expense | The components of income tax expense for the years ended December 31, 2020, 2019 and 2018 are as follows (in thousands):
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Summary of Effective and the Federal Statutory Income Tax Rate | A summary of the differences between the Company’s effective income tax rate and the Federal statutory income tax rate for the years ended December 31, 2020, 2019 and 2018 is as follows:
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Deferred Tax Assets (Liabilities) | The Company has fully reserved the net deferred tax assets, as it is more likely than not that the deferred tax assets will not be utilized. Deferred tax assets (liabilities) are composed of the following at December 31, 2020 and 2019 (in thousands):
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Segment Reporting, Geographical Information and Major Customers (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 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 GAAP loss before income tax is as follows (in thousands):
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Summary of Segment Depreciation and Amortization Included in Segment Operating Income (Loss) | Segment depreciation and amortization included in segment operating income (loss) is as follows (in thousands):
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Summary of Concentration of Revenue by Geographic Area |
Significant export sales in Europe are as follows:
|
Summary of Significant Accounting Policies - Schedule of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Receivables [Abstract] | |||
Balance at beginning of period | $ 136 | $ 177 | $ 107 |
Additions charged to costs and expenses | 94 | 62 | 225 |
Reductions | (119) | (103) | (155) |
Balance at end of period | $ 111 | $ 136 | $ 177 |
Summary of Significant Accounting Policies - Schedule of Current Inventory (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 1,356 | $ 1,265 |
Work in process | 76 | 39 |
Finished Goods | 1,712 | 1,307 |
Inventory Net | $ 3,144 | $ 2,611 |
Summary of Significant Accounting Policies - Schedule of Expected Amortization Expense (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Accounting Policies [Abstract] | ||
2021 | $ 291 | |
2022 | 207 | |
2023 | 186 | |
2024 | 103 | |
2025 | 102 | |
Total amortizable intangible assets, net | $ 889 | $ 1,183 |
Summary of Significant Accounting Policies - Summary of Receivables, Contract Assets and Contract Liabilities from Contracts with Customers (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Contract with Customer, Asset and Liability [Abstract] | |||
Receivables, which are included in "Trade accounts receivable" | $ 10,027 | $ 9,819 | |
Current contract assets, which are included in "Prepaid and other assets" | 481 | 14 | |
Non-current contract assets, which are included in "other assets" | 1,434 | 0 | |
Contract liabilities, which are included in "Deferred revenue" | $ 6,384 | $ 5,604 | $ 5,209 |
Summary of Significant Accounting Policies - Summary of Deferred Revenue (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
---|---|---|---|
Deferred Revenue Arrangement [Line Items] | |||
Contract liabilities | $ 6,384 | $ 5,604 | $ 5,209 |
Short-term Contract with Customer [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Contract liabilities | 6,117 | 5,248 | |
Long-term Contract with Customer [Member] | |||
Deferred Revenue Arrangement [Line Items] | |||
Contract liabilities | $ 267 | $ 356 |
Summary of Significant Accounting Policies - Summary of Changes in Deferred Revenue from Contracts with Customers (Detail) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Deferred Revenue Disclosure [Abstract] | ||
Balance at beginning of period | $ 5,604 | $ 5,209 |
Deferral of revenue | 11,212 | 11,005 |
Recognition of deferred revenue | (10,432) | (10,610) |
Balance at end of period | $ 6,384 | $ 5,604 |
Summary of Significant Accounting Policies - Schedule of Changes of Capitalized Costs to Obtain Contract (Detail) - USD ($) |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Capitalized Contract Cost, Net [Abstract] | ||
Balance at beginning of period | $ 379,000 | $ 282,000 |
Deferral of costs to obtain a contract | 157,000 | 294,000 |
Recognition of costs to obtain a contract | (130,000) | (197,000) |
Balance at end of period | $ 406,000 | $ 379,000 |
Summary of Significant Accounting Policies - Roll Forward of Warranty Cost (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Accounting Policies [Abstract] | |||
Beginning accrual balance | $ 17 | $ 12 | $ 10 |
Warranty provision | 58 | 41 | 19 |
Usage | (58) | (36) | (17) |
Ending accrual balance | $ 17 | $ 17 | $ 12 |
Summary of Significant Accounting Policies - Calculation of Net Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | |||
Net loss available to common shareholders | $ (17,610) | $ (13,551) | $ (9,017) |
Basic shares used in the calculation of earnings per share | 22,140 | 18,378 | 16,685 |
Effect of dilutive securities: | |||
Diluted shares used in the calculation of earnings per share | 22,140 | 18,378 | 16,685 |
Net loss per share : | |||
Basic | $ (0.80) | $ (0.74) | $ (0.54) |
Diluted | $ (0.80) | $ (0.74) | $ (0.54) |
Summary of Significant Accounting Policies - Schedule of Anti-dilutive Shares Excluded from Computation of Diluted Net Loss Per Share (Detail) - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock options, warrants and restricted stock | 1,898,673 | 3,444,071 | 4,149,179 |
Stock Options [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock options, warrants and restricted stock | 1,869,507 | 1,550,662 | 1,983,477 |
Restricted Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock options, warrants and restricted stock | 29,166 | 150,909 | 423,202 |
Convertible Debentures [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Common stock options, warrants and restricted stock | 1,742,500 | 1,742,500 |
Summary of Significant Accounting Policies - Level 3 Instruments (Detail) - Level 3 [Member] - Convertible Debentures [Member] $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2020
USD ($)
| |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Beginning Balance | $ 13,642 |
Issuances | 0 |
Fair value adjustments | 7,522 |
Conversion | (21,164) |
Ending Balance | $ 0 |
Sale of MRI Assets - Additional Information (Detail) - USD ($) |
Dec. 31, 2020 |
Jan. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Holdback reserve related to sale and transfer of intangible assets | $ 350,000 | ||
VersaVue Software and DynaCAD Product and Related Assets [Member] | Asset Purchase Agreement [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [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 |
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 |
Dec. 31, 2020
USD ($)
|
---|---|
Shares Issued And Outstanding [Line Items] | |
2021 | $ 1,238 |
2022 | 2,875 |
2023 | 2,735 |
2024 | 1,003 |
Total | $ 7,851 |
Finance Arrangements - Interest Expense in Consolidated Income Statement (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Interest Expense [Line Items] | |||
Amortization of debt costs | $ 45 | $ 28 | $ 29 |
Accrual of notes payable final payment | 55 | 131 | 163 |
Interest expense capital lease | 2 | 4 | |
Total interest expense | 476 | 784 | 504 |
Term Loan A [Member] | |||
Interest Expense [Line Items] | |||
Cash interest expense | 327 | 274 | 299 |
Accrual of notes payable final payment | (293) | ||
Convertible Debt [Member] | |||
Interest Expense [Line Items] | |||
Cash interest expense | $ 49 | $ 349 | $ 9 |
Accrued and Other Expenses - Accrued Expenses (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued salary and related expenses | $ 3,654 | $ 3,200 |
Accrued accounts payable | 2,405 | 2,718 |
Accrued professional fees | 598 | 510 |
Other accrued expenses | 382 | 162 |
Accrued Expenses Total | $ 7,039 | $ 6,590 |
Leases - Additional Information (Detail) |
12 Months Ended |
---|---|
Dec. 31, 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 |
Leases - Schedule of Components of Lease Expense (Detail) - Accounting Standards Update 2016-02 [Member] - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
|
Lessee, Lease, Description [Line Items] | ||
Operating lease cost - Right of Use | $ 884 | $ 804 |
Operating lease cost - Variable Costs | 165 | 173 |
Finance lease costs | ||
Amortization of leased assets | 12 | 15 |
Interest on lease liabilities Interest expense | 1 | 2 |
Total | 1,062 | 994 |
Cash paid for operating cash flows from operating leases | 909 | 840 |
Cash paid for operating cash flows from finance leases | 1 | 2 |
Cash paid for financing cash flows from finance leases | $ 13 | $ 17 |
Weighted-average remaining lease term of operating leases (in years) | 2 years 2 months 15 days | 3 years 1 month 13 days |
Weighted-average remaining lease term of finance leases (in years) | 0 years | 1 year |
Weighted-average discount rate for operating leases | 5.60% | 5.60% |
Weighted-average discount rate for finance leases | 0.00% | 5.40% |
Leases - Summary of Detained Information of Lease Liabilities (Detail) $ in Thousands |
Dec. 31, 2020
USD ($)
|
---|---|
Leases [Abstract] | |
2021 | $ 920 |
2022 | 899 |
2023 | 211 |
2024 | 5 |
Total | 2,035 |
Less: imputed interest | (234) |
Total lease liabilities | 1,801 |
Less: current portion of lease liabilities | (726) |
Total lease liabilities | $ 1,075 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | usgaap:OperatingLeaseLiability |
Stockholders' Equity - Additional Information (Detail) |
1 Months Ended | 12 Months Ended | ||||
---|---|---|---|---|---|---|
Dec. 31, 2020
USD ($)
h
shares
|
Dec. 17, 2020
USD ($)
shares
|
Apr. 27, 2020
USD ($)
$ / shares
shares
|
Dec. 31, 2020
USD ($)
h
Incentive_Plan
shares
|
Dec. 31, 2019
USD ($)
shares
|
Dec. 31, 2018
shares
|
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of stock option | Incentive_Plan | 2 | |||||
Total unrecognized compensation costs | $ | $ 700,000 | $ 700,000 | ||||
Period of expected recognized over a weighted average | 1 year | |||||
Dividends paid on common stock | $ | $ 0 | |||||
ESPP offerings outstanding | 1,869,507 | 1,869,507 | 1,550,662 | 1,983,477 | ||
Common stock, shares issued | 470,704 | 1,562,500 | 155,149 | 379,980 | ||
Price per share, shares issued | $ / shares | $ 8.00 | |||||
Gross proceeds from issuance of common stock | $ | $ 6,600,000 | $ 12,500,000 | ||||
Net proceeds from issuance of common stock | $ | $ 6,100,000 | 12,300,000 | $ 18,285,000 | $ 9,353,000 | ||
Common stock, value of shares | $ | $ 25,000,000.0 | 18,284,000 | $ 9,353,000 | |||
Common stock value, outstanding | $ | $ 18,400,000 | $ 18,400,000 | ||||
Stock Options [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share options available for grant | 462,218 | 462,218 | ||||
Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Period of options granted | 1 year | |||||
Number of restricted stock granted | 15,990 | 379,439 | ||||
Time Based Restricted Stock [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of restricted stock granted | 15,990 | 334,083 | ||||
Time Based Restricted Stock [Member] | Vesting Period One [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares expected to vest | 45,356 | 45,356 | ||||
2012 Stock Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate purchase of Company's common stock | 1,600,000 | 1,600,000 | ||||
Percentage of stockholders exercise price | 10.00% | |||||
Percentage of market price for calculation of purchase price | (110.00%) | |||||
Number of share options available for grant | 129,126 | 129,126 | ||||
Aggregate purchase of Company's common stock, maximum | 250,000 | 250,000 | ||||
Percentage of options granted | 100.00% | |||||
2016 Stock Option Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate purchase of Company's common stock | 2,600,000 | 2,600,000 | ||||
Number of share options available for grant | 333,091 | 333,091 | ||||
Aggregate purchase of Company's common stock, maximum | 1,000,000 | 1,000,000 | ||||
Percentage of options granted | 100.00% | |||||
Number of share options available for grant | $ | $ 100,000 | |||||
2016 Stock Option Plan [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share options available for grant | 1,000,000 | 1,000,000 | ||||
2016 Stock Option Plan [Member] | Maximum [Member] | Non Employee Directors [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share options available for grant | 120,000 | 120,000 | ||||
ESPP [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate purchase of Company's common stock | 950,000 | 950,000 | ||||
Percentage of voting right not eligible for ESPP | 5.00% | 5.00% | ||||
Share-based payment award, maximum employee subscription rate | 15.00% | 15.00% | ||||
Share-based payment award, discount from market price, offering date | 85.00% | |||||
Maximum amout of purchase allowed | $ | $ 25,000,000 | |||||
ESPP offerings outstanding | 42,606 | 42,606 | ||||
Hours Eligible To Participate In The Espp | h | 20 | 20 |
Stockholders' Equity - Summary of Stock Option Activity for all Stock Option plan (Detail) - $ / shares |
1 Months Ended | 12 Months Ended | |||
---|---|---|---|---|---|
Dec. 17, 2020 |
Apr. 27, 2020 |
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Payment Arrangement [Abstract] | |||||
Beginning balance | 1,550,662 | 1,983,477 | |||
Granted | 563,502 | 392,270 | |||
Exercised | (470,704) | (1,562,500) | (155,149) | (379,980) | |
Forfeited | (89,508) | (445,105) | |||
Ending Balance | 1,869,507 | 1,550,662 | 1,983,477 | ||
weighted Average, Beginning Balance | $ 4.33 | $ 4.25 | |||
Granted | 10.09 | 5.81 | |||
Exercised | 4.70 | 3.39 | |||
Forfeited | 2.51 | 6.06 | |||
Weighted Average, Ending Balance | $ 5.91 | $ 4.33 | $ 4.25 | ||
Weighted Average Remaining Contractual Term, Outstanding | 6 years | 5 years | |||
Exercisable, Number of Shares | 1,540,287 | 881,461 | 1,296,439 | ||
Exerciable, Weighted Average Exercise Price | $ 5.55 | $ 4.43 | $ 4.90 |
Stockholders' Equity - Stock-Based Compensation Expense Including Options and Restricted Stock by Category (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | $ 2,844 | $ 1,168 | $ 1,505 |
Cost of Revenue [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | 30 | 3 | 4 |
Engineering and Product Development [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | 376 | 226 | 399 |
Marketing and Sales [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | 657 | 226 | 190 |
General and Administrative Expense [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Allocated share-based compensation expense | $ 1,781 | $ 713 | $ 912 |
Stockholders' Equity - Options Granted under Company's Stock Incentive Plans, Valuation Assumptions and Fair Values (Detail) - $ / shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average exercise price | $ 10.09 | $ 5.81 | |
Stock Option [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Average rish-free interest rate | 0.65% | 1.88% | 2.65% |
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Expected life | 3 years 6 months | 3 years 6 months | 3 years 6 months |
Weighted average exercise price | $ 10.14 | $ 5.92 | $ 2.96 |
Weighted average fair value | $ 4.37 | $ 2.34 | $ 1.23 |
Stock Option [Member] | Maximum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 66.04% | 54.23% | 61.60% |
Stock Option [Member] | Minimum [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Expected volatility | 50.17% | 50.01% | 50.40% |
Stockholders' Equity - Summary of Intrinsic Values of Options (Detail) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Payment Arrangement [Abstract] | |||
Stock Option outstanding | $ 13,626 | $ 5,465 | $ 1,021 |
Exercisable | 11,786 | 3,067 | 499 |
Exercised | $ 1,037 | $ 509 | $ 224 |
Stock Price | $ 13.20 | $ 7.77 | $ 3.70 |
Stockholders' Equity - Summary of Restricted Stock Activity for All Equity Incentive Plans (Detail) - Restricted Stock [Member] - shares |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Beginning outstanding balance | 150,909 | 423,202 | 415,147 |
Granted | 15,990 | 379,439 | |
Vested | (118,077) | (197,730) | (322,388) |
Forfeited | (3,666) | (90,553) | (48,996) |
Ending outstanding balance | 29,166 | 150,909 | 423,202 |
Stockholders' Equity - Summary of Intrinsic Values of Restricted Stock (Detail) - USD ($) $ / shares in Units, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of stock options outstanding, Beginning of period | $ 385 | $ 1,173 | $ 1,566 |
Number of stock options outdtanding, vested | $ 1,559 | $ 1,536 | $ 1,193 |
Number of stock options outstanding, Stock price | $ 13.20 | $ 7.77 | $ 3.70 |
Income Taxes - Components of Income Tax Expense (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Current provision (benefit): | |||
Federal | |||
State | 37 | $ 42 | $ 54 |
Current provision (benefit), Total | 37 | 42 | 54 |
Deferred provision: | |||
Federal | 1 | 1 | (10) |
State | (2) | ||
Deferred provision, Total | 1 | 1 | (12) |
Total | $ 38 | $ 43 | $ 42 |
Income Taxes - Summary of Effective and the Federal Statutory Income Tax Rate (Detail) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Schedule Of Income Tax Expense [Line Items] | |||
Federal statutory rate | 21.00% | 21.00% | 21.00% |
State income taxes, net of federal benefit | 2.40% | 1.70% | 3.60% |
Net state impact of deferred rate change | (0.70%) | (2.00%) | 0.60% |
Stock compensation expense | 0.90% | (10.70%) | (1.10%) |
Tax amortization on goodwill | 0.00% | 0.00% | 0.10% |
Goodwill impairment | 0.00% | 0.00% | 0.00% |
Other permanent differences | (0.10%) | 0.00% | (0.50%) |
Change in valuation allowance | (13.40%) | (6.00%) | (27.60%) |
Tax credits | 1.40% | 2.80% | 3.10% |
Federal Rate Change | 0.00% | 0.00% | 0.00% |
Accrual to tax return | 0.00% | 1.30% | 0.30% |
Change in FV of convertible debt | (9.00%) | (10.40%) | 0.00% |
Foreign Rate Differential | 0.00% | 0.20% | 0.00% |
True Ups—NOL Expiration/162(m) limits | (2.80%) | 0.00% | 0.00% |
Effective income tax | (0.30%) | (0.30%) | (0.50%) |
Xoft Inc [Member] | |||
Schedule Of Income Tax Expense [Line Items] | |||
Increase Xoft NOLs under 382 Study | 0.00% | 0.00% | 0.00% |
Income Taxes - Deferred Tax Assets (Liabilities) (Detail) - USD ($) $ in Thousands |
Dec. 31, 2020 |
Dec. 31, 2019 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Inventory (Section 263A) | $ 248 | $ 242 |
Inventory reserves | 60 | 118 |
Receivable reserves | 28 | 35 |
Other accruals | 1,081 | 1,151 |
Deferred revenue | 75 | 123 |
Accumulated depreciation/amortization | 37 | 66 |
Stock options | 459 | 267 |
Developed technology | 1,449 | 1,702 |
Tax credits | 3,859 | 3,663 |
NOL carryforward | 36,078 | 33,640 |
Lease liability | 415 | 625 |
Net deferred tax assets | 43,789 | 41,632 |
Valuation allowance | (43,356) | (41,025) |
Right of Use Asset | (433) | (607) |
Goodwill tax amortization | (4) | (3) |
Deferred tax liability | $ (4) | $ (3) |
Income Taxes - Additional Information (Detail) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Schedule Of Income Tax Expense [Line Items] | |||
Federal net operating loss carryforwards | $ 149,100,000 | ||
Net operating losses utilized | 0 | $ 0 | |
Unrecognized tax benefits | 0 | 0 | |
Interest or penalties related to uncertain tax positions | $ 0 | 0 | $ 0 |
Company preceding tax years | 3 years | ||
Tax credits | $ 3,859,000 | $ 3,663,000 | |
Expire Between 2019 And 2037 [Member] | |||
Schedule Of Income Tax Expense [Line Items] | |||
Federal net operating loss carryforwards | 122,100,000 | ||
Indefinite Period [Member] | |||
Schedule Of Income Tax Expense [Line Items] | |||
Federal net operating loss carryforwards | $ 27,000,000.0 | ||
Minimum [Member] | |||
Schedule Of Income Tax Expense [Line Items] | |||
Expiring date of net operating loss carryforward | 2021 | ||
Maximum [Member] | |||
Schedule Of Income Tax Expense [Line Items] | |||
Expiring date of net operating loss carryforward | 2037 | ||
Xoft Inc [Member] | |||
Schedule Of Income Tax Expense [Line Items] | |||
Net operating losses that are subject to limitations | $ 6,600,000 | ||
Net operating losses that are subject to limitations that can be used through 2029 | 656,000 | ||
Future Income tax liabilities offset With operation loss carryforward | $ 3,900,000 | ||
Tax credit carryforward expiration year | 2039 | ||
Tax credits | $ 1,800,000 |
Segment Reporting, Geographical Information and Major Customers - Additional Information (Detail) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020
USD ($)
customer
Segment
|
Dec. 31, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
|
Schedule Of Geographical Information [Line Items] | |||
Number of reporting segments | Segment | 2 | ||
Percentage of export sales to any single country | 10.00% | ||
Total Export Sales | $ 25,621 | ||
Outstanding receivables | $ 10,027 | $ 9,819 | |
Number of major customers | customer | 1 | ||
Total Revenue | $ 29,698 | $ 31,340 | $ 25,621 |
Percentage of receivables | 100.00% | 100.00% | 100.00% |
Revenues | $ 25,621 | ||
GE Healthcare [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Outstanding receivables | $ 1,500 | ||
Percentage of receivables | 9.00% | ||
OEM Partners [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Outstanding receivables | $ 4,400 | ||
Three Customers [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Outstanding receivables | 1,700 | ||
Detection OEM [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Outstanding receivables | $ 1,100 | ||
Percentage of receivables | 11.00% | ||
Sales [Member] | GE Healthcare [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Total Export Sales | $ 2,800 | ||
Total Revenue | 5,000 | $ 7,600 | $ 6,100 |
Revenues | $ 2,800 | ||
Sales [Member] | Customer Concentration Risk [Member] | GE Healthcare [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 17.00% | 24.00% | 24.00% |
Sales [Member] | Customer Concentration Risk [Member] | Five Customers [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 33.00% | 33.00% | |
Sales [Member] | Customer Concentration Risk [Member] | OEM Partners [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 28.00% | ||
Sales [Member] | Customer Concentration Risk [Member] | Four OEM Partners [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 26.00% | ||
Sales [Member] | Detection [Member] | Customer Concentration Risk [Member] | Five Customers [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 46.00% | 50.00% | |
Sales [Member] | Detection [Member] | Customer Concentration Risk [Member] | OEM Partners [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 37.00% | ||
Sales [Member] | Detection [Member] | Customer Concentration Risk [Member] | Four OEM Partners [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 35.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | GE Healthcare [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 34.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | OEM Partners [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 44.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Three Customers [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of receivables | 17.00% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Detection OEM [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Outstanding receivables | $ 7,100 | ||
Percentage of receivables | 72.00% | ||
Non-US [Member] | |||
Schedule Of Geographical Information [Line Items] | |||
Percentage of export sales of total sale | 20.00% | 12.00% | 12.00% |
Total Export Sales | $ 6,100 | $ 3,800 | $ 3,200 |
Outstanding receivables | 3,400 | 2,100 | |
Revenues | $ 6,100 | $ 3,800 | $ 3,200 |
Segment Reporting, Geographical Information and Major Customers - 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 |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Segment revenues: | |||
Total Revenue | $ 29,698 | $ 31,340 | $ 25,621 |
Segment gross profit: | |||
Segment gross profit | 21,354 | 24,227 | 19,430 |
Segment operating income (loss): | |||
Segment operating income (loss) | (309) | 1,088 | 1,039 |
General administrative | (9,079) | (7,486) | (9,169) |
Interest expense | (476) | (784) | (504) |
Financing costs | (451) | ||
Loss on extinguishment of debt | (341) | ||
Other income | 97 | 345 | 110 |
Fair value of convertible debentures | (7,464) | (6,671) | |
Loss before income tax expense | (17,572) | (13,508) | (8,975) |
Product [Member] | |||
Segment revenues: | |||
Total Revenue | 18,903 | 19,767 | 13,111 |
Service [Member] | |||
Segment revenues: | |||
Total Revenue | 10,795 | 11,573 | 12,510 |
Detection [Member] | |||
Segment gross profit: | |||
Segment gross profit | 17,856 | 18,627 | 14,709 |
Segment operating income (loss): | |||
Segment operating income (loss) | 2,719 | 2,564 | 3,412 |
Detection [Member] | Product [Member] | |||
Segment revenues: | |||
Total Revenue | 21,997 | 22,319 | 16,864 |
Therapy [Member] | |||
Segment gross profit: | |||
Segment gross profit | 3,498 | 5,600 | 4,721 |
Segment operating income (loss): | |||
Segment operating income (loss) | (3,028) | (1,476) | (2,373) |
Therapy [Member] | Service [Member] | |||
Segment revenues: | |||
Total Revenue | $ 7,701 | $ 9,021 | $ 8,757 |
Segment Reporting, Geographical Information and Major Customers - Summary of Segment Depreciation and Amortization Included in Segment Operating Income (Loss) (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Depreciation | $ 268 | $ 297 | $ 325 |
Amortization | 309 | 377 | 383 |
Detection [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Depreciation | 115 | 103 | 106 |
Amortization | 164 | 240 | 248 |
Therapy [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Depreciation | 124 | 166 | 177 |
Amortization | $ 128 | $ 128 | $ 129 |
Segment Reporting, Geographical Information and Major Customers - Summary of Concentration of Revenue by Geographic Area (Detail) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2020 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 100.00% | 100.00% | 100.00% |
Total Export sales | $ 6,081 | $ 3,788 | $ 3,255 |
Europe | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 45.00% | 57.00% | 51.00% |
Taiwan | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 13.00% | 15.00% | 22.00% |
Canada | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 5.00% | 7.00% | 7.00% |
China | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 22.00% | 8.00% | 0.00% |
Other | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 15.00% | 13.00% | 20.00% |
France | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 41.00% | 34.00% | 36.00% |
Spain | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 17.00% | 12.00% | 8.00% |
Germany | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 12.00% | 4.00% | 3.00% |
Italy | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 8.00% | 2.00% | 1.00% |
United Kingdon | |||
Schedule Of Concentration Of Revenue By Geographic Area [Line Items] | |||
Percent of Export sales | 6.00% | 2.00% | 0.00% |
Commitments and Contingencies - Additional Information (Detail) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Nov. 08, 2018 |
Dec. 31, 2020 |
Jan. 30, 2017 |
Dec. 31, 2016 |
|
Schedule Of Leases [Line Items] | ||||
Purchase obligations to suppliers for future product deliverables | $ 3,400,000 | |||
Holdback reserve related to sale and transfer of intangible assets | 350,000 | |||
Employer matching Contribution | 500,000 | |||
Employer matching Contribution to be paid in next fiscal year | 500,000 | |||
Minimum annual royalty payment | 250,000 | |||
Fair value of patent license | $ 100,000 | |||
Patent license, Estimated Amortizable Life | 4 years | |||
Minimum royalty obligations | $ 400,000 | |||
Chief Executive Officer [Member] | ||||
Schedule Of Leases [Line Items] | ||||
Accrued separation benefis | $ 1,009,000 | |||
Separation benefits severance period | 24 months | |||
Separation Benefits Health Benefits Period | 18 months | |||
Separation benefits payable beginning date | 2019-05 | |||
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 |
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