Cover
Cover - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 000-28440 | |
Entity Registrant Name | ENDOLOGIX INC /DE/ | |
Entity Central Index Key | 0001013606 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 68-0328265 | |
Entity Address, Address Line One | 2 Musick | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | 949 | |
Local Phone Number | 595-7200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Title of 12(b) Security | Common Stock | |
No Trading Symbol Flag | true | |
Security Exchange Name | NASDAQ | |
Entity Common Stock, Shares Outstanding | 20,657,178 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 18,496 | $ 41,560 |
Restricted cash | 1,200 | 1,200 |
Accounts receivable, net of allowance for doubtful accounts of $3,107 and $1,317, respectively | 11,087 | 22,392 |
Other receivables | 275 | 282 |
Inventories | 25,908 | 26,405 |
Prepaid expenses and other current assets | 4,441 | 1,864 |
Total current assets | 61,407 | 93,703 |
Property and equipment, net | 11,838 | 13,152 |
Goodwill | 120,816 | 120,814 |
Other intangible assets, net | 71,048 | 72,603 |
Deposits and other assets | 662 | 1,124 |
Operating lease right-of-use assets | 5,644 | 5,768 |
Total assets | 271,415 | 307,164 |
Current liabilities: | ||
Accounts payable | 8,837 | 14,024 |
Accrued payroll | 12,990 | 18,232 |
Accrued expenses and other current liabilities | 15,084 | 12,931 |
Current portion of debt | 192,687 | 10,606 |
Total current liabilities | 229,598 | 55,793 |
Deferred income taxes | 150 | 150 |
Operating lease liabilities | 11,127 | 11,621 |
Derivative liabilities | 0 | 940 |
Other liabilities | 1,823 | 2,244 |
Contingently issuable common stock | 300 | 500 |
Debt | 0 | 172,060 |
Total liabilities | 242,998 | 243,308 |
Commitments and contingencies | ||
Stockholders’ equity: | ||
Series DF-1 convertible preferred stock, $0.001 par value, 1,150,000 shares authorized, 14,649 shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value, 170,000,000 shares authorized, 19,299,228 and 18,190,054 shares issued, respectively, and 19,173,845 and 18,098,464 shares outstanding, respectively | 19 | 18 |
Treasury stock, at cost, 125,383 and 91,590 shares, respectively | (4,278) | (4,235) |
Additional paid-in capital | 738,571 | 730,729 |
Accumulated deficit | (708,681) | (664,472) |
Accumulated other comprehensive income | 2,786 | 1,816 |
Total stockholders’ equity | 28,417 | 63,856 |
Total liabilities and stockholders’ equity | $ 271,415 | $ 307,164 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Allowance for Doubtful Accounts | $ 3,107 | $ 1,317 |
Convertible preferred stock outstanding (in shares) | 15,000 | 0 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock authorized (in shares) | 170,000,000 | 170,000,000 |
Common stock issued (in shares) | 19,299,228 | 18,190,054 |
Common stock outstanding (in shares) | 19,173,845 | 18,098,464 |
Treasury stock (in shares) | 125,383 | 91,590 |
Convertible preferred stock | ||
Convertible preferred stock par value (in dollars per share) | $ 0.001 | |
Convertible preferred stock authorized (in shares) | 1,150,000 | |
Convertible preferred stock issued (in shares) | 14,649 | |
Convertible preferred stock outstanding (in shares) | 14,649 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 24,841 | $ 36,238 | $ 53,351 | $ 71,844 |
Cost of goods sold | 10,688 | 13,254 | 24,066 | 25,661 |
Gross profit | 14,153 | 22,984 | 29,285 | 46,183 |
Operating expenses: | ||||
Research and development | 3,624 | 4,355 | 7,160 | 9,142 |
Clinical and regulatory affairs | 3,071 | 3,647 | 6,236 | 7,432 |
Marketing and sales | 11,610 | 15,920 | 26,106 | 32,706 |
General and administrative | 13,197 | 8,929 | 23,316 | 18,345 |
Restructuring costs | 0 | 0 | 0 | 419 |
Total operating expenses | 31,502 | 32,851 | 62,818 | 68,044 |
Loss from operations | (17,349) | (9,867) | (33,533) | (21,861) |
Other income (expense): | ||||
Interest expense | (10,863) | (8,857) | (21,390) | (17,347) |
Other expense, net | (65) | (479) | (1,187) | (161) |
Change in fair value of contingent consideration related to acquisition | (100) | (300) | 200 | (100) |
Change in fair value of derivative liabilities | 2,330 | 872 | 12,505 | (1,151) |
Loss on debt extinguishment | 0 | (11,756) | (730) | (11,756) |
Total other expense, net | (8,698) | (20,520) | (10,602) | (30,515) |
Net loss before income taxes | (26,047) | (30,387) | (44,135) | (52,376) |
Income tax benefit (expense) | (46) | 3,253 | (73) | 3,214 |
Net loss | (26,093) | (27,134) | (44,208) | (49,162) |
Comprehensive loss, net of taxes: | ||||
Net loss | (26,093) | (27,134) | (44,208) | (49,162) |
Other comprehensive income (loss) foreign currency translation | 222 | 588 | 970 | (10) |
Comprehensive loss | $ (25,871) | $ (26,546) | $ (43,238) | $ (49,172) |
Basic and diluted net loss per share (in dollars per share) | $ (1.26) | $ (1.50) | $ (2.17) | $ (3.44) |
Shares used in computing basic and diluted net loss per share (in shares) | 20,717 | 18,142 | 20,392 | 14,280 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (44,208) | $ (49,162) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Deferred income taxes | 0 | (3,380) |
Bad debt expense | 1,942 | 605 |
Depreciation and amortization | 2,870 | 3,475 |
Stock-based compensation | 2,656 | 4,884 |
Change in fair value of derivative liabilities | (12,505) | 1,151 |
Change in fair value of contingent consideration related to acquisition | (200) | 100 |
Accretion of interest and amortization of deferred financing costs | 10,199 | 7,239 |
Payable in kind interest expense on term loan facility | 6,331 | 3,883 |
Non-cash foreign exchange loss | 1,214 | 122 |
Loss on debt extinguishment | 730 | 11,756 |
Non-cash lease expense | 107 | 113 |
Changes in operating assets and liabilities: | ||
Accounts receivable and other receivables | 9,321 | (1,851) |
Inventories | 339 | (463) |
Prepaid expenses and other current assets | (2,231) | 587 |
Accounts payable | (5,079) | 1,666 |
Accrued payroll | (5,224) | (781) |
Accrued expenses and other liabilities | 2,416 | (394) |
Net cash used in operating activities | (31,322) | (20,450) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (103) | (229) |
Net cash used in investing activities | (103) | (229) |
Cash flows from financing activities: | ||
Deferred financing costs | (1,379) | (3,977) |
Proceeds from PPP loan | 9,813 | 0 |
Proceeds from sale of common stock under employee stock purchase plan | 49 | 209 |
Minimum tax withholding paid on behalf of employees for stock-based compensation | (43) | (94) |
Proceeds from common stock offering and pre-paid warrants, net of expenses paid | 0 | 51,985 |
Net cash provided by financing activities | 8,440 | 48,123 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (79) | (32) |
Net increase (decrease) in cash, cash equivalents and restricted cash | (23,064) | 27,412 |
Cash, cash equivalents and restricted cash, beginning of period | 42,760 | 24,731 |
Total cash, cash equivalents and restricted cash, end of period | 19,696 | 52,143 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 2,678 | 4,398 |
Cash paid for income taxes | 116 | 179 |
Cash paid for amounts included in the measurement of operating lease liabilities | 1,580 | 1,701 |
Non-cash investing and financing activities: | ||
Acquisition of property and equipment included in accounts payable | 0 | 77 |
Fair value of embedded derivative issued in connection with loan agreements (Note 7) | 12,016 | 22,808 |
Conversion of debt to equity | 0 | 1,860 |
Fair value of common and preferred stock issued in connection with loan agreements | $ 2,000 | $ 0 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Cash Reconciliation) (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Cash Flows [Abstract] | ||
Cash and cash equivalents | $ 18,496 | $ 50,943 |
Restricted cash | 1,200 | 1,200 |
Total cash, cash equivalents and restricted cash | $ 19,696 | $ 52,143 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Accumulated Other Comprehensive Income (Loss) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, par value (usd per share) | $ 10,000 | |||||
Balance at beginning of period (in shares) at Dec. 31, 2018 | 10,388,000 | |||||
Balance at beginning of period at Dec. 31, 2018 | $ 39,646 | $ 640,789 | $ (599,715) | $ (4,026) | $ 2,588 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury shares purchased | (1) | |||||
Stock-based compensation expense | 1,512 | 1,512 | ||||
Issuance of restricted stock (in shares) | 3,000 | |||||
Issuance of restricted stock | 0 | |||||
Restricted stock expense | 849 | 849 | ||||
Net loss | (22,028) | (22,028) | ||||
Other comprehensive income | (598) | (598) | ||||
Balance at end of period (in shares) at Mar. 31, 2019 | 10,391,000 | |||||
Balance at end of period at Mar. 31, 2019 | 19,380 | 643,150 | (621,743) | (4,027) | 1,990 | |
Balance at beginning of period (in shares) at Dec. 31, 2018 | 10,388,000 | |||||
Balance at beginning of period at Dec. 31, 2018 | 39,646 | 640,789 | (599,715) | (4,026) | 2,588 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (49,162) | |||||
Balance at end of period (in shares) at Jun. 30, 2019 | 17,409,000 | |||||
Balance at end of period at Jun. 30, 2019 | 72,076 | 722,478 | (648,877) | (4,120) | 2,578 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, par value (usd per share) | $ 10,000 | |||||
Balance at beginning of period (in shares) at Mar. 31, 2019 | 10,391,000 | |||||
Balance at beginning of period at Mar. 31, 2019 | 19,380 | 643,150 | (621,743) | (4,027) | 1,990 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury shares purchased (in shares) | 13,000 | |||||
Treasury shares purchased | (93) | (93) | ||||
Deerfield warrants | 4,854 | 4,854 | ||||
Employee stock purchase plan (in shares) | 42,000 | |||||
Employee stock purchase plan | 207 | 207 | ||||
Equity conversion option | 18,651 | 18,651 | ||||
Stock-based compensation expense | 1,355 | 1,355 | ||||
Issuance of restricted stock (in shares) | 35,000 | |||||
Prepaid warrants | 9,700 | 9,700 | ||||
Restricted stock expense | 1,168 | 1,168 | ||||
Issuance of common stock (in shares) | 6,422,000 | |||||
Issuance of common stock | 42,285 | 42,279 | ||||
Shares issued upon conversion of debt (in shares) | 506,000 | |||||
Shares issued upon conversion of debt | 1,877 | 1,876 | ||||
Debt issuance costs allocated to equity | (762) | (762) | ||||
Net loss | (27,134) | (27,134) | ||||
Other comprehensive income | 588 | 588 | ||||
Balance at end of period (in shares) at Jun. 30, 2019 | 17,409,000 | |||||
Balance at end of period at Jun. 30, 2019 | $ 72,076 | 722,478 | (648,877) | (4,120) | 2,578 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, par value (usd per share) | $ 17,000 | |||||
Issuance of common stock, par value (usd per share) | $ 0.001 | |||||
Preferred Stock, beginning balance (in shares) at Dec. 31, 2019 | 0 | |||||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 18,098,464 | 18,190,000 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ 63,856 | $ 18 | 730,729 | (664,472) | (4,235) | 1,816 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury shares purchased (in shares) | 26,000 | |||||
Treasury shares purchased | (36) | (36) | ||||
Deerfield warrants | (375) | (375) | ||||
Equity conversion option | 3,566 | 3,566 | ||||
Stock-based compensation expense | 969 | 969 | ||||
Issuance of restricted stock (in shares) | 49,000 | |||||
Issuance of restricted stock | 0 | |||||
Restricted stock expense | 764 | 764 | ||||
Issuance of common stock (in shares) | 950,000 | |||||
Issuance of common stock | $ 787 | $ 1 | 786 | |||
Issuance of Series DF-1 Preferred Stock (in shares) | 15,000 | |||||
Issuance of Series DF-1 Preferred Stock | $ 1,213 | 1,213 | ||||
Debt issuance costs allocated to equity | (53) | (53) | ||||
Net loss | (18,116) | (18,116) | ||||
Other comprehensive income | $ 748 | 748 | ||||
Preferred Stock, ending balance (in shares) at Mar. 31, 2020 | 15,000 | |||||
Balance at end of period (in shares) at Mar. 31, 2020 | 19,215,000 | |||||
Balance at end of period at Mar. 31, 2020 | $ 53,323 | $ 19 | 737,599 | (682,588) | (4,271) | 2,564 |
Preferred Stock, beginning balance (in shares) at Dec. 31, 2019 | 0 | |||||
Balance at beginning of period (in shares) at Dec. 31, 2019 | 18,098,464 | 18,190,000 | ||||
Balance at beginning of period at Dec. 31, 2019 | $ 63,856 | $ 18 | 730,729 | (664,472) | (4,235) | 1,816 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | $ (44,208) | |||||
Preferred Stock, ending balance (in shares) at Jun. 30, 2020 | 15,000 | |||||
Balance at end of period (in shares) at Jun. 30, 2020 | 19,173,845 | 19,299,000 | ||||
Balance at end of period at Jun. 30, 2020 | $ 28,417 | $ 19 | 738,571 | (708,681) | (4,278) | 2,786 |
Preferred Stock, beginning balance (in shares) at Mar. 31, 2020 | 15,000 | |||||
Balance at beginning of period (in shares) at Mar. 31, 2020 | 19,215,000 | |||||
Balance at beginning of period at Mar. 31, 2020 | $ 53,323 | $ 19 | 737,599 | (682,588) | (4,271) | 2,564 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Treasury shares purchased (in shares) | 8,000 | |||||
Treasury shares purchased | (7) | (7) | ||||
Employee stock purchase plan | 50 | |||||
Stock-based compensation expense | 723 | 723 | ||||
Issuance of restricted stock (in shares) | 76,000 | |||||
Restricted stock expense | 199 | 199 | ||||
Net loss | (26,093) | (26,093) | ||||
Other comprehensive income | $ 222 | 222 | ||||
Preferred Stock, ending balance (in shares) at Jun. 30, 2020 | 15,000 | |||||
Balance at end of period (in shares) at Jun. 30, 2020 | 19,173,845 | 19,299,000 | ||||
Balance at end of period at Jun. 30, 2020 | $ 28,417 | $ 19 | $ 738,571 | $ (708,681) | $ (4,278) | $ 2,786 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Issuance of common stock, par value (usd per share) | $ 0.001 | $ 6,000 | ||||
Shares issued upon conversion of debt, par value (usd per share) | $ 1,000 |
Description of Business, Basis
Description of Business, Basis of Presentation, and Operating Segment | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, Basis of Presentation, and Operating Segment | Description of Business, Basis of Presentation, and Operating Segment (a) Description of Business Endologix ® , Inc. (the “Company”) is a Delaware corporation with corporate headquarters located in Irvine, California and production facilities located in Irvine, California and Santa Rosa, California. The Company develops, manufactures, markets and sells innovative medical devices for the treatment of aortic disorders. The Company’s products are intended for the minimally-invasive endovascular treatment of abdominal aortic aneurysms (“AAA”). The Company’s AAA products are built on one of two platforms: (i) traditional minimally-invasive endovascular aneurysm repair (“EVAR”); or (ii) endovascular aneurysm sealing (“EVAS”), the Company’s innovative solution for sealing the aneurysm sac while maintaining blood flow. The Company’s current EVAR products include the AFX ® Endovascular AAA System, the VELA ® Proximal Endograft and the Ovation ® Abdominal Stent Graft System. The Company’s current EVAS product is the Nellix ® Endovascular Aneurysm Sealing System (the “Nellix EVAS System”). The Company derives all of its reported revenue from sales of its EVAR and EVAS products (including extensions and accessories) to hospitals and third party distributors. (b) Basis of Presentation The accompanying Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements include the financial position, results of operations and cash flows of the Company, including its subsidiaries, all of which are wholly-owned. All inter-company accounts and transactions have been eliminated in consolidation. For the three and six months ended June 30, 2020 and 2019 , there were no related party transactions. The Company adopted Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - (Subtopic 205-40) effective December 31, 2016, which requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within 12 months from the date of the issuance of these financial statements. The Company has a history of recurring losses from operations, recurring cash flow losses, and a net capital deficiency. Further, during the six months ended June 30, 2020 , the COVID-19 pandemic had a negative impact on the Company’s financial results and business operations, and the Company expects that financial results and business operations will continue to be negatively impacted by the pandemic. As a result, the Company believes that its existing liquidity will not be sufficient to meet anticipated cash needs for at least the next 12 months from the issuance date of these financial statements, thereby raising substantial doubt about the Company’s ability to continue as a going concern. Voluntary Petition for Reorganization As discussed further in Note 3, on July 5, 2020 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”). The commencement of the Chapter 11 Cases constitutes an event of default or termination event under all debt agreements of the Company. Accordingly, the Company has classified all of its outstanding debt as a current liability on its consolidated balance sheet as of June 30, 2020. Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against the Debtors, including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Debtors' property. Subject to certain exceptions under the Bankruptcy Code, the filing of the Debtors' Chapter 11 Cases also automatically stayed the filing of most legal proceedings and other actions against or on behalf of the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Debtors' bankruptcy estates, unless and until the Court modifies or lifts the automatic stay as to any such claim. Additionally, as the Chapter 11 Cases commenced on July 5, 2020, during the Company's third quarter, the current financial statements have not been prepared on the basis of ASC Subtopic 852-10, Reorganizations. A Chapter 11 plan of reorganization is likely to materially change the amounts and classifications of assets and liabilities reported in the Company’s subsequent consolidated balance sheet. Ability to Continue as a Going Concern The consolidated financial statements included herein have been prepared on a going concern basis, which contemplates continuity of operations and the realization of assets and the repayment of liabilities in the ordinary course of business. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to significant uncertainty. While operating as a debtor-in-possession pursuant to the Bankruptcy Code, the Company may sell, or otherwise dispose of or liquidate, assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in the accompanying consolidated financial statements. In addition, the COVID-19 pandemic has, and continues to have, a material impact on the Company’s business operations, financial position, liquidity, capital resources and results of operations (see Note 3). The risks and uncertainties surrounding the Chapter 11 Cases, the defaults under our debt agreements (see Note 3), and our financial condition, raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s future plans, including those in connection with the Chapter 11 Cases, are not yet finalized, fully executed or approved by the Bankruptcy Court, and therefore cannot be deemed probable of mitigating this substantial doubt within 12 months of the date of issuance of these financial statements. The Company has not made any adjustments to the accompanying consolidated financial statements related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company will require additional capital to sustain its operations and make the investments it needs to execute upon its business plan. If the Company is unable to generate sufficient revenue from its existing business plan, it will need to obtain additional equity or debt financing. If the Company attempts to obtain additional debt or equity financing, it cannot assume that such financing will be available on favorable terms, if at all. The interim financial data as of June 30, 2020 is unaudited and is not necessarily indicative of the results for a full year. In the opinion of the Company’s management, the interim data includes normal and recurring adjustments necessary for a fair presentation of the Company’s financial results for the three and six months ended June 30, 2020 . Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 , filed with the SEC on March 11, 2020 (the “Annual Report”). (c) Operating Segment The Company has one operating and reporting segment that is focused exclusively on the development, manufacture, marketing and sale of EVAR and EVAS products for the treatment of aortic disorders. For the three and six months ended June 30, 2020 , all of the Company’s revenue and related expenses were solely attributable to these activities. Substantially all of the Company’s long-lived assets are located in the United States. |
Use of Estimates and Summary of
Use of Estimates and Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Use of Estimates and Summary of Significant Accounting Policies | Use of Estimates and Summary of Significant Accounting Policies (a) Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Management evaluates its estimates on an ongoing basis, including those related to: (i) collectibility of customer accounts; (ii) whether the cost of inventories can be recovered; (iii) the value of goodwill and intangible assets; (iv) realization of tax assets and estimates of tax liabilities; (v) likelihood of payment and the value of contingent liabilities; and (vi) the potential outcome of litigation. Such estimates are based on management’s judgment which takes into account historical experience and various assumptions. Nonetheless, actual results may differ from management’s estimates. (b) Summary of Significant Accounting Policies For a complete summary of the Company’s significant accounting policies, please refer to Note 2, “Summary of Significant Accounting Policies,” in Part II, Item 8, of the Annual Report. Except as discussed below, there have been no other material changes to the Company’s significant accounting policies during the three months ended June 30, 2020 . |
Bankruptcy Filing
Bankruptcy Filing | 6 Months Ended |
Jun. 30, 2020 | |
Reorganizations [Abstract] | |
Bankruptcy Filing | Bankruptcy Filing Bankruptcy Petitions On July 5, 2020 (“Petition Date”), the Company and certain of its affiliates (collectively, the “Debtors”) each filed a voluntary petition for relief under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”). The Debtors filed motions with the Bankruptcy Court seeking authorization to continue to operate their businesses as “debtors-in-possession” under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors’ chapter 11 cases (the “Chapter 11 Cases”) are being jointly administered under the caption “In re: TriVascular Sales LLC, et. al., Case No. 20-31840-sgj11.” Operation and Implications of the Bankruptcy Filing The Debtors will continue to operate their business and manage their property as debtors-in-possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. On July 6, 2020, the Company also filed the Debtors’ Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code [Docket No. 19](the “Plan”) which sets forth a proposed restructuring transaction aimed to address the Company’s outstanding debt structure through a significant de-leveraging and to position the Company for long-term growth. To ensure their ability to continue operating in the ordinary course of business, the Debtors have filed with the Court motions seeking a variety of “first day” relief (collectively, the “First Day Motions”), including to: (a) authorize the Debtors to continue using their existing cash management system, (b) authorize the Debtors to pay pre-petition wages, compensation and employee benefits, (c) establish procedures with respect to the transfer of equity interests, and (d) authorize the Debtors to pay pre-petition amounts owed to certain vendors, suppliers and contract counter-parties in the ordinary course of business as the debts come due. In general, as debtors-in-possession under the Bankruptcy Code, the Debtors are authorized to continue to operate as an ongoing business but may not engage in transactions outside the ordinary course of business without the prior approval of the Bankruptcy Court. Pursuant to first day and second day motions filed with the Bankruptcy Court, the Bankruptcy Court authorized the Company to conduct its business activities in the ordinary course, including, among other things and subject to the terms and conditions of such orders, authorizing the Company to: (i) obtain debtor-in-possession financing, (ii) pay employee wages and benefits, (iii) fund customer and subscriber programs, (iv) pay vendors and suppliers in the ordinary course for all goods and services going forward, and (v) pay critical vendors, utilities, and taxes in the ordinary course. Debtor-In-Possession Financing In connection with the Chapter 11 Cases, on July 5, 2020, the Bankruptcy Court entered an interim order (the “Interim Order”) approving the Company’s debtor-in-possession financing (“DIP Financing”) pursuant to terms set forth in a secured priming, delayed draw term loan debtor-in-possession credit agreement, dated as of July 8, 2020 (the “DIP Credit Agreement”), by and among the Company, as borrower, each lender from time to time party to the DIP Credit Agreement, including, but not limited to Deerfield, Deerfield Private Design Fund III, L.P., and Deerfield Partners, L.P. (collectively, the “DIP Lenders”) and Deerfield., as agent (the “DIP Agent”) for itself and the DIP Lenders. The DIP Lenders comprise 100% of the lenders under the Deerfield Facility Agreement and Deerfield Credit Agreement (“Existing Facility Agreement”). The DIP Credit Agreement, subject to the conditions therein, provides for senior secured term loans in the aggregate principal amount of up to $130,800,000 in post-petition financing, consisting of: (i) an initial term loan of $10 million advanced on the closing date, (ii) a delayed draw term loan commitment of $20.8 million , the draw of which is subject to certain conditions, including the occurrence of entry of a final order and occurrence of September 1, 2020 and (iii) a roll-up loan refinancing, in part, term loans under the Existing Facility Agreement, which roll-up loan will be in the aggregate principal amount of $100,000,000 and advanced upon entry of a final order (collectively, the “DIP Loans”). The Company is also required to pay the DIP Lenders a closing fee equal to 2.0% of the aggregate committed loan amount, less the amount of the roll-up loan. The proceeds of the DIP Loans will be used for: (i) the payment of the allowed administrative costs and expenses of the Chapter 11 Case (including the carve-out), (ii) the payment of certain payments pursuant to first day orders, (iii) the payment of adequate protection payments as set forth in financing orders, (iv) current interest and fees due to the DIP Agent and the DIP Lenders pursuant to the terms of the DIP Credit Agreement, (v) working capital purposes and, (vi) upon entry of a final order, as a deemed repayment and refinancing of a portion of the outstanding indebtedness under the Existing Facility Agreement in an aggregate amount equal to $100,000,000 , in each case, consistent with the budget (as in effect from time to time and subject to the permitted variance) and financing orders. The maturity date of the DIP Credit Agreement is the earliest of: (i) October 5, 2020; (ii) the date of acceleration of the DIP Loans and termination of the commitments under the DIP Credit Agreement following an event of default thereunder; (iii) the effective date of a plan of reorganization or liquidation confirmed in any of the Chapter 11 Case, (iv) the consummation of a sale of all or substantially all of the assets of the Debtors pursuant to section 363 of the Bankruptcy Code or otherwise, other than in connection with a confirmed plan of reorganization or liquidation in the Chapter 11 Cases or as otherwise approved by the Agent in its reasonable discretion (v) the date of termination of the Restructuring Support Agreement, (vi) without the Agent’s prior written consent, the date of filing or express written support by any Debtor of a plan of liquidation or reorganization and related disclosure statement, or order of dismissal and (vii) the date that is 60 days after the Petition Date (or such later date as agreed to by the Lenders), unless a final order has been entered by the Bankruptcy Court on or prior to such date. The outstanding principal amount of the DIP Loans will bear interest from the date of each loan’s disbursement at per annum rate equal to LIBOR plus twelve percent ( 12% ). Upon an event of default, all obligations under the DIP Credit Agreement will bear interest at a rate equal to then current interest rate applicable thereto plus two percent ( 2.0% ) per annum. |
Balance Sheet Account Detail
Balance Sheet Account Detail | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Account Detail | Balance Sheet Account Detail (a) Property and Equipment Property and equipment consisted of the following: June 30, December 31, Production equipment, molds and office furniture $ 10,937 $ 10,844 Computer hardware and software 7,907 7,897 Leasehold improvements 15,594 15,594 Construction in progress (software and related implementation, production equipment and leasehold improvements) 684 795 Property and equipment, at cost 35,122 35,130 Accumulated depreciation (23,284 ) (21,978 ) Property and equipment, net $ 11,838 $ 13,152 Depreciation expense for property and equipment for the three months ended June 30, 2020 and 2019 was $0.6 million and $0.9 million , respectively. For the six months ended June 30, 2020 and 2019, depreciation expense for property and equipment was $ 1.3 million and $ 1.8 million , respectively. (b) Inventories Inventories consisted of the following: June 30, December 31, Raw materials $ 5,480 $ 5,362 Work-in-process 4,916 4,132 Finished goods 15,512 16,911 Total Inventories $ 25,908 $ 26,405 (c) Goodwill and Other Intangible Assets The change in the carrying amount of goodwill for the six months ended June 30, 2020 was as follows: Balance at December 31, 2019 $ 120,814 Foreign currency translation adjustment 2 Balance at June 30, 2020 $ 120,816 Other intangible assets consisted of the following: June 30, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trademarks and trade names $ 2,708 N/A $ 2,708 $ 2,708 N/A $ 2,708 In-process research and development $ 11,200 N/A 11,200 11,200 N/A 11,200 Total indefinite-lived intangible assets 13,908 13,908 13,908 13,908 Finite-lived intangible assets: Developed technology 67,600 (14,647 ) 52,953 67,600 (13,467 ) 54,133 Customer relationships 7,500 (3,313 ) 4,187 7,500 (2,938 ) 4,562 Total finite-lived intangible assets 75,100 (17,960 ) 57,140 75,100 (16,405 ) 58,695 Other intangible assets, net $ 89,008 $ (17,960 ) $ 71,048 $ 89,008 $ (16,405 ) $ 72,603 Amortization expense for intangible assets for the three months ended June 30, 2020 and 2019 was $1.0 million and $0.9 million , respectively. For the six months ended June 30, 2020 and 2019, amortization expense for intangible assets was $1.6 million and $1.7 million , respectively. Estimated amortization expense for the 5 succeeding years and thereafter is as follows: Remainder of 2020 $ 1,629 2021 3,276 2022 3,319 2023 3,378 2024 3,497 2025 3,724 Thereafter 38,317 Total $ 57,140 (d) Fair Value Measurements The following fair value hierarchy table presents information about each major category of the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 : June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial liabilities: Contingently issuable common stock (a) $ — $ — $ 300 $ 300 $ — $ — $ 500 $ 500 Derivative liabilities (b) $ — $ — — — — — 940 940 Total financial liabilities $ — $ — $ 300 $ 300 $ — $ — $ 1,440 $ 1,440 (a) See Note 10 for additional details. (b) See Note 7 for additional details. Changes in the fair value of the Company’s Level 3 liabilities were as follows: Contingently issuable common stock Derivative liabilities Balance at December 31, 2019 $ 500 $ 940 Retirement due to debt extinguishment — (1,351 ) Additions — 12,916 Fair value adjustment (200 ) (12,505 ) Balance at June 30, 2020 $ 300 $ — (a) See Note 10 for additional details. (b) See Note 7 for additional details. There were no transfers of financial assets or liabilities into or out of Level 3 during the six months ended June 30, 2020 . Financial Instruments Not Recorded at Fair Value on a Recurring Basis The table below summarizes the carrying and fair values of the Company’s debt: June 30, 2020 December 31, 2019 Carrying value Fair value Carrying value Fair value Term loan facility $ 143,301 $ 115,765 $ 141,274 $ 131,892 Convertible notes 35,293 30,247 37,111 24,548 Other debt 14,093 11,169 4,281 1,416 $ 192,687 $ 157,181 $ 182,666 $ 157,856 The fair values of the Company’s debt are determined using Level 3 inputs, with the exception of the 3.25% Senior Notes, which are determined using Level 2 inputs. See Note 7 for further details. The carrying value of the Company’s Revolving loan facility approximates fair value. |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The table below summarizes the impact of recording stock-based compensation expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss during the six months ended June 30, 2020 and 2019 : Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cost of goods sold $ 158 $ 179 $ 322 $ 406 Operating expenses: Research and development 176 331 357 663 Clinical and regulatory affairs 162 187 329 373 Marketing and sales 117 685 416 1,394 General and administrative 309 1,141 1,232 2,048 Total operating expenses 764 2,344 2,334 4,478 Total $ 922 $ 2,523 $ 2,656 $ 4,884 |
Net Loss Per Share
Net Loss Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | Net Loss Per Share The Company computes earnings per share of its common stock and convertible preferred stock using the two-class method required for participating securities. The convertible preferred stock is considered a participating security because any dividends declared will be distributed among the holders of common stock and convertible preferred stock on a pro rata basis based on the number of shares of common stock held by each holder as of the dividend record date. The number of shares of common stock held by each holder will be determined on an as-converted to common stock basis, based on the then-effective Preferred Exchange Rate and without giving effect to the Ownership Cap (see Note 7). Further, the convertible preferred stock does not have a contractual obligation to share in the losses of the Company therefore its impact is excluded from the calculation of earnings per share in periods of net losses. Because of the net losses in the three and six months ended June 30, 2020 and 2019 , the following outstanding Company securities, using the treasury stock method, were excluded from the calculations of net loss per share because the effect would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Restricted stock awards 2,706 3,579 2,831 3,107 Restricted stock units 116,494 64,134 128,156 32,404 Warrants 1,522,002 1,522,002 1,522,002 1,522,002 Total 1,641,202 1,589,715 1,652,989 1,557,513 For purposes of calculating the maximum dilutive impact, it is presumed that the convertible notes will be settled in common stock, all conversion features within the term loan facility will be exercised and the convertible preferred stock will be converted into its common stock equivalent with the resulting potential common shares included in diluted earnings per share if the effect is more dilutive. The effect of the conversion of the convertible senior notes, term loan facility and convertible preferred stock is excluded from the calculation of diluted loss per share because the impact of these securities would be anti-dilutive. The potential dilutive effect of these securities is shown in the table below: Six Months Ended June 30, 2020 2019 Convertible notes 13,049,893 8,463,236 Conversion features under term loan facility 31,430,001 11,996,038 Convertible preferred stock 1,464,900 — The effect of the contingently issuable common stock (see Note 10 |
Credit Facilities
Credit Facilities | 6 Months Ended |
Jun. 30, 2020 | |
Line of Credit Facility [Abstract] | |
Credit Facilities | Credit Facilities The commencement of the Chapter 11 Cases constituted an event of default and caused the automatic and immediate acceleration of all debt outstanding under our various debt agreements. However, any efforts to enforce payment obligations under the debt agreements are automatically stayed as a result of the filing of the Chapter 11 Cases, and the creditors’ rights of enforcement in respect of the debt agreements are subject to the applicable provisions of the Bankruptcy Code. Further, in accordance with ASC 852, the Company stopped accruing interest on amounts owed under all debt agreements as of the Petition Date. Debt consisted of the following: June 30, December 31, Term loan facility $ 174,083 $ 167,858 Convertible notes 74,884 73,165 Other debt 14,093 4,281 Debt discounts and deferred financing costs (70,373 ) (62,638 ) Total debt 192,687 182,666 Deerfield Facility Agreement, as Amended On April 3, 2017 (the “Original Agreement Date”), the Company entered into a facility agreement with affiliates of Deerfield Management Company, L.P. (collectively, “Deerfield”), pursuant to which Deerfield agreed to loan to the Company up to $120.0 million (the “Term Loan”), subject to the terms and conditions set forth in the facility agreement (the “Original Facility Agreement”). The Company drew the entire principal amount of the Term Loan on the Original Agreement Date. The Company will be required to pay Deerfield on each of April 2, 2021, April 2, 2022 and April 2, 2023 (the “Maturity Date”), an amortization payment equal to 33.33% of the Term Loan outstanding on such date (or, if on the Maturity Date, the remaining outstanding principal amount of the Term Loan). On August 9, 2018 (the “Restated Agreement Date”), the Company entered into an Amended and Restated Facility Agreement (the “Restated Facility Agreement”) with Deerfield, pursuant to which Deerfield and the Company canceled and extinguished the $40.5 million principal amount of 3.25% Convertible Senior Notes due 2020 (the “ 3.25% Senior Notes”) held by Deerfield in exchange for an additional $40.5 million of Term Loan indebtedness under the Restated Facility Agreement (as a last-out waterfall tranche under the Restated Facility Agreement), the “Last Out Waterfall Notes”). Such amounts are being amortized 50% on April 2, 2022 and the remaining 50% on April 2, 2023. On November 18, 2018, the Company and Deerfield amended the Restated Facility Agreement pursuant to that certain First Amendment to Amended and Restated Facility Agreement, dated November 20, 2018 (the “First Facility Amendment”), which amendment permitted the Company to incur debt pursuant to its subordinated promissory note (the “JLL Note”) with Japan Lifeline Co., Ltd. (“JLL”), subject to certain conditions. On March 31, 2019, the Company and Deerfield entered into a Second Amendment to Amended and Restated Facility Agreement (the “Second Facility Amendment”). On April 3, 2019, the terms of the Second Facility Amendment became effective. The Second Facility Amendment provided for, among other things, the reduction in the Company’s global excess liquidity covenant from $22.5 million to $17.5 million and the reduction of the Company’s minimum net revenue financial covenants. In addition, the percentage of the $120.0 million of first out waterfall notes (the “First Out Waterfall Notes”) due on April 2, 2021 decreased from 33.33% to 16.67% of the First Out Waterfall Notes outstanding on such date, while the percentage of the remainder of the First Out Waterfall Notes due on April 2, 2022 remained at 50% of the First Out Waterfall Notes outstanding on such date. The Second Facility Amendment provided for the exchange of the existing notes representing the First Out Waterfall Loans for amended notes (the “First Out Waterfall Notes”) that provide that in the event that, in any calendar month beginning April 1, 2019 and ending June 30, 2020 (the “Mandatory Conversion Period”), if (A)(i) the arithmetic mean of the volume weighted average prices of the Company’s common stock (the “VWAP”) on the five ( 5 ) consecutive trading days ending on the 15th calendar day (or, if not a trading day, the first trading day thereafter) (the “Mandatory Conversion Measurement Date”) and (ii) the closing price for the Company’s common stock on the Mandatory Conversion Measurement Date, both exceed $6.625 (as may be adjusted to reflect certain events) (the “Fixed Conversion Price”) and (B)(i) the VWAP on the five ( 5 ) consecutive trading days ending on (and including) the third (3rd) trading day immediately prior to the Mandatory Conversion Measurement Date (the “Initial Mandatory Conversion Measurement Date”) and (ii) the closing price for the Company’s common stock on the Initial Mandatory Conversion Measurement Date both exceed the Fixed Conversion Price, Deerfield shall be obligated to convert $1,666,666 of the principal amount of the loan into shares of common stock at the Fixed Conversion Price (each, a “Deerfield Mandatory Conversion”), up to a maximum aggregate amount of $25.0 million over the Mandatory Conversion Period (the “Mandatory Conversion Feature”). Further, the Second Facility Amendment also provided for an increase of $5.0 million, from $6.1 million to $11.1 million , in the amounts payable to Deerfield as a fee upon termination (or reduction, or required reduction of the outstanding amounts under the First Out Waterfall Notes to less than $10,000,000 ) of the facility agreements and to reimburse Deerfield for all expenses incurred by Deerfield in connection with the negotiation and documentation of the Second Facility Amendment. The terms of the Second Facility Amendment became effective on April 3, 2019 upon satisfaction of certain conditions precedent, including consummation of the purchase and sale of an aggregate of 7,889,552 shares of the Company’s common stock (the “Equity Shares”) to select institutional investors and certain other parties at a price per share of $6.61 (the “Equity Offering Price”), for an aggregate cash purchase price of approximately $52.15 million . The Company has issued the Deerfield Warrants and the First Out Waterfall Notes contemplated by the Second Facility Amendment. On February 24, 2020, the Company and Deerfield entered into a February 2020 Exchange Agreement and Fourth Amendment (the “Fourth Facility Amendment”) to Amended and Restated Facility Agreement and Amendment to First Out Waterfall Notes (as amended to date, the “Fourth Facility Agreement”) and collectively with the Restated Facility Agreement, First Facility Amendment and Second Facility Amendment, the “Deerfield Facility Agreements”). The Fourth Facility Amendment provides for, among other things, the conversion of certain portions of the outstanding convertible debt upon the achievement of certain milestones. In addition, 16.67% of the First Out Waterfall Notes currently due on the first amortization date of April 2, 2021 (the “First Amortization Payment”) will be extended to July 1, 2021. The Fourth Facility Amendment also provided for further modifications of the amortization schedule upon the satisfaction of certain conditions. During the second quarter ended June 30, 2020, the Company did not meet these conditions. Further, the Fourth Facility Agreement provides that the interest payment date due April 1, 2020 will be payable in paid-in-kind interest by increasing the principal amount of the loans by an amount equal to the interest that has accrued. The Fourth Facility Amendment provided for the exchange of the existing notes representing the First Out Waterfall Notes for amended notes (the “Amended First Out Waterfall Notes”). The Amended First Out Waterfall Notes provide that the Company may require Deerfield to convert up to $40.0 million of principal amount (the “Forced Conversion Cap”) provided that the arithmetic average of the volume weighted average price of the Company’s common stock on each of the fifteen (15) consecutive trading days ending on the conversion date (the “Forced Conversion 15 Day VWAP”), and the closing price on the conversion date, is greater than 200% of the Fixed Conversion Price into shares of the Company’s newly created Series DF-1 Preferred Stock, par value $0.001 per share (the “Preferred Stock”), at a price per share equal to the product of (i) the Preferred Exchange Rate (as defined below) and (ii) and 85% of the lesser of the closing price of the common stock on such conversion date (the “Closing Price”) and the Forced Conversion 15 Day VWAP, provided that such lesser price is greater than or equal to 170% of the Fixed Conversion Price and other conditions are met (each such conversion, a “Forced Conversion”). A Forced Conversion may only occur once every 31 calendar days and any individual Forced Conversion may not exceed the lesser of (i) $3.5 million or (ii) the Forced Conversion Cap less any prior Forced Conversions or Discretionary Conversions (as defined below). The Amended First Out Waterfall Notes also provided for other exchange features and a reduction of the Fixed Conversion Price upon satisfaction of certain conditions. During the second quarter ended June 30, 2020, the Company did not meet these conditions. The Fourth Facility Amendment also removed the Mandatory Conversion Feature. Deerfield also has the option to convert up to $60.0 million (less any amounts converted pursuant to Forced Conversions) of the Company’s outstanding debt (any such conversion, a “Discretionary Conversion”) into, at Deerfield’s option and subject to the Ownership Cap (as defined below), shares of Common Stock at a rate equal to the greater of the New Fixed Conversion Price and 85% of the 15 Day VWAP, provided that such conversion price is not less than the Floor Price (as defined below) (the “Discretionary Common Conversion Rate”) or shares of Preferred Stock at a rate (the “Discretionary Preferred Conversion Rate”) equal to the product of (i) the Preferred Exchange Rate (as defined below) multiplied by (ii) the Discretionary Common Conversion Rate. The Preferred Stock is convertible into common stock at an initial rate of 100 shares of common stock for each share of Preferred Stock, as may be adjusted pursuant to the Certificate of Designation of Preferences, Rights and Limitations of Series DF-1 Preferred Stock (the “Certificate of Designation”) (the “Preferred Exchange Rate”). Pursuant to the Certificate of Designation, 1,150,000 shares of Preferred Stock have been authorized for issuance and shall be designated from the 5,000,000 shares of preferred stock authorized to be issued under the Amended and Restated Certificate of Incorporation. The Preferred Stock does not possess any voting rights. The Preferred Stock is subject to customary adjustments for stock events. The Preferred Stock provides that in no event may Deerfield convert the Preferred Stock into shares of common stock if such conversion would result in Deerfield beneficially owning more that 4.985% of the Company’s outstanding common stock (the “Ownership Cap”). Upon voluntary or involuntary liquidation, holders are entitled to receive the Liquidation Amount ( $0.001 per share) plus dividends declared but unpaid, and thereafter participate with the common stock on an as converted basis. There are no deemed liquidation provisions contemplated by the Certificate of Designation. The Amended First Out Waterfall Notes also revises Deerfield’s existing right to convert a portion of the outstanding principal amount of the first-out waterfall loan into a maximum of 1,430,001 shares of the Company’s common stock at the current conversion price to Deerfield may, at its option, convert into 1,430,001 shares of common stock at the Discretionary Common Conversion Rate, or the equivalent number of shares of Preferred Stock at the Discretionary Preferred Conversion Rate. Further, the Fourth Facility Amendment also provides, upon signing, the Company shall pay a restructuring fee of $2.0 million in cash or a combination of shares of common stock at the Floor Price and shares of Preferred Stock at a rate equal to the product of the Floor Price multiplied by the Preferred Exchange Rate. The Company elected to satisfy the fee by issuing 950,000 shares of common stock and 14,649 shares of Preferred Stock at signing. The Company evaluated the accounting for Fourth Facility Amendment transaction and determined it represented an extinguishment of the previously issued First Out Waterfall Notes under the Second Facility Amendment, primarily due to the addition and significance of the conversion features as described above. During the six months ended June 30, 2020 , the Company recorded a loss on debt extinguishment of $3.4 million , which includes the $2.0 million restructuring fee paid in common stock and Preferred Stock and change in fair value of the Deerfield Warrants of $0.5 million , offset by the removal of $1.4 million of derivative liabilities associated with the debt prior to the transaction. Any outstanding principal under the Deerfield Facility Agreements will accrue interest at a rate equal to 5.00% payable in cash and 4.75% payable in kind. The Deerfield Facility Agreements contain the same operating covenants applicable to First Credit Amendment. The Company’s obligations under the Deerfield Facility Agreements are secured by a first priority security interest in substantially all of the Company’s assets including intellectual property, with the priority of such security interest being pari passu with the security interest granted to Deerfield pursuant to the Restated Credit Agreement. During the six months ended June 30, 2020 , the Company did not convert any principal amounts of the First Out Waterfall Notes into shares of common stock pursuant to Deerfield Mandatory Conversions. As of June 30, 2020 , the Company had a carrying amount of $143.3 million , inclusive of deferred financing costs of $2.1 million , related to the Term Loan. As of June 30, 2020 , annual interest expense on the Term Loan will range from $5.8 million to $38.2 million from the effectiveness of the Fourth Facility Amendment date through maturity. Upon a change of control of the Company, if the acquirer satisfies certain conditions set forth in the Deerfield Facility Agreements, such acquirer may assume the outstanding principal amount under the Deerfield Facility Agreements without penalty. If such acquirer does not satisfy the conditions set forth in the Deerfield Facility Agreements, Deerfield may, at its option, require the Company to repay the outstanding principal balance under the Facility Agreement plus, depending on the timing of the change of control transaction, the Company may be required to pay a make-whole premium and will be required to pay a change of control fee. At any time on or after April 2, 2021 (the “First Amortization Date”), the Company has the right to prepay any amounts owed under the Deerfield Facility Agreements without premium or penalty, unless such prepayment occurs in connection with a change of control of the Company, in which case the Company must pay Deerfield a change of control fee unless such change of control occurs beyond a certain period after the maturity date. At any time prior to the First Amortization Date, any prepayment made by the Company will be subject to a make-whole premium and, if such prepayment occurs in connection with a change of control of the Company, a change of control fee. Any amounts drawn under the Deerfield Facility Agreements may become immediately due and payable upon customary events of default, as defined in the Deerfield Facility Agreements, or the consummation of certain change of control transactions, as described above. Deerfield Warrants In connection with the execution of the Original Facility Agreement and the Restated Facility Agreement, the Company issued warrants to Deerfield (the “Original 2017 Deerfield Warrants” and the “Original 2018 Deerfield Warrants,” respectively). In connection with entry into the Second Facility Amendment, the Company amended the Original 2017 Deerfield Warrants and the Original 2018 Deerfield Warrants in order to reduce the exercise price, which was further reduced by the Fourth Facility Amendment (as amended, the “2017 Deerfield Warrants” and the “2018 Deerfield Warrants”; collectively, the “Deerfield Warrants”) as summarized below: Number of shares of common stock Original Exercise Price Second Amendment Exercise price 2017 Deerfield Warrants 647,001 $ 92.31 $ 6.61 2018 Deerfield Warrants 875,001 $ 47.11 $ 6.61 The number of shares of common stock of the Company into which the Deerfield Warrants are exercisable and the exercise price of the Deerfield Warrants will be adjusted to reflect any stock splits, recapitalizations or similar adjustments in the number of outstanding shares of common stock of the Company. The 2017 Deerfield Warrants expire on the 7 th anniversary of the Agreement Date. Subject to certain exceptions, the 2017 Deerfield Warrants contain limitations such that the Company may not issue shares of common stock of the Company to Deerfield upon the exercise of the 2017 Deerfield Warrants if such issuance would result in Deerfield beneficially owning in excess of 4.985% of the total number of shares of common stock of the Company then issued and outstanding. The holders of the 2017 Deerfield Warrants may exercise the 2017 Deerfield Warrants for cash, on a cashless basis or through a reduction of an amount of principal outstanding under the Term Loan. In connection with certain major transactions, the holders may have the option to convert the 2017 Deerfield Warrants, in whole or in part, into the right to receive the transaction consideration payable upon consummation of such major transaction in respect of a number of shares of common stock of the Company equal to the Black-Scholes value of the 2017 Deerfield Warrants, as defined therein, and in the case of other major transactions, the holders may have the right to exercise the 2017 Deerfield Warrants, in whole or in part, for a number of shares of common stock of the Company equal to the Black-Scholes value of the 2017 Deerfield Warrants. The 2018 Deerfield Warrants expire on the 7 th anniversary of the Restated Agreement Date. The holders of the 2018 Deerfield Warrants may exercise the 2018 Deerfield Warrants for cash, on a cashless basis, or by reduction of the principal owed to Deerfield pursuant to the Restated Facility Agreement. As a result of the amendment to the Deerfield Warrants in connection with entry into the Fourth Facility Amendment, the change in fair value in the Deerfield Warrants was $0.5 million . The foregoing was charged to loss on debt extinguishment. Derivative Liabilities In accordance with Accounting Standards Codification (“ASC”) 815, “Derivatives and Hedging”, and ASC 470, “Debt”, the Company assessed whether any provisions within the Fourth Facility Amendment constitute embedded derivatives requiring bifurcation from the host instrument, and assessed the fair values of any such features. The Company determined that the Deerfield Discretionary Conversion, Nellix Exchanges and 18 Months Interest Exchange effectively provided the holders with embedded put option derivatives meeting the definition of an “embedded derivative” pursuant to ASC 815. Consequently, the embedded derivatives were bifurcated and accounted for separately. The Fourth Facility Amendment retained a provision that, upon a change of control of the Company, Deerfield may declare the outstanding principal of the loans to be immediately due and payable in full, together with any accrued and unpaid interest, a “Change of Control” fee, and a specified make-whole amount (prior to the First Amortization Date). This feature remained substantively the same as outlined under the previous Second Facility Amendment. The Company concluded that this provision meets the definition of a derivative and requires bifurcation and separate accounting pursuant to ASC 815. On February 24, 2020, the Company measured the fair value of the above embedded derivatives at $12.0 million and recorded the amount within accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheet. For the three and six months ended June 30, 2020 , the Company recorded income of $ 2.3 million and $ 12.5 million respectively. For the three and six months ended June 30, 2019 , the Company recorded income of $ 0.9 million and expense of $ 1.2 million , respectively, as a fair value adjustment of the derivative liabilities. Adjustments to the fair value of the derivative liabilities are recognized within other income (expense), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. The value of the above derivative liabilities were estimated using a “with” and “without” approach utilizing observable and unobservable inputs causing this to be a Level 3 measurement. In the “with” scenario, the fair value the Deerfield notes host instrument was estimated, including the cash flows resulting from the bifurcated embedded derivatives. In the “without” scenario the value of the Deerfield notes host instrument absent the embedded derivatives were estimated. The difference between the values estimated in the “with” and “without” scenarios represents the value of the derivative liabilities. In each approach, the Deerfield notes host instrument was valued using a Monte Carlo simulation in a risk-neutral framework, simulating future stock prices using Geometric Brownian Motion. Changes in the value of the derivative liabilities were primarily driven by changes in the Company’s stock price, expected volatility, and market yields. Deerfield Revolver On the Restated Agreement Date, the Company entered into a Credit Agreement (the “Restated Credit Agreement”) with Deerfield ELGX Revolver, LLC (“Deerfield Revolver”), pursuant to which the Company may borrow up to the lesser of $50.0 million or its applicable borrowing base from time to time prior to April 2, 2022 (the “ABL Facility”). On November 18, 2018, the Company and Deerfield amended the Restated Credit Agreement pursuant to that certain First Amendment to Amended and Restated Credit Agreement, dated November 20, 2018 (“First Credit Amendment”), which amendment permitted the Company to incur debt pursuant to the JLL Note, subject to certain conditions. On March 31, 2019, the Company entered into a Second Amendment to Credit Agreement and First Amendment to Guaranty and Security Agreement (the “Second Credit Amendment” and collectively with the Restated Credit Agreement and First Credit Amendment, the “Deerfield Credit Agreements”). The Second Credit Amendment includes conforming revisions to reflect the changes in the Second Facility Amendment. In addition, the Second Credit Amendment extends the maturity date of the Deerfield Credit Agreements to the earlier of (i) April 2, 2023 or (ii) the date the loans pursuant to the Deerfield Facility Agreements have been repaid in full. On February 24, 2020, the Company entered into a Fourth Amendment to Credit Agreement (the “Fourth Credit Amendment”) with Deerfield Revolver and certain funds managed by Deerfield Management Company, L.P., dated as of August 9, 2018. The Fourth Credit Amendment includes conforming revisions to reflect the changes in the Fourth Facility Amendment. In addition, the Fourth Credit Amendment provides that if the Company satisfies the Maturity Extension Conditions, the credit agreement maturity date will extend to the earlier of (i) December 22, 2023 or (ii) the date the loans pursuant to the Facility Agreement have been repaid in full. The borrowing base consists of eligible accounts, eligible inventory and eligible equipment. Any outstanding principal under the ABL Facility will accrue interest at a rate equal to the London Interbank Offered Rate (“LIBOR”) (with a 1% floor) plus 5.50% payable in cash. The interest rate will accrue on a minimum amount of $9.75 million , whether or not such amount is drawn (which amount in excess of the revolver usage accruing interest will not be subject to the unused line fee). The Company is subject to other fees in addition to interest on the outstanding principal amount under the ABL Facility, including a commitment fee of $0.5 million ( $0.2 million payable upon closing, $0.2 million payable on the 1st anniversary of the closing and $0.1 million payable on the 2nd anniversary of the closing), a $1.0 million fee upon the expiration of the ABL Facility, and an early commitment termination or reduction fee of 2.5% in the 1st year, 1.5% in the 2nd year, 0.5% in the 3rd year and 0% thereafter. The Company recorded $0.6 million in deferred financing costs, including the commitment fee, related to the ABL Facility and presented these costs as a deferred asset, to be subsequently amortized as interest expense over the term of the ABL Facility, on the Company’s Condensed Consolidated Balance Sheets. In conjunction with entering in the Second Credit Amendment, the Company recorded as additional $0.4 million in deferred financing costs. The Deerfield Credit Agreements have a $17.5 million minimum global liquidity requirement, net revenue tests, fixed charge coverage, capital expenditure limitations and operating expense tests. No event of default with respect the Company’s financial covenants had been declared as of June 30, 2020 . The Deerfield Credit Agreements also contain various representations and warranties, events of default, and affirmative and negative covenants, customary for financings of this type, including reporting requirements, requirements that the Company maintain timely reporting with the SEC and restrictions on the ability of the Company and its subsidiaries to incur additional liens on their assets, incur additional indebtedness and acquire and dispose of assets outside the ordinary course of business. The Company’s obligations under the Deerfield Credit Agreements are secured by a first priority security interest in substantially all of the Company’s assets including intellectual property, with the priority of such security interest being pari passu with the security interest granted to Deerfield pursuant to the Company’s Deerfield Facility Agreements (as described above). As of June 30, 2020 , the Company had $ 0.0 million outstanding borrowings and $ 0.6 million in deferred financing costs relating to the Deerfield Credit Agreements. 3.25% Convertible Senior Notes due 2020 On November 2, 2015, the Company issued $125.0 million aggregate principal amount of 3.25% Senior Notes in an underwritten public offering. The 3.25% Senior Notes are governed by a base indenture (“Base Indenture”), as amended and supplemented by the second supplemental indenture relating to the 3.25% Senior Notes (the “Second Supplemental Indenture,” and together with the Base Indenture, the “ 3.25% Senior Notes Indenture”), dated as of November 2, 2015, by and between the Company and the Trustee (as defined therein). The 3.25% Senior Notes accrue interest at a rate of 3.25% per year, payable semi-annually. The 3.25% Senior Notes mature on November 1, 2020, unless earlier purchased, redeemed or converted into shares of common stock in accordance with the terms of the 3.25% Senior Notes Indenture. On August 9, 2018, the Company entered into the Restated Facility Agreement with Deerfield, pursuant to which Deerfield and the Company canceled and extinguished the $40.5 million principal amount of the 3.25% Senior Notes held by Deerfield in exchange for an additional $40.5 million of indebtedness under the Restated Facility Agreement (as a last-out waterfall tranche under the Restated Facility Agreement). On March 31, 2019, the Company and two investors holding $73.4 million of the principal amount of the 3.25% Senior Notes entered into an Exchange Agreement (the “2019 Exchange Agreement”) providing for the exchange of the holders’ 3.25% Senior Notes for new 5.00% Voluntary Convertible Senior Notes due 2024 (the “2019 5.00% Voluntary Notes”) and new 5.00% Mandatory Convertible Senior Notes due 2024 (the “ 5.00% Mandatory Notes”, and together with the 2019 5.00% Voluntary Notes, the “2019 5.00% Notes”) which was completed on April 3, 2019. On February 24, 2020, the Company and three investors holding $11.0 million of the principal amount of the Company’s 3.25% Senior Notes entered into an Exchange Agreement (the “2020 Exchange Agreement”) providing for the exchange of the holders’ existing notes for new 5.00% Voluntary Convertible Senior Notes due 2024 (the “2020 5.00% Voluntary Notes”). As of June 30, 2020 , the Company had outstanding borrowings of $0.1 million related to the remaining 3.25% Senior Notes. There were no principal payments due during the term. 2020 5.00% Convertible Senior Notes due 2024 On February 24, 2020, the Company and three investors holding approximately $11.0 million of the principal amount of the Company’s 3.25% Senior Notes due 2020 (the “Holders”) entered into an Exchange Agreement (the “2020 Exchange Agreement”) providing for the exchange of the Holders’ existing notes (the “Existing Notes”) for new 5.00% Voluntary Convertible Senior Notes due 2024 (the “2020 5.00% Voluntary Notes”). Pursuant to the 2020 Exchange Agreement, on February 24, 2020, the exchanging Holders are exchanging all outstanding principal plus accrued and unpaid interest under the Existing Notes into the same amount of principal of 2020 5.00% Voluntary Notes pursuant to the 2020 Exchange Agreement. The 2020 5.00% Voluntary Notes are being issued in a transaction exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”) by virtue of Section 4(a)(2) of the Securities Act and Rule 506 thereunder. The 2020 5.00% Voluntary Notes will be governed by an Indenture (the “2020 Indenture”), by and between the Company and Wilmington, as trustee. The 2020 5.00% Voluntary Notes will accrue interest at a rate of 5.00% per year, payable semi-annually in arrears on April 1 and October 1 of each year, commencing April 1, 2020. The 2020 5.00% Voluntary Notes will mature on April 2, 2024, unless earlier purchased, redeemed or converted in accordance with the terms of the 2020 Indenture. The 2020 Indenture governing the 2020 5.00% Voluntary Notes will contain customary terms and covenants and events of default. The 2020 5.00% Voluntary Notes will be convertible at the option of each Holder into shares of common stock at any time prior to the close of business on the business day immediately preceding January 1, 2024; provided that, except if the Company undergoes a fundamental change (as defined in the 2020 Indenture) and for certain other customary circumstances of conversion, each Holder may not convert more than 30% the initial aggregate principal amount of its outstanding 2020 5.00% Voluntary Notes per calendar quarter (a “2020 Voluntary Conversion”). Beginning January 1, 2024, until the close of business on the business day immediately preceding the maturity date, the 2020 5.00% Voluntary Notes will be convertible at the option of the holder at any time regardless of the conditions described in this paragraph. The initial conversion rate of the 2020 5.00% Voluntary Notes in a 2020 Voluntary Conversion is 0.4445 shares of the Company’s common stock per $1.00 principal amount of the 2020 5.00% Voluntary Notes, which is equivalent to an initial conversion price per share equal to $2.25 (the “2020 Conversion Price”). The conversion rate is subject to adjustment upon the occurrence of certain specified events. Except if the Company undergoes a fundamental change (as defined in the 2020 Indenture) and for certain other customary circumstances of conversion, in no event prior to the close of business on the business day immediately preceding January 1, 2024 may the 2020 5.00% Voluntary Notes be converted in a calendar quarter unless the closing sale price of the Company’s common stock for at least twenty (20) trading days during the period of thirty (30) consecutive trading days ending on the last trading day of the immediately preceding calendar quarter is greater than or equal to 110% of the Conversion Price (subject to adjustment upon the occurrence of certain specified events) (the “2020 Voluntary Conversion Threshold”). The 2020 5.00% Voluntary Notes will be secured by the Company’s assets pursuant to a Junior Lien Security Agreement by and between the Company and Wilmington, as collateral agent (the “JLSA”). The JLSA grants a second lien on the Company’s assets that is second in priority to the security interests granted (i) |
Revenue Disaggregation
Revenue Disaggregation | 6 Months Ended |
Jun. 30, 2020 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
Revenue Disaggregation | Revenue Disaggregation The Company disaggregated revenue in accordance with the new revenue standard to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. These economic factors are primarily attributable to different geographic regions and the timing of transfer of control of products to customers. Accordingly, sales in which control of the product has passed to the customer at the time of procedure or implant into a patient or at the time of shipment have been bifurcated as “Implant-based” and “Shipment-based” revenue, respectively. The tables below include a reconciliation of disaggregated revenue with the Company’s reportable segment: Three Months Ended June 30, 2020 2019 Implant-based Shipment-based Total Implant-based Shipment-based Total United States $ 13,755 $ 475 $ 14,230 $ 23,507 $ 506 $ 24,013 International $ 2,040 $ 8,571 $ 10,611 $ 3,237 $ 8,988 $ 12,225 Total Revenue $ 15,795 $ 9,046 $ 24,841 $ 26,744 $ 9,494 $ 36,238 Six Months Ended June 30, 2020 2019 Implant-based Shipment-based Total Implant-based Shipment-based Total United States $ 32,078 $ 781 $ 32,859 $ 45,969 $ 829 $ 46,798 International $ 5,032 $ 15,460 $ 20,492 $ 7,044 $ 18,002 $ 25,046 Total Revenue $ 37,110 $ 16,241 $ 53,351 $ 53,013 $ 18,831 $ 71,844 |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Leases The Company determines whether an arrangement is a lease at inception. The Company leases facilities located in Irvine, California and Santa Rosa, California and an office located in ‘s-Hertogenbosch, the Netherlands. These facility lease agreements require the Company to pay variable operating costs, including property taxes, insurance and maintenance based on costs incurred or actual usage. The Company’s facility leases do not contain any residual value guarantees. In addition, the Company has certain equipment and automobiles under long-term agreements that were not material for the three and six months ended June 30, 2020 . All facility leases are accounted for as operating leases. A right-of-use asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company primarily uses its incremental borrowing rate in determining the present value of lease payments as the Company's facility leases generally do not provide an implicit rate. The Company’s facility leases have remaining lease terms ranging from less than 3 years to 9 years , some of which include options to extend the lease term for up to five years . For the three months ended June 30, 2020 , components of facility lease costs consist of $0.8 million in operating lease expense and $0.2 million in variable lease costs. For the six months ended June 30, 2020 , components of facility lease costs consist of $1.6 million in operating lease expense and $0.4 million in variable lease costs. Maturities of facility lease liabilities by fiscal year for our operating leases are as follows as of June 30, 2020 : Remainder of 2020 $ 1,677 2021 4,078 2022 3,861 2023 2,950 2024 2,849 2025 2,905 2026 and thereafter 9,432 Total lease payments $ 27,752 Less: Imputed Interest (14,625 ) Present value of operating lease liabilities $ 13,127 In April 2020, the FASB issued a Staff Question-and-Answer to clarify whether lease concessions related to the effects of COVID-19 require the application of the lease modification guidance under the new lease standard, which we adopted on January 1, 2019. On April 30, 2020, the Company entered into a rent deferral agreement on its Irvine facility lease as a result of the COVID-19 pandemic. The Company has elected the practical expedient to account for COVID - 19 related rent concessions as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. As of June 30, 2020, rent deferrals of $0.2 million were recorded as deferred rent within the accrued expenses and other liabilities in the Company’s consolidated balance sheets. As of June 30, 2020 , the current portion of the Company’s operating lease liabilities was $2.0 million and is classified within accrued expenses and other current liabilities in the Company’s Consolidated Balance Sheets. As of June 30, 2020 , the weighted-average remaining lease term was 7.4 years and weighted-average discount rate was 22.1% . (b) Employment Agreements and Retention Plan The Company has employment agreements with certain of its executive officers under which payment and benefits would become payable in the event of termination by the Company for any reason other than cause, death or disability or termination by the employee for good reason (collectively, an “Involuntary Termination”) prior to, upon or following a change in control of the Company. The severance payment will generally be in a range of 6 to 18 months of the employee’s then current salary for an Involuntary Termination prior to a change in control of the Company, and will generally be in a range of 18 to 24 months of the employee’s then current salary for an Involuntary Termination upon or following a change in control of the Company. (c) Legal Matters The Company is from time to time involved in various claims and legal proceedings of a nature it believes is normal and incidental to a medical device business. These matters may include product liability, intellectual property, employment, and other general claims. Such cases and claims may raise complex factual and legal issues and are subject to many uncertainties, including, but not limited to, the facts and circumstances of each particular case or claim, the jurisdiction in which each suit is brought, and differences in applicable law. The Company accrues for contingent liabilities when it is probable that a liability has been incurred and the amount can be reasonably estimated. The accruals are adjusted periodically as assessments change or as additional information becomes available. Stockholder Securities Litigation On January 3, 2017 and January 9, 2017, two stockholders purporting to represent a class of persons who purchased the Company’s securities between August 2, 2016 and November 16, 2016, filed lawsuits against the Company and certain of its officers in the United States District Court for the Central District of California (the “District Court”). The lawsuits allege that the Company made materially false and misleading statements and failed to disclose material adverse facts about its business, operational and financial performance, in violation of federal securities laws, relating to United States Food and Drug Administration (the “FDA”) pre-market approval for the Company’s Nellix EVAS System. On May 26, 2017, the plaintiffs filed an amended complaint extending the class period to include persons who purchased the Company’s securities between May 5, 2016 and May 18, 2017 and adding certain factual assertions and allegations regarding the Nellix EVAS System. The plaintiffs sought unspecified monetary damages on behalf of the alleged class, interest, and attorney’s fees and costs of litigation. The first lawsuit, Nguyen v. Endologix, Inc. et al., Case No. 2:17-cv-0017 AB (PLAx) (C.D. Cal.) (“Nguyen”), was consolidated with the second lawsuit, Ahmed v. Endologix, Inc. et al, Case No. 8:17-cv-00061 AB (PLAx) (C.D. Cal.), and lead Nguyen plaintiff filed a consolidated First Amended Complaint. On December 5, 2017, the District Court granted Endologix’s motion to dismiss lead plaintiff’s First Amended Complaint, with leave to amend. On January 9, 2018, lead plaintiff filed a Second Amended Complaint and on March 12, 2018, the Company filed its Motion to Dismiss lead plaintiff’s Second Amended Complaint with prejudice. On September 6, 2018, the District Court dismissed the Second Amended Complaint with prejudice and, on October 5, 2018, lead plaintiff filed a notice of appeal, and on March 15, 2019, lead plaintiff filed its opening brief with the appellate court. In April 2019, the Company filed its response brief to plaintiff’s appeal. The Appellate Court’s hearing on the appeal occurred in February 2020, and the Appellate Court affirmed the District Court’s dismissal of the Second Amended Complaint. The Company believes these lawsuits are without merit and continues to defend itself vigorously. Stockholder Derivative Litigation As of June 11, 2017, four stockholders have filed derivative lawsuits seeking unspecified monetary damages on behalf of Endologix, the nominal plaintiff, based on allegations substantially similar to those alleged by lead plaintiff in Nguyen. Those actions consist of: Sindlinger v. McDermott et al., Case No. BC662280 (Los Angeles Superior Court); Abraham v. McDermott et al., Case No. 30-2018-00968971-CU-BT-CSC (Orange County Superior Court); and Green v. McDermott et al., Case No. 8:17-cv-01155-AB (PLAx), which has been consolidated with Cocco v. McDermott et al., Case No. 8:17-cv-01183-AB (PLAx) (C.D. Cal.). The Company believes these lawsuits are without merit and continues to defend itself vigorously. (e) Concentrations of Risk and Major Customer For the three and six months ended June 30, 2020 and 2019 , there was one customer that represented 10% or more of consolidated revenue. As of December 31, 2019 , there was one customer that represented 10% or more of consolidated accounts receivable. |
Contingently Issuable Common St
Contingently Issuable Common Stock | 6 Months Ended |
Jun. 30, 2020 | |
Business Combinations [Abstract] | |
Contingently Issuable Common Stock | Contingently Issuable Common Stock On October 27, 2010, the Company entered into an Agreement and Plan of Merger and Reorganization (the “Merger Agreement”) with Nepal Acquisition Corporation, a wholly-owned subsidiary of the Company, Nellix, Inc. (“Nellix”), certain of Nellix’s stockholders named therein and Essex Woodlands Health Ventures, Inc., as representative of the former Nellix stockholders. On December 10, 2010 (the “Nellix Closing Date”), the Company completed its acquisition of Nellix. The purchase price consisted of shares of the Company’s common stock issuable as of the Nellix Closing Date. Additional payments, solely in the form of shares of the Company’s common stock will be made upon the achievement of a revenue milestone and a regulatory approval milestone (collectively, the “Nellix Milestones”). Under the Merger Agreement, the ultimate value of the contingently issuable common stock would be determined on the date that each Nellix Milestone is achieved. The number of issuable shares would be established using an applicable per share price, which is subject to a ceiling and/or floor, resulting at the closing of the merger in a potential maximum of approximately 1,020,000 shares issuable upon the achievement of the Nellix Milestones. As of the Closing Date, the fair value of the contingently issuable common stock was estimated to be $ 28.2 million . The Merger Agreement provides that, in addition to the shares of common stock of the Company issued to the former Nellix stockholders at the Nellix Closing Date, if the Company receives approval from the FDA to sell one of Nellix’s products in the United States (the “PMA Milestone”), the Company will issue additional shares of its common stock to the former stockholders of Nellix. The dollar value of the shares of the Company’s common stock to be issued upon achievement of the PMA Milestone will be equal to $15.0 million (less the dollar value of certain cash payments and other deductions). The price per share of the shares of the Company’s common stock to be issued upon achievement of the PMA Milestone is subject to a stock price floor of $45.00 per share but not subject to a stock price ceiling. The value of the contingently issuable common stock is derived using a discounted income approach model, with a range of probabilities and assumptions related to the timing and likelihood of achievement of the PMA Milestone (which include Level 3 inputs and the Company’s stock price (Level 1 input) as of the balance sheet date). These varying probabilities and assumptions and changes in the Company’s stock price have required fair value adjustments of the contingently issuable common stock in periods subsequent to the Nellix Closing Date. The fair value of the contingently issuable common stock will continue to be evaluated on a quarterly basis until milestone achievement occurs, or until the expiration of the “Earn-Out Period,” as defined within the Merger Agreement. Adjustments to the fair value of the contingently issuable common stock are recognized within other income (expense), net in the Condensed Consolidated Statements of Operations and Comprehensive Loss. See the “Fair Value Measurements” section of Note 4 for further details. As of June 30, 2020 , the fair value of the contingently issuable common stock was presented in non-current liabilities. At June 30, 2020 the Company’s stock price closed at $0.80 per share. Thus, had the PMA Milestone been achieved on June 30, 2020 the contingently issuable common stock would have comprised approximately 333,149 shares (based on the 30 - day average closing stock price ending 5 days prior to the announcement, subjected to the stock price floor of $45.00 per share), representing a value of $0.3 million . |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company applied an estimated annual effective tax rate (“ETR”) approach for calculating a tax provision for interim periods. The Company recorded a provision for income taxes of 46 thousand and a tax benefit of 3.3 million for the three months ended June 30, 2020 and 2019 , respectively. The Company recorded a provision for income taxes of 73 thousand and a tax benefit of 3.2 million for the six months ended June 30, 2020 and 2019 , respectively. The Company’s ETR was (0.18)% and 10.7% for the three months ended June 30, 2020 , and 2019 , respectively. The Company’s ETR was (0.17)% and 6.14% for the six months ended June 30, 2020 and 2019 ,, respectively. The Company’s ETR for the three and six months ended June 30, 2020 differs from the U.S. federal statutory tax rate of 21% primarily as a result of nondeductible expenses (including the Nellix contingently issuable common stock), state income taxes, foreign income taxes, and the impact of a full valuation allowance on its deferred tax assets. The Company has evaluated the available evidence supporting the realization of its deferred tax assets, including the amount and timing of future taxable income, and has determined that it is more likely than not that the domestic and foreign deferred tax assets will not be realized. Due to such uncertainties surrounding the realization of the domestic and foreign deferred tax assets, the Company maintained a valuation allowance against a substantial portion of its deferred tax assets as of June 30, 2020 . If and when the Company determines that it will be able to realize some portion or all of its deferred tax assets, an adjustment to its valuation allowance on its deferred tax assets would have the effect of increasing net income in the period(s) such determination is made. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. ASU 2019-12 simplifies the accounting for income taxes by eliminating certain exceptions to the guidance in ASC 740 related to the approach for intraperiod tax allocation, the methodology for calculating incomes taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. ASU 2019-12 is effective in 2021 and interim periods within that year, and permits for early adoption. The Company elected to early adopt ASU 2019-12, effective for the quarter ended March 31, 2020, on a prospective approach. Therefore, the Company is no longer applying the exception to the intraperiod tax allocation rules which used to apply when the Company had pre-tax book losses in continuing operations and gains in other components of income. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic. The CARES Act, among other things, permits NOL carryovers and carrybacks to offset 100% of taxable income for taxable years beginning before 2021. In addition, the CARES Act allows NOLs incurred in 2018, 2019, and 2020 to be carried back to each of the five preceding taxable years to generate a refund of previously paid income taxes. The CARES Act also contained modifications on the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. The Company is currently evaluating the impact of the CARES Act, but at present does not expect that the provisions of the CARES Act would result in a material impact on the financial statement. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Debtor-In-Possession Financing To ensure sufficient liquidity throughout the Chapter 11 Cases, we obtained a $130.8 million DIP Credit Agreement (See Note 3). This DIP Credit Agreement, coupled with our normal operating cash flows, is providing liquidity for the Company to operate as usual and fulfill ongoing commitments to stakeholders. Delisting of our Common Stock from the NASDAQ Stock Market |
Description of Business, Basi_2
Description of Business, Basis of Presentation, and Operating Segment (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and with the rules and regulations of the United States Securities and Exchange Commission (“SEC”). These financial statements include the financial position, results of operations and cash flows of the Company, including its subsidiaries, all of which are wholly-owned. All inter-company accounts and transactions have been eliminated in consolidation. For the three and six months ended June 30, 2020 and 2019 , there were no related party transactions. The Company adopted Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-15, Presentation of Financial Statements - (Subtopic 205-40) effective December 31, 2016, which requires the Company to make certain disclosures if it concludes that there is substantial doubt about the entity’s ability to continue as a going concern within 12 months from the date of the issuance of these financial statements. The Company has a history of recurring losses from operations, recurring cash flow losses, and a net capital deficiency. Further, during the six months ended June 30, 2020 , the COVID-19 pandemic had a negative impact on the Company’s financial results and business operations, and the Company expects that financial results and business operations will continue to be negatively impacted by the pandemic. As a result, the Company believes that its existing liquidity will not be sufficient to meet anticipated cash needs for at least the next 12 months from the issuance date of these financial statements, thereby raising substantial doubt about the Company’s ability to continue as a going concern. Voluntary Petition for Reorganization As discussed further in Note 3, on July 5, 2020 (the “Petition Date”), the Company and certain of its subsidiaries (collectively, the “Debtors”) commenced voluntary cases (the “Chapter 11 Cases”) under chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”). The commencement of the Chapter 11 Cases constitutes an event of default or termination event under all debt agreements of the Company. Accordingly, the Company has classified all of its outstanding debt as a current liability on its consolidated balance sheet as of June 30, 2020. Pursuant to Section 362 of the Bankruptcy Code, the filing of the Chapter 11 Cases automatically stayed most actions against the Debtors, including actions to collect indebtedness incurred prior to the Petition Date or to exercise control over the Debtors' property. Subject to certain exceptions under the Bankruptcy Code, the filing of the Debtors' Chapter 11 Cases also automatically stayed the filing of most legal proceedings and other actions against or on behalf of the Debtors or their property to recover on, collect or secure a claim arising prior to the Petition Date or to exercise control over property of the Debtors' bankruptcy estates, unless and until the Court modifies or lifts the automatic stay as to any such claim. Additionally, as the Chapter 11 Cases commenced on July 5, 2020, during the Company's third quarter, the current financial statements have not been prepared on the basis of ASC Subtopic 852-10, Reorganizations. A Chapter 11 plan of reorganization is likely to materially change the amounts and classifications of assets and liabilities reported in the Company’s subsequent consolidated balance sheet. Ability to Continue as a Going Concern The consolidated financial statements included herein have been prepared on a going concern basis, which contemplates continuity of operations and the realization of assets and the repayment of liabilities in the ordinary course of business. As a result of the Chapter 11 Cases, the realization of assets and the satisfaction of liabilities are subject to significant uncertainty. While operating as a debtor-in-possession pursuant to the Bankruptcy Code, the Company may sell, or otherwise dispose of or liquidate, assets or settle liabilities, subject to the approval of the Bankruptcy Court or as otherwise permitted in the ordinary course of business, for amounts other than those reflected in the accompanying consolidated financial statements. In addition, the COVID-19 pandemic has, and continues to have, a material impact on the Company’s business operations, financial position, liquidity, capital resources and results of operations (see Note 3). The risks and uncertainties surrounding the Chapter 11 Cases, the defaults under our debt agreements (see Note 3), and our financial condition, raise substantial doubt as to the Company’s ability to continue as a going concern. The Company’s future plans, including those in connection with the Chapter 11 Cases, are not yet finalized, fully executed or approved by the Bankruptcy Court, and therefore cannot be deemed probable of mitigating this substantial doubt within 12 months of the date of issuance of these financial statements. The Company has not made any adjustments to the accompanying consolidated financial statements related to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. The Company will require additional capital to sustain its operations and make the investments it needs to execute upon its business plan. If the Company is unable to generate sufficient revenue from its existing business plan, it will need to obtain additional equity or debt financing. If the Company attempts to obtain additional debt or equity financing, it cannot assume that such financing will be available on favorable terms, if at all. The interim financial data as of June 30, 2020 is unaudited and is not necessarily indicative of the results for a full year. In the opinion of the Company’s management, the interim data includes normal and recurring adjustments necessary for a fair presentation of the Company’s financial results for the three and six months ended June 30, 2020 . Certain information and disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to SEC rules and regulations relating to interim financial statements. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and Notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2019 , filed with the SEC on March 11, 2020 (the “Annual Report”). |
Operating Segment | Operating Segment The Company has one operating and reporting segment that is focused exclusively on the development, manufacture, marketing and sale of EVAR and EVAS products for the treatment of aortic disorders. For the three and six months ended June 30, 2020 , all of the Company’s revenue and related expenses were solely attributable to these activities. Substantially all of the Company’s long-lived assets are located in the United States. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and the related disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the periods presented. Management evaluates its estimates on an ongoing basis, including those related to: (i) collectibility of customer accounts; (ii) whether the cost of inventories can be recovered; (iii) the value of goodwill and intangible assets; (iv) realization of tax assets and estimates of tax liabilities; (v) likelihood of payment and the value of contingent liabilities; and (vi) the potential outcome of litigation. Such estimates are based on management’s judgment which takes into account historical experience and various assumptions. Nonetheless, actual results may differ from management’s estimates. |
Leases | All facility leases are accounted for as operating leases. A right-of-use asset, representing the underlying asset during the lease term, and a lease liability, representing the payment obligation arising from the lease, are recognized on the balance sheet at lease commencement based on the present value of the payment obligation. For operating leases, expense is recognized on a straight-line basis over the lease term. Short-term leases with an initial term of 12 months or less are not recorded on the balance sheet. The Company primarily uses its incremental borrowing rate in determining the present value of lease payments as the Company's facility leases generally do not provide an implicit rate. |
Balance Sheet Account Detail (T
Balance Sheet Account Detail (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Balance Sheet Related Disclosures [Abstract] | |
Property and Equipment | Property and equipment consisted of the following: June 30, December 31, Production equipment, molds and office furniture $ 10,937 $ 10,844 Computer hardware and software 7,907 7,897 Leasehold improvements 15,594 15,594 Construction in progress (software and related implementation, production equipment and leasehold improvements) 684 795 Property and equipment, at cost 35,122 35,130 Accumulated depreciation (23,284 ) (21,978 ) Property and equipment, net $ 11,838 $ 13,152 |
Schedule of Inventories | Inventories consisted of the following: June 30, December 31, Raw materials $ 5,480 $ 5,362 Work-in-process 4,916 4,132 Finished goods 15,512 16,911 Total Inventories $ 25,908 $ 26,405 |
Schedule of Carrying Amount of Goodwill | The change in the carrying amount of goodwill for the six months ended June 30, 2020 was as follows: Balance at December 31, 2019 $ 120,814 Foreign currency translation adjustment 2 Balance at June 30, 2020 $ 120,816 |
Schedule of Goodwill and Intangible Assets | Other intangible assets consisted of the following: June 30, 2020 December 31, 2019 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount Indefinite-lived intangible assets: Trademarks and trade names $ 2,708 N/A $ 2,708 $ 2,708 N/A $ 2,708 In-process research and development $ 11,200 N/A 11,200 11,200 N/A 11,200 Total indefinite-lived intangible assets 13,908 13,908 13,908 13,908 Finite-lived intangible assets: Developed technology 67,600 (14,647 ) 52,953 67,600 (13,467 ) 54,133 Customer relationships 7,500 (3,313 ) 4,187 7,500 (2,938 ) 4,562 Total finite-lived intangible assets 75,100 (17,960 ) 57,140 75,100 (16,405 ) 58,695 Other intangible assets, net $ 89,008 $ (17,960 ) $ 71,048 $ 89,008 $ (16,405 ) $ 72,603 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for the 5 succeeding years and thereafter is as follows: Remainder of 2020 $ 1,629 2021 3,276 2022 3,319 2023 3,378 2024 3,497 2025 3,724 Thereafter 38,317 Total $ 57,140 |
Schedule of Assets and Liabilities Measured at Fair Value | The following fair value hierarchy table presents information about each major category of the Company’s assets and liabilities measured at fair value on a recurring basis as of June 30, 2020 and December 31, 2019 : June 30, 2020 December 31, 2019 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial liabilities: Contingently issuable common stock (a) $ — $ — $ 300 $ 300 $ — $ — $ 500 $ 500 Derivative liabilities (b) $ — $ — — — — — 940 940 Total financial liabilities $ — $ — $ 300 $ 300 $ — $ — $ 1,440 $ 1,440 (a) See Note 10 for additional details. (b) See Note 7 for additional details. |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | Changes in the fair value of the Company’s Level 3 liabilities were as follows: Contingently issuable common stock Derivative liabilities Balance at December 31, 2019 $ 500 $ 940 Retirement due to debt extinguishment — (1,351 ) Additions — 12,916 Fair value adjustment (200 ) (12,505 ) Balance at June 30, 2020 $ 300 $ — (a) See Note 10 for additional details. (b) See Note 7 for additional details. |
Schedule Of Fair Values And Book Values Of Long-Term Debt | The table below summarizes the carrying and fair values of the Company’s debt: June 30, 2020 December 31, 2019 Carrying value Fair value Carrying value Fair value Term loan facility $ 143,301 $ 115,765 $ 141,274 $ 131,892 Convertible notes 35,293 30,247 37,111 24,548 Other debt 14,093 11,169 4,281 1,416 $ 192,687 $ 157,181 $ 182,666 $ 157,856 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Expense | The table below summarizes the impact of recording stock-based compensation expense in the Condensed Consolidated Statements of Operations and Comprehensive Loss during the six months ended June 30, 2020 and 2019 : Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Cost of goods sold $ 158 $ 179 $ 322 $ 406 Operating expenses: Research and development 176 331 357 663 Clinical and regulatory affairs 162 187 329 373 Marketing and sales 117 685 416 1,394 General and administrative 309 1,141 1,232 2,048 Total operating expenses 764 2,344 2,334 4,478 Total $ 922 $ 2,523 $ 2,656 $ 4,884 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Antidilutive Securities Excluded from Computation of Loss Per Share | Because of the net losses in the three and six months ended June 30, 2020 and 2019 , the following outstanding Company securities, using the treasury stock method, were excluded from the calculations of net loss per share because the effect would have been anti-dilutive: Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 Restricted stock awards 2,706 3,579 2,831 3,107 Restricted stock units 116,494 64,134 128,156 32,404 Warrants 1,522,002 1,522,002 1,522,002 1,522,002 Total 1,641,202 1,589,715 1,652,989 1,557,513 The potential dilutive effect of these securities is shown in the table below: Six Months Ended June 30, 2020 2019 Convertible notes 13,049,893 8,463,236 Conversion features under term loan facility 31,430,001 11,996,038 Convertible preferred stock 1,464,900 — |
Credit Facilities (Tables)
Credit Facilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Line of Credit Facility [Abstract] | |
Schedule of Long-term Debt | Debt consisted of the following: June 30, December 31, Term loan facility $ 174,083 $ 167,858 Convertible notes 74,884 73,165 Other debt 14,093 4,281 Debt discounts and deferred financing costs (70,373 ) (62,638 ) Total debt 192,687 182,666 |
Summary of Warrants Issued | In connection with the execution of the Original Facility Agreement and the Restated Facility Agreement, the Company issued warrants to Deerfield (the “Original 2017 Deerfield Warrants” and the “Original 2018 Deerfield Warrants,” respectively). In connection with entry into the Second Facility Amendment, the Company amended the Original 2017 Deerfield Warrants and the Original 2018 Deerfield Warrants in order to reduce the exercise price, which was further reduced by the Fourth Facility Amendment (as amended, the “2017 Deerfield Warrants” and the “2018 Deerfield Warrants”; collectively, the “Deerfield Warrants”) as summarized below: Number of shares of common stock Original Exercise Price Second Amendment Exercise price 2017 Deerfield Warrants 647,001 $ 92.31 $ 6.61 2018 Deerfield Warrants 875,001 $ 47.11 $ 6.61 |
Revenue Disaggregation (Tables)
Revenue Disaggregation (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Geographic Areas, Revenues from External Customers [Abstract] | |
Schedule of Revenue by Geographic Region | The tables below include a reconciliation of disaggregated revenue with the Company’s reportable segment: Three Months Ended June 30, 2020 2019 Implant-based Shipment-based Total Implant-based Shipment-based Total United States $ 13,755 $ 475 $ 14,230 $ 23,507 $ 506 $ 24,013 International $ 2,040 $ 8,571 $ 10,611 $ 3,237 $ 8,988 $ 12,225 Total Revenue $ 15,795 $ 9,046 $ 24,841 $ 26,744 $ 9,494 $ 36,238 Six Months Ended June 30, 2020 2019 Implant-based Shipment-based Total Implant-based Shipment-based Total United States $ 32,078 $ 781 $ 32,859 $ 45,969 $ 829 $ 46,798 International $ 5,032 $ 15,460 $ 20,492 $ 7,044 $ 18,002 $ 25,046 Total Revenue $ 37,110 $ 16,241 $ 53,351 $ 53,013 $ 18,831 $ 71,844 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Operating lease liability maturity | Maturities of facility lease liabilities by fiscal year for our operating leases are as follows as of June 30, 2020 : Remainder of 2020 $ 1,677 2021 4,078 2022 3,861 2023 2,950 2024 2,849 2025 2,905 2026 and thereafter 9,432 Total lease payments $ 27,752 Less: Imputed Interest (14,625 ) Present value of operating lease liabilities $ 13,127 |
Description of Business, Basi_3
Description of Business, Basis of Presentation, and Operating Segment (Details) | 6 Months Ended |
Jun. 30, 2020segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Use of Estimates and Summary _2
Use of Estimates and Summary of Significant Accounting Policies (Narrative) (Details) - Subsequent Event | Jul. 08, 2020USD ($) |
Debtor-in-Possession Financing [Line Items] | |
Lenders under the Existing Facility Agreements | 100.00% |
Amount arranged | $ 130,800,000 |
Delayed draw term loan commitment | $ 20,800,000 |
Financing closing fee | 2.00% |
Repayment of original debt | $ 100,000,000 |
Interest rate on borrowings outstanding | 12.00% |
Additional default interest rate | 2.00% |
Advance | |
Debtor-in-Possession Financing [Line Items] | |
Amount arranged | $ 10,000,000 |
Roll-Up Loan | |
Debtor-in-Possession Financing [Line Items] | |
Amount arranged | $ 100,000,000 |
Bankruptcy Filing (Details)
Bankruptcy Filing (Details) - Subsequent Event | Jul. 08, 2020USD ($) |
Bankruptcy [Line Items] | |
Lenders under the Existing Facility Agreements | 100.00% |
Amount arranged | $ 130,800,000 |
Delayed draw term loan commitment | $ 20,800,000 |
Financing closing fee | 2.00% |
Repayment of original debt | $ 100,000,000 |
Interest rate on borrowings outstanding | 12.00% |
Additional default interest rate | 2.00% |
Advance | |
Bankruptcy [Line Items] | |
Amount arranged | $ 10,000,000 |
Roll-Up Loan | |
Bankruptcy [Line Items] | |
Amount arranged | $ 100,000,000 |
Balance Sheet Account Detail (P
Balance Sheet Account Detail (Property and Equipment) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | $ 35,122 | $ 35,122 | $ 35,130 | ||
Accumulated depreciation | (23,284) | (23,284) | (21,978) | ||
Property and equipment, net | 11,838 | 11,838 | 13,152 | ||
Depreciation expense | 600 | $ 900 | 1,300 | $ 1,800 | |
Production equipment, molds and office furniture | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | 10,937 | 10,937 | 10,844 | ||
Computer hardware and software | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | 7,907 | 7,907 | 7,897 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | 15,594 | 15,594 | 15,594 | ||
Construction in progress (software and related implementation, production equipment and leasehold improvements) | |||||
Property, Plant and Equipment [Line Items] | |||||
Property and equipment, at cost | $ 684 | $ 684 | $ 795 |
Balance Sheet Account Detail (I
Balance Sheet Account Detail (Inventories) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 5,480 | $ 5,362 |
Work-in-process | 4,916 | 4,132 |
Finished goods | 15,512 | 16,911 |
Total Inventories | $ 25,908 | $ 26,405 |
Balance Sheet Account Detail (C
Balance Sheet Account Detail (Change in Carrying Amount of Goodwill) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at December 31, 2019 | $ 120,814 |
Foreign currency translation adjustment | 2 |
Balance at June 30, 2020 | $ 120,816 |
Balance Sheet Account Detail (O
Balance Sheet Account Detail (Other Intangible Assets) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Goodwill, Finite-lived, and Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | $ 13,908 | $ 13,908 |
Total finite-lived intangible assets | 75,100 | 75,100 |
Accumulated Amortization | (17,960) | (16,405) |
Total | 57,140 | 58,695 |
Developed technology | ||
Goodwill, Finite-lived, and Indefinite-lived Intangible Assets [Line Items] | ||
Total finite-lived intangible assets | 67,600 | 67,600 |
Accumulated Amortization | (14,647) | (13,467) |
Total | 52,953 | 54,133 |
Customer relationships | ||
Goodwill, Finite-lived, and Indefinite-lived Intangible Assets [Line Items] | ||
Total finite-lived intangible assets | 7,500 | 7,500 |
Accumulated Amortization | (3,313) | (2,938) |
Total | 4,187 | 4,562 |
Other intangible assets, net | ||
Goodwill, Finite-lived, and Indefinite-lived Intangible Assets [Line Items] | ||
Total finite-lived intangible assets | 89,008 | 89,008 |
Accumulated Amortization | (17,960) | (16,405) |
Total | 71,048 | 72,603 |
Trademarks and trade names | ||
Goodwill, Finite-lived, and Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | 2,708 | 2,708 |
In-process research and development | ||
Goodwill, Finite-lived, and Indefinite-lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | $ 11,200 | $ 11,200 |
Balance Sheet Account Detail (A
Balance Sheet Account Detail (Amortization) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |||||
Amortization expense | $ 1,000 | $ 900 | $ 1,600 | $ 1,700 | |
Remainder of 2020 | 1,629 | 1,629 | |||
2021 | 3,276 | 3,276 | |||
2022 | 3,319 | 3,319 | |||
2023 | 3,378 | 3,378 | |||
2024 | 3,497 | 3,497 | |||
2025 | 3,724 | 3,724 | |||
Thereafter | 38,317 | 38,317 | |||
Total | $ 57,140 | $ 57,140 | $ 58,695 |
Balance Sheet Account Detail (F
Balance Sheet Account Detail (Fair Value Measurements) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative liabilities | $ 0 | $ 940 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingently issuable common stock | 300 | 500 |
Derivative liabilities | 0 | 940 |
Total financial liabilities | 300 | 1,440 |
Level 1 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingently issuable common stock | 0 | 0 |
Derivative liabilities | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 2 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingently issuable common stock | 0 | 0 |
Derivative liabilities | 0 | 0 |
Total financial liabilities | 0 | 0 |
Level 3 | Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Contingently issuable common stock | 300 | 500 |
Derivative liabilities | 0 | 940 |
Total financial liabilities | $ 300 | $ 1,440 |
Balance Sheet Account Detail _2
Balance Sheet Account Detail (Changes in the Fair Value of Level 3 Liabilities) (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Contingently issuable common stock | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2019 | $ 500 |
Retirement due to debt extinguishment | 0 |
Additions | 0 |
Fair value adjustment | (200) |
Balance at June 30, 2020 | 300 |
Derivative liabilities | |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance at December 31, 2019 | 940 |
Retirement due to debt extinguishment | (1,351) |
Additions | 12,916 |
Fair value adjustment | (12,505) |
Balance at June 30, 2020 | $ 0 |
Balance Sheet Account Detail _3
Balance Sheet Account Detail (Financial Instruments Not Recorded at Fair Value on a Recurring Basis) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | Aug. 09, 2018 | Nov. 02, 2015 |
Debt Instrument [Line Items] | ||||
Carrying value | $ 192,687 | $ 182,666 | ||
Convertible Senior Notes Due 2020 | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated interest rate | 3.25% | |||
Convertible Senior Notes Due 2020 | Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, stated interest rate | 3.25% | |||
Level 3 | ||||
Debt Instrument [Line Items] | ||||
Carrying value | 192,687 | 182,666 | ||
Fair value | 157,181 | 157,856 | ||
Level 3 | Term loan facility | ||||
Debt Instrument [Line Items] | ||||
Carrying value | 143,301 | 141,274 | ||
Fair value | 115,765 | 131,892 | ||
Level 3 | Convertible notes | ||||
Debt Instrument [Line Items] | ||||
Carrying value | 35,293 | 37,111 | ||
Fair value | 30,247 | 24,548 | ||
Level 3 | Other debt | ||||
Debt Instrument [Line Items] | ||||
Carrying value | 14,093 | 4,281 | ||
Fair value | $ 11,169 | $ 1,416 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | $ 922 | $ 2,523 | $ 2,656 | $ 4,884 |
Cost of goods sold | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 158 | 179 | 322 | 406 |
Research and development | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 176 | 331 | 357 | 663 |
Clinical and regulatory affairs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 162 | 187 | 329 | 373 |
Marketing and sales | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 117 | 685 | 416 | 1,394 |
General and administrative | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | 309 | 1,141 | 1,232 | 2,048 |
Total operating expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated stock-based compensation expense | $ 764 | $ 2,344 | $ 2,334 | $ 4,478 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Securities Excluded from Calculations of Earnings Per Share Because Impact Would Have Been Anti-Dilutive [Abstract] | ||||
Outstanding securities used in calculations (in shares) | 1,641,202 | 1,589,715 | 1,652,989 | 1,557,513 |
Potential Dilutive Effect of Securities [Abstract] | ||||
Convertible notes | 13,049,893 | 8,463,236 | ||
Conversion features under term loan facility | 31,430,001 | 11,996,038 | ||
Convertible preferred stock | 1,464,900,000 | 0 | ||
Restricted stock awards | ||||
Securities Excluded from Calculations of Earnings Per Share Because Impact Would Have Been Anti-Dilutive [Abstract] | ||||
Outstanding securities used in calculations (in shares) | 2,706 | 3,579 | 2,831 | 3,107 |
Restricted stock units | ||||
Securities Excluded from Calculations of Earnings Per Share Because Impact Would Have Been Anti-Dilutive [Abstract] | ||||
Outstanding securities used in calculations (in shares) | 116,494 | 64,134 | 128,156 | 32,404 |
Warrants | ||||
Securities Excluded from Calculations of Earnings Per Share Because Impact Would Have Been Anti-Dilutive [Abstract] | ||||
Outstanding securities used in calculations (in shares) | 1,522,002 | 1,522,002 | 1,522,002 | 1,522,002 |
Credit Facilities (Schedule of
Credit Facilities (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Line of Credit Facility [Abstract] | ||
Term loan facility | $ 174,083 | $ 167,858 |
Convertible notes | 74,884 | 73,165 |
Other debt | 14,093 | 4,281 |
Debt discounts and deferred financing costs | (70,373) | (62,638) |
Total debt | $ 192,687 | $ 182,666 |
Credit Facilities (Deerfield Fa
Credit Facilities (Deerfield Facility Agreement, as Amended) (Details) | Feb. 24, 2020USD ($)$ / sharesshares | Apr. 03, 2019USD ($)$ / sharesshares | Apr. 01, 2019USD ($)day$ / sharesshares | Mar. 31, 2019USD ($) | Aug. 09, 2018USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)$ / sharesshares | Jun. 30, 2019USD ($) | Jul. 01, 2021 | Mar. 04, 2020USD ($)shares | Dec. 31, 2018 | Apr. 03, 2017USD ($) | Nov. 02, 2015USD ($) |
Debt Instrument [Line Items] | ||||||||||||||
Stock trigger price (usd per share) | $ / shares | $ 6.61 | |||||||||||||
Number of shares issued | shares | 7,889,552 | |||||||||||||
Sale of stock price per share (usd per share) | $ / shares | $ 6.61 | |||||||||||||
Consideration received on transaction | $ 52,150,000 | |||||||||||||
Maximum equity owned by Investor | 9.50% | 9.50% | ||||||||||||
Loss on debt extinguishment | $ 0 | $ 11,756,000 | $ 730,000 | $ 11,756,000 | ||||||||||
Convertible preferred stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible preferred stock authorized (in shares) | shares | 1,150,000 | 1,150,000 | ||||||||||||
Convertible preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | ||||||||||||
Deerfield ELGX Revolver, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Stock trigger price (usd per share) | $ / shares | $ 6.625 | |||||||||||||
Mandatory conversion of shares | $ 1,666,666 | |||||||||||||
Line of credit facility increase (decrease) | $ 5,000,000 | |||||||||||||
Exit fee upon termination | 6,100,000 | 11,100,000 | ||||||||||||
Commitment reduction | 10,000,000 | |||||||||||||
Maximum equity owned by Investor | 4.985% | 4.985% | ||||||||||||
Deerfield ELGX Revolver, LLC | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Mandatory conversion of shares | $ 25,000,000 | |||||||||||||
Revolving loan facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, stated interest rate | 5.50% | 5.50% | ||||||||||||
Loss on debt extinguishment | $ 3,400,000 | |||||||||||||
Deferred financing cost | $ 400,000 | $ 400,000 | ||||||||||||
Revolving loan facility | Series DF-1 Preferred Stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Convertible preferred stock authorized (in shares) | shares | 5,000,000 | |||||||||||||
Revolving loan facility | Deerfield ELGX Revolver, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 120,000,000 | |||||||||||||
Global liquidity requirement | $ 17,500,000 | 22,500,000 | ||||||||||||
Waterfall loans due | 16.67% | 33.33% | ||||||||||||
Remainder of the first out water fall loans | 50.00% | |||||||||||||
Amended First Out Waterfall Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Value of shares issued | $ 2,000,000 | |||||||||||||
Common shares issued (in shares) | shares | 950,000 | |||||||||||||
Preferred shares issued (in shares) | shares | 14,649 | |||||||||||||
Amended First Out Waterfall Notes | Series DF-1 Preferred Stock | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion ratio | 100 | |||||||||||||
Convertible preferred stock authorized (in shares) | shares | 1,150,000 | |||||||||||||
First Out Waterfall Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Conversion of debt to equity | $ 500,000 | |||||||||||||
Derivative liabilities removal | $ 1,400,000 | |||||||||||||
Facility Agreement, Due 2023 | Term loan facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 120,000,000 | |||||||||||||
Amortization payments, rate | 33.33% | |||||||||||||
Convertible Senior Notes Due 2020 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 40,500,000 | |||||||||||||
Debt instrument, stated interest rate | 3.25% | |||||||||||||
Convertible Senior Notes Due 2020 | Convertible notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 125,000,000 | |||||||||||||
Debt instrument, stated interest rate | 3.25% | |||||||||||||
Amended and Restated Facility Agreement | Revolving loan facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 40,500,000 | |||||||||||||
Amortization payments, rate | 50.00% | |||||||||||||
Fixed Price Conversion | Deerfield ELGX Revolver, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
VWAP days | day | 5 | |||||||||||||
Fourth Facility Amendment | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument face amount | $ 40,000,000 | |||||||||||||
Debt instrument, voluntary conversion amount | $ 3,500,000 | |||||||||||||
Volume weighted average price rate trigger | 85.00% | |||||||||||||
Fixed conversion price | 170.00% | |||||||||||||
Convertible preferred stock par value (in dollars per share) | $ / shares | $ 0.001 | |||||||||||||
Fourth Facility Amendment | First Out Waterfall Notes | Revolving loan facility | Deerfield ELGX Revolver, LLC | Subsequent Event | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Percentage of debt due | 16.67% | |||||||||||||
Discretionary Conversion | Amended First Out Waterfall Notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, voluntary conversion amount | $ 60,000,000 | |||||||||||||
Volume weighted average price rate trigger | 85.00% | |||||||||||||
Fixed conversion price | 200.00% | |||||||||||||
Second Amendment to Facility Agreement | Term loan facility | Deerfield ELGX Revolver, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Maximum number of shares under mandatory redemption | shares | 1,430,001 | |||||||||||||
Convertible Senior Notes Due 2024 | Convertible notes | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument, stated interest rate | 5.00% | 5.00% | ||||||||||||
Interest rate, payable in kind | 4.75% | 4.75% | ||||||||||||
Term Loan | Term loan facility | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Deferred financing cost | $ 2,100,000 | $ 2,100,000 | ||||||||||||
Term Loan | Term loan facility | Minimum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest expense | 5,800,000 | |||||||||||||
Term Loan | Term loan facility | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest expense | 38,200,000 | |||||||||||||
Deerfield ELGX Revolver, LLC | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Short-term debt | $ 143,300,000 | $ 143,300,000 |
Credit Facilities (Deerfield Wa
Credit Facilities (Deerfield Warrants) (Details) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Number of shares of common stock (in shares) | 19,299,228 | 18,190,054 |
2017 Deerfield Warrants | ||
Debt Instrument [Line Items] | ||
Number of shares of common stock (in shares) | 647,001,000 | |
2018 Deerfield Warrants | ||
Debt Instrument [Line Items] | ||
Number of shares of common stock (in shares) | 875,001 | |
Original Exercise Price | 2017 Deerfield Warrants | ||
Debt Instrument [Line Items] | ||
Exercise price (usd per share) | $ 92,310 | |
Original Exercise Price | 2018 Deerfield Warrants | ||
Debt Instrument [Line Items] | ||
Exercise price (usd per share) | 47,110 | |
Second Amendment Exercise price | 2017 Deerfield Warrants | ||
Debt Instrument [Line Items] | ||
Exercise price (usd per share) | 6.61 | |
Second Amendment Exercise price | 2018 Deerfield Warrants | ||
Debt Instrument [Line Items] | ||
Exercise price (usd per share) | $ 6.61 |
Credit Facilities (Deerfield _2
Credit Facilities (Deerfield Warrants Narrative) (Details) | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Facility Agreement, Due 2023, Deerfield Warrants | Facility Agreement, Due 2023 | |
Line of Credit Facility [Line Items] | |
Class of warrant or right, expiration date | 7 years |
Class of warrant or right, exercise limitation threshold | 4.985% |
2017 Deerfield Warrants | |
Line of Credit Facility [Line Items] | |
Conversion of debt to equity | $ 500,000 |
Credit Facilities (Derivative L
Credit Facilities (Derivative Liabilities) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Feb. 24, 2020 | |
Derivative [Line Items] | |||||
Change in fair value of derivative liabilities | $ 2,330 | $ 872 | $ 12,505 | $ (1,151) | |
2018 Deerfield Warrants | Derivative liabilities | |||||
Derivative [Line Items] | |||||
Derivative liability, noncurrent | $ 12,000 |
Credit Facilities (Deerfield Re
Credit Facilities (Deerfield Revolver) (Details) - USD ($) | Jun. 30, 2020 | Mar. 31, 2019 | Aug. 09, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jan. 12, 2018 |
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | $ 500,000 | |||||
Revolving loan facility | $ 0 | $ 0 | ||||
Credit Agreement | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument face amount | $ 50,000,000 | |||||
Global liquidity requirement | 17,500,000 | |||||
Closing | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | 200,000 | |||||
First Anniversary | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | 200,000 | |||||
Termination fee | 2.50% | |||||
Second Anniversary | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | 100,000 | |||||
Termination fee | 1.50% | |||||
Expiration | ||||||
Line of Credit Facility [Line Items] | ||||||
Commitment fee amount | 1,000,000 | |||||
Third Anniversary | ||||||
Line of Credit Facility [Line Items] | ||||||
Termination fee | 0.50% | |||||
Thereafter, Fee | ||||||
Line of Credit Facility [Line Items] | ||||||
Termination fee | 0.00% | |||||
Revolving loan facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, stated interest rate | 5.50% | |||||
Debt issuance costs, noncurrent | 600,000 | 600,000 | ||||
Deferred financing cost | 400,000 | 400,000 | ||||
Revolving loan facility | Deerfield ELGX Revolver, LLC | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument face amount | $ 120,000,000 | |||||
Global liquidity requirement | $ 17,500,000 | $ 22,500,000 | ||||
Debt issuance costs | $ 600,000 | 600,000 | ||||
Revolving loan facility | London Interbank Offered Rate (LIBOR) | ||||||
Line of Credit Facility [Line Items] | ||||||
Variable rate, floor | 1.00% | |||||
Interest accrued | $ 9,750,000 | $ 9,750,000 |
Credit Facilities (3.25% Conver
Credit Facilities (3.25% Convertible Senior Notes due 2020) (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 03, 2019 | Mar. 31, 2019 | Aug. 09, 2018 | Nov. 02, 2015 |
Revolving loan facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 5.50% | |||||
Convertible Senior Notes Due 2020 | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 3.25% | |||||
Debt instrument face amount | $ 40,500,000 | |||||
Convertible Senior Notes Due 2020 | Convertible notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 3.25% | |||||
Debt instrument face amount | $ 125,000,000 | |||||
Convertible notes payable | $ 100,000 | |||||
Amended and Restated Facility Agreement | Revolving loan facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 40,500,000 | |||||
Convertible Senior Notes Issued November, 2015 | Convertible notes | Two Investors | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 73,400,000 | |||||
5% Note | Convertible notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, stated interest rate | 5.00% | 5.00% | 5.00% | |||
Debt instrument face amount | $ 25,000,000 | |||||
Convertible notes payable | $ 30,400,000 | |||||
5% Note | Convertible notes | Two Investors | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument face amount | $ 42,000,000 |
Credit Facilities (5.00% Notes)
Credit Facilities (5.00% Notes) (Details) | Feb. 24, 2020USD ($)$ / shares | Apr. 03, 2019USD ($)day$ / shares | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 04, 2020 | Dec. 31, 2019USD ($) | Mar. 31, 2019 | Aug. 09, 2018USD ($) | Nov. 02, 2015USD ($) |
Line of Credit Facility [Line Items] | |||||||||||
Maximum equity owned by Investor | 9.50% | 9.50% | |||||||||
Gain (loss) on extinguishment of debt | $ 0 | $ (11,756,000) | $ (730,000) | $ (11,756,000) | |||||||
Carrying value | 192,687,000 | 192,687,000 | $ 182,666,000 | ||||||||
Stock trigger price (usd per share) | $ / shares | $ 6.61 | ||||||||||
Convertible notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt, conversion option | 3,600,000 | 3,600,000 | |||||||||
5% Note | Convertible notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, stated interest rate | 5.00% | 5.00% | 5.00% | 5.00% | |||||||
Limit on conversion | 30.00% | 30.00% | |||||||||
Convertible debt, conversion ratio | 0.15129 | ||||||||||
Debt instrument, convertible, face amount of each note that is convertible | $ 1 | ||||||||||
Carrying value | 67,200,000 | 67,200,000 | |||||||||
Debt, conversion option | 41,200,000 | 41,200,000 | |||||||||
Debt issuance costs, line of credit arrangements, gross | 1,200,000 | 1,200,000 | |||||||||
Deferred financing cost | 500,000 | 500,000 | |||||||||
Reduction in equity | 700,000 | ||||||||||
Convertible notes payable | 30,400,000 | 30,400,000 | |||||||||
Debt issuance costs, gross | 400,000 | 400,000 | |||||||||
Debt instrument face amount | 25,000,000 | ||||||||||
Mandatory conversion of shares | $ 1,666,666 | ||||||||||
Convertible debt redemption, consecutive trading days threshold | day | 5 | ||||||||||
Maximum conversion amount | 30.00% | ||||||||||
5% Note | Convertible notes | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Periodic payment, interest | 14,700,000 | ||||||||||
5% Note | Convertible notes | Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Periodic payment, interest | 4,300,000 | ||||||||||
5% Note | Convertible notes | Two Investors | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument face amount | $ 42,000,000 | ||||||||||
5% Note | Face Value Per Note | Two Investors | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument face amount | 900 | ||||||||||
Convertible Senior Notes Due 2020 | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, stated interest rate | 3.25% | ||||||||||
Debt instrument face amount | $ 40,500,000 | ||||||||||
Convertible Senior Notes Due 2020 | Convertible notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, stated interest rate | 3.25% | ||||||||||
Convertible notes payable | 100,000 | 100,000 | |||||||||
Debt instrument face amount | $ 125,000,000 | ||||||||||
Convertible Senior Notes Due 2020 | Convertible notes | Three Investors | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Original debt | $ 11,000,000 | ||||||||||
Convertible Senior Notes Due 2020 | Face Value Per Note | Two Investors | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument face amount | $ 1,000 | ||||||||||
New 5.00% Note | Convertible notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument, stated interest rate | 5.00% | ||||||||||
Gain (loss) on extinguishment of debt | 2,700,000 | ||||||||||
Carrying value | 8,000,000 | 8,000,000 | |||||||||
Debt issuance costs, line of credit arrangements, gross | 120,000 | 120,000 | |||||||||
Deferred financing cost | 66,000 | 66,000 | |||||||||
Reduction in equity | 53,000 | ||||||||||
Convertible notes payable | 4,700,000 | 4,700,000 | |||||||||
Debt issuance costs, gross | $ 100,000 | 100,000 | |||||||||
Periodic payment, principal | 0 | ||||||||||
New 5.00% Note | Convertible notes | Minimum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Periodic payment, interest | 800,000 | ||||||||||
New 5.00% Note | Convertible notes | Maximum | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Periodic payment, interest | $ 2,900,000 | ||||||||||
New 5.00% Note | Convertible notes | Three Investors | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Debt instrument face amount | $ 11,000,000 | ||||||||||
Voluntary Conversion | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Stock trigger price (usd per share) | $ / shares | $ 7.271 | ||||||||||
Voluntary Conversion | Convertible notes | |||||||||||
Line of Credit Facility [Line Items] | |||||||||||
Convertible debt, conversion ratio | 0.4445 | 0.12103 | |||||||||
Debt instrument, convertible, face amount of each note that is convertible | $ 1 | $ 1 | |||||||||
Conversion price (USD per share) | $ / shares | $ 2.25 | $ 8.2624 | |||||||||
Conversion price | 110.00% |
Credit Facilities (Japan Lifeli
Credit Facilities (Japan Lifeline Co., Ltd. Subordinated Promissory Note) (Details) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Nov. 20, 2018 |
Debt Instrument [Line Items] | |||
Other debt | $ 14,093,000 | $ 4,281,000 | |
Japan Lifeline Co., Ltd. | |||
Debt Instrument [Line Items] | |||
Other debt | $ 4,300,000 | ||
Japan Lifeline Co., Ltd. | Other debt | |||
Debt Instrument [Line Items] | |||
Debt instrument, stated interest rate | 2.50% |
Credit Facilities (Paycheck Pr
Credit Facilities (Paycheck Protection Program Loan) (Details) $ in Millions | May 05, 2020USD ($) |
PPP Loan | |
Debt Instrument [Line Items] | |
Debt instrument face amount | $ 9.8 |
Revenue Disaggregation (Details
Revenue Disaggregation (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 24,841 | $ 36,238 | $ 53,351 | $ 71,844 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 14,230 | 24,013 | 32,859 | 46,798 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 10,611 | 12,225 | 20,492 | 25,046 |
Implant-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 15,795 | 26,744 | 37,110 | 53,013 |
Implant-based | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 13,755 | 23,507 | 32,078 | 45,969 |
Implant-based | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 2,040 | 3,237 | 5,032 | 7,044 |
Shipment-based | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 9,046 | 9,494 | 16,241 | 18,831 |
Shipment-based | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | 475 | 506 | 781 | 829 |
Shipment-based | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue | $ 8,571 | $ 8,988 | $ 15,460 | $ 18,002 |
Commitments and Contingencies_2
Commitments and Contingencies (Narrative) (Details) $ in Millions | Jan. 09, 2017shareholder | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) |
Lessee, Lease, Description [Line Items] | |||
Option to extend, term | 5 years | ||
Rent expense | $ 0.8 | $ 1.6 | |
Variable lease cost | 0.2 | 0.4 | |
Deferred rent | 0.2 | 0.2 | |
Lease liability, current | $ 2 | $ 2 | |
Weighted-average remaining lease term | 7 years 4 months 24 days | 7 years 4 months 24 days | |
Weighted-average discount rate | 22.10% | 22.10% | |
Number of shareholders in litigation | shareholder | 2 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 3 years | 3 years | |
Severance payment, prior to change in control | 6 months | ||
Severance payment, period following change in control | 18 months | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Term of contract | 9 years | 9 years | |
Severance payment, prior to change in control | 18 months | ||
Severance payment, period following change in control | 24 months |
Commitments and Contingencies_3
Commitments and Contingencies (Schedule of Operating Lease Maturity) (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |
Remainder of 2020 | $ 1,677 |
2021 | 4,078 |
2022 | 3,861 |
2023 | 2,950 |
2024 | 2,849 |
2025 | 2,905 |
2026 and thereafter | 9,432 |
Total lease payments | 27,752 |
Less: Imputed Interest | (14,625) |
Present value of operating lease liabilities | $ 13,127 |
Contingently Issuable Common _2
Contingently Issuable Common Stock (Details) - USD ($) $ / shares in Units, $ in Millions | Dec. 10, 2010 | Jun. 30, 2020 |
Nelix Milestones | ||
Business Acquisition [Line Items] | ||
Number of shares contingently issuable (in shares) | 1,020,000 | |
Estimated fair value of contingent payment | $ 28.2 | |
PMA Milestone | ||
Business Acquisition [Line Items] | ||
Number of shares contingently issuable (in shares) | 333,149 | |
Common shares value | $ 15 | |
Share price (in dollars per share) | $ 45 | |
Closing stock price (in dollars per share) | $ 0.80 | |
Average daily closing stock price | 30 days | |
Days prior to milestone achievement announcement | 5 days | |
Contingent consideration, at fair value hypothetical value | $ 0.3 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 46 | $ (3,253) | $ 73 | $ (3,214) |
Effective income tax rate | (0.18%) | 10.70% | (0.17%) | 6.14% |