Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2017 | Nov. 10, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | STRATA Skin Sciences, Inc. | |
Entity Central Index Key | 1,051,514 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 4,076,089 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q3 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2017 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 3,127 | $ 3,928 |
Accounts receivable, net of allowance for doubtful accounts of $177 and $135, respectively | 3,184 | 3,390 |
Inventories | 3,533 | 2,817 |
Prepaid expenses and other current assets | 209 | 617 |
Total current assets | 10,053 | 10,752 |
Property and equipment, net | 8,658 | 10,180 |
Intangible assets, net | 12,302 | 13,412 |
Goodwill | 8,803 | 8,803 |
Other assets | 48 | 46 |
Total assets | 39,864 | 43,193 |
Current liabilities: | ||
Note payable | 34 | 339 |
Current portion of long-term debt | 1,936 | 1,714 |
Accounts payable | 1,907 | 1,853 |
Other accrued liabilities | 1,899 | 1,992 |
Deferred revenues | 350 | 235 |
Total current liabilities | 6,126 | 6,133 |
Long-term liabilities: | ||
Long-term debt, net | 8,842 | 9,752 |
Senior secured convertible debentures, net | 0 | 12,028 |
Warrant liability | 28 | 105 |
Deferred tax liability | 539 | 359 |
Other liabilities | 412 | 97 |
Total liabilities | 15,947 | 28,474 |
Commitment and contingencies | ||
Stockholders' equity: | ||
Common Stock, $.001 par value, 150,000,000 shares authorized; 2,477,743 and 2,166,898 shares issued and outstanding, as of September 30, 2017 and December 31, 2016, respectively | 3 | 2 |
Additional paid-in capital | 251,594 | 225,289 |
Accumulated deficit | (227,686) | (210,575) |
Accumulated other comprehensive income | 2 | 2 |
Total stockholders' equity | 23,917 | 14,719 |
Total liabilities and stockholders' equity | 39,864 | 43,193 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred Stock | 0 | 1 |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred Stock | $ 4 | $ 0 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | ||
Allowance for doubtful accounts | $ 177 | $ 135 |
Stockholders' equity: | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock, shares issued (in shares) | 2,477,743 | 2,166,898 |
Common stock, shares outstanding (in shares) | 2,477,743 | 2,166,898 |
Series B Convertible Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 2,928 | 6,000 |
Preferred stock, shares outstanding (in shares) | 2,928 | 6,000 |
Series C Convertible Preferred Stock [Member] | ||
Stockholders' equity: | ||
Preferred stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 40,482 | 0 |
Preferred stock, shares outstanding (in shares) | 40,482 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) [Abstract] | ||||
Revenues | $ 7,480 | $ 7,767 | $ 23,454 | $ 23,126 |
Cost of revenues | 3,276 | 3,070 | 9,182 | 9,631 |
Gross profit | 4,204 | 4,697 | 14,272 | 13,495 |
Operating expenses: | ||||
Engineering and product development | 411 | 382 | 1,309 | 1,541 |
Selling and marketing | 2,687 | 2,840 | 8,914 | 10,073 |
General and administrative | 1,678 | 1,880 | 4,999 | 5,882 |
Total operating expenses | 4,776 | 5,102 | 15,222 | 17,496 |
Operating loss before other income (expense), net | (572) | (405) | (950) | (4,001) |
Other income (expense), net: | ||||
Interest expense, net | (1,343) | (1,175) | (4,264) | (3,571) |
Change in fair value of warrant liability | 81 | 132 | 77 | 5,316 |
Other income, net | 0 | 3 | 6 | (1) |
Loss on extinguishment of debentures | (11,799) | 0 | (11,799) | 0 |
Other income (expense), net | (13,061) | (1,040) | (15,980) | 1,744 |
Loss before income taxes | (13,633) | (1,445) | (16,930) | (2,257) |
Income tax expense | 38 | 64 | 181 | 191 |
Net loss | $ (13,671) | $ (1,509) | $ (17,111) | $ (2,448) |
Net loss per common share - basic and diluted (in dollars per share) | $ (3.32) | $ (0.71) | ||
Shares used in computing net loss per basic and diluted common share (in shares) | 2,477,743 | 2,135,952 | ||
Net loss per Preferred C share - basic and diluted (in dollars per share) | $ (1,235.43) | $ 0 | $ (2,208.96) | $ 0 |
Shares used in computing net loss per basic and diluted Preferred C share (in shares) | 4,400 | 0 | 1,483 | 0 |
Net loss per common share: | ||||
Basic (in dollars per share) | $ (5.94) | $ (1.16) | ||
Diluted (in dollars per share) | $ (5.94) | $ (3.55) | ||
Shares used in computing net loss per common share: | ||||
Basic (in shares) | 2,328,274 | 2,107,365 | ||
Diluted (in shares) | 2,328,274 | 2,189,543 | ||
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | $ 0 | $ (1) | $ 0 | $ 1 |
Comprehensive loss | $ (13,671) | $ (1,510) | $ (17,111) | $ (2,447) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - 9 months ended Sep. 30, 2017 - USD ($) $ in Thousands | Preferred Stock [Member]Series B Convertible Preferred Stock [Member] | Preferred Stock [Member]Series C Convertible Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Accumulated Other Comprehensive Loss [Member] | Total | Series C Convertible Preferred Stock [Member] |
Beginning balance at Dec. 31, 2016 | $ 1 | $ 2 | $ 225,289 | $ (210,575) | $ 2 | $ 14,719 | ||
Beginning balance (in shares) at Dec. 31, 2016 | 6,000 | 2,166,898 | ||||||
Stock-based compensation | $ 0 | $ 0 | 136 | 0 | 0 | 136 | ||
Conversion of senior secured convertible debentures | $ 0 | $ 0 | 262 | 0 | 0 | 262 | ||
Conversion of senior secured convertible debentures (in shares) | 0 | 70,000 | ||||||
Conversion of convertible preferred stock | $ (1) | $ 1 | 0 | 0 | 0 | 0 | ||
Conversion of convertible preferred stock (in shares) | (3,072) | 239,500 | ||||||
Issuance of common stock for fractional shares in reverse stock split (in shares) | 1,345 | |||||||
Issuance of convertible preferred stock in exchange for convertible debentures | $ 4 | $ 0 | 25,906 | 0 | 0 | 25,910 | ||
Issuance of convertible preferred stock in exchange for convertible debentures (in shares) | 40,482 | |||||||
Net loss | $ 0 | $ 0 | 0 | 0 | (17,111) | 0 | (17,111) | $ (3,276) |
Ending balance at Sep. 30, 2017 | $ 0 | $ 4 | $ 3 | $ 251,594 | $ (227,686) | $ 2 | $ 23,917 | |
Ending balance (in shares) at Sep. 30, 2017 | 2,928 | 40,482 | 2,477,743 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (17,111) | $ (2,448) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 4,811 | 4,844 |
Provision for doubtful accounts | 58 | 91 |
Loss on disposal of property, plant and equipment | 0 | 124 |
Gain on cancelation of distributor rights agreement | (40) | 0 |
Intangible asset write-off | 23 | 0 |
Stock-based compensation | 136 | 401 |
Deferred tax provision | 180 | 180 |
Amortization of debt discount | 2,344 | 1,821 |
Amortization of deferred financing costs | 171 | 145 |
Loss on extinguishment of debt | 11,799 | 0 |
Change in fair value of warrant liability | (77) | (5,316) |
Changes in operating assets and liabilities: | ||
Accounts receivable | 130 | 1,041 |
Inventories | (716) | 899 |
Prepaid expenses and other assets | 406 | 202 |
Accounts payable | 71 | (2,559) |
Other accrued liabilities | (162) | (623) |
Other liabilities | 108 | (40) |
Deferred revenues | 115 | 154 |
Net cash provided by (used in) operating activities | 2,246 | (1,084) |
Cash Flows From Investing Activities: | ||
Lasers placed-in-service, net | (1,450) | (607) |
Purchases of property and equipment, net | (321) | 0 |
Payments on distributor rights liability | (115) | 0 |
Acquisition costs, net of cash received | 0 | 125 |
Restricted cash | 0 | 15 |
Net cash used in investing activities | (1,886) | (467) |
Cash Flows From Financing Activities: | ||
Proceeds from long-term debt | 0 | 1,500 |
Repayments of long-term debt | (857) | 0 |
Payments on notes payable | (304) | (299) |
Net cash (used in ) provided by financing activities | (1,161) | 1,201 |
Effect of exchange rate changes on cash | 0 | 4 |
Net decrease in cash and cash equivalents | (801) | (346) |
Cash and cash equivalents, beginning of period | 3,928 | 3,303 |
Cash and cash equivalents, end of period | 3,127 | 2,957 |
Supplemental information: | ||
Cash paid for interest | 1,934 | 1,517 |
Supplemental information of non-cash investing and financing activities: | ||
Conversion of senior secured convertible debentures into common stock | 262 | 248 |
Conversion of series A convertible preferred stock into common stock | 309 | |
Recognition of warrants issued as debt discount | 0 | 47 |
Reclassification of warrant liabilities to equity | 0 | 1,541 |
Acquisition of distributor rights asset and license liability | 286 | 0 |
Issuance of convertible preferred stock in exchange for convertible debentures | $ 25,910 | $ 0 |
The Company
The Company | 9 Months Ended |
Sep. 30, 2017 | |
The Company [Abstract] | |
The Company | Note 1 The Company: Background STRATA Skin Sciences, Inc. (and its subsidiary) ("STRATA" or "we" or the "Company") is a medical technology company focused on the therapeutic and aesthetic dermatology market. STRATA sales include the following products: XTRAC ® ® The XTRAC is an ultraviolet light excimer laser system utilized to treat psoriasis, vitiligo and other skin diseases. The XTRAC received FDA clearance in 2000 and has since become a recognized treatment among dermatologists. The system delivers targeted 308um ultraviolet light to affected areas of the skin, leading to psoriasis clearing and vitiligo repigmentation, following a series of treatments. As of September 30, 2017, there were 776 XTRAC systems placed in dermatologists' offices in the United States under the Company's recurring revenue business model. The XTRAC systems employed under the recurring revenue model generate revenue on a per procedure basis. The per-procedure charge is inclusive of the use of the system and the services provided by the Company to the customer which includes system maintenance, reimbursement support service and participation in the direct to patient marketing programs employed by the Company. The XTRAC system's use for psoriasis is covered by nearly all major insurance companies, including Medicare. The VTRAC Excimer Lamp system, offered in addition to the XTRAC system internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with the simplicity of design and reliability of a lamp system. Effective March 1, 2017, the Company entered into an agreement to license the exclusive US distribution rights for the Ellipse family of products, Nordlys, from Ellipse USA ("Ellipse") through December 31, 2019. The agreement was to be renewed if certain minimum purchase requirements were achieved and an approximate $33 monthly license fee was paid, for a contractual total license fee of $1.1 million over the Initial Term. On October 26, 2017, by mutual agreement of the three parties involved in the transaction, the Company, Ellipse USA and the manufacturer Ellipse A/S, cancelled the agreement with Ellipse USA retroactively effective to August 9, 2017, and the Company entered into two new agreements. Under the new agreements the Company will have The license fee amounts to approximately $355 over the Initial Term with a present value as of the effective date of the agreement of $286. As a result of the termination of the old agreement and the signing of the new agreements the Company reversed the intangible asset and corresponding liability recorded on March 1, 2017 (which resulted in a $40 gain) and recorded the distribution rights at the present value of the payments under the new agreements. See Note 4 , Intangibles, net , for additional information. Effective February 1, 2017, the Company entered into an exclusive OEM distribution agreement with Esthetic Education, LLC to be the exclusive marketer and seller of private label versions of the SkinStylus MicroSystem and associated parts under the name of STRATAPen. This three-year agreement allows for two one year extensions. Effective April 6, 2017, the Company completed a reverse stock split of its common stock at a ratio of 1-for-5 shares, and all data on common stock and equivalents are shown herein as reflective of this reverse stock split. As of September 30, 2017, the Company had an accumulated deficit of $227,686 and had been incurring losses since inception as well as negative cash flows from operations until 2016. To date, the Company has dedicated most of its financial resources to research and development, sales and marketing, and general and administrative expenses. Management believes that its cash and cash equivalents as of September 30, 2017 combined with the anticipated revenues from the sale of the Company's products will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, payments of the long-term debt as they become due and other liquidity requirements associated with its existing operations through the next twelve months following the filing of this Form 10-Q. Basis of Presentation Accounting Principles The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. Unaudited interim consolidated financial statements The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the consolidated balance sheets, consolidated statements of operations, consolidated statements of cash flows and consolidated statements of stockholders' equity, for the periods presented in accordance with GAAP. The consolidated balance sheet at December 31, 2016, has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 ("2016 Form 10-K"), and other forms filed with the SEC from time to time. Reclassification Certain reclassifications from the prior year presentation have been made to conform to the current year presentation. These reclassifications did not have a material impact on the Company's financial statements. Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our 2016 Form 10-K, and there have been no changes to the Company's significant accounting policies during the three and nine months ended September 30, 2017. Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As of September 30, 2017, the more significant estimates include (1) revenue recognition, in regards to deferred revenues and valuation allowances of accounts receivable, (2) the estimated useful lives of intangible assets and property and equipment, (3) the inputs used in determining the fair value of equity-based awards, (4) the valuation allowance related to deferred tax assets and (5) the fair value of financial instruments, including derivative instruments. Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification 820, Fair Value Measurements and Disclosures • Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. • Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. • Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company's recurring fair value measurements at September 30, 2017 and December 31, 2016 are as follows: Fair Value as of September 30, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 8) $ 28 $ - $ - $ 28 Fair Value as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 8) $ 105 $ - $ - $ 105 The fair value of cash and cash equivalents are based on their respective demand value, which are equal to the carrying value. The fair value of derivative warrant liabilities is estimated using option pricing models that are based on the fair value of the Company's common stock as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative warrant liabilities are the only recurring Level 3 fair value measures. The carrying value of all other short-term monetary assets and liabilities is estimated to approximate their fair value due to the short-term nature of these instruments. The Company assessed its long-term debt (including the current portion) and determined that the fair value of total debt was $10,778 as of September 30, 2017. As of December 31, 2016 the fair value of long-term debt and convertible debentures was $20,082. Several of the warrants outstanding as of September 30, 2017 and 2016 have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon change in control of the Company and other warrants as of September 30, 2016 contained full ratchet provisions that reduce the exercise price of the warrants in the event of a transaction resulting in the issuance of equity below the current price of the warrants. Therefore these warrants are, or were, classified as derivatives. These warrants have been recorded at their fair value using a binomial option pricing model and will be recorded at their respective fair value at each subsequent balance sheet date. See Note 8, Warrants Earnings Per Share The Company calculates net income (loss) per share in accordance with ASC 260, Earnings per Share. Under ASC 260, basic net income (loss) per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the reporting period and excludes dilution for potentially dilutive securities. Diluted earnings per share ("EPS") gives effect to dilutive options, warrants and other potential common shares outstanding during the period. The Company's Series C Preferred Shares are subordinate to all other securities at the same subordination level as common stock and they participate in all dividends and distributions declared or paid with respect to common stock of the Company, on an as-converted basis. Therefore, the Series C Preferred Shares meet the definition of common stock under ASC 260. Earnings per share is presented for each class of security meeting the definition of common stock. The net loss is allocated to each class of security meeting the definition of common stock based on their contractual terms. The following table presents the calculation of basic and diluted net loss per share by each class of security for the three and nine months ended September 30, 2017: For the Three Months ended September 30, 2017 For the Three Months ended September 30, 2017 Common stock Series C Preferred stock Common stock Series C Preferred stock Net loss $ (8,235 ) $ (5,436 ) $ (13,835 ) $ (3,276 ) Weighted average number of shares outstanding during the period 2,477,743 4,400 2,328,274 1,483 Basic and Diluted net loss per share $ (3.32 ) $ (1,235.43 ) $ (5.94 ) $ (2,208.96 ) For the three and nine months ended September 30, 2017 and the three months ended September 30, 2016, diluted net loss per common share is equal to the basic net loss per common share since all potentially dilutive securities are anti-dilutive. The gain on the change in fair value of the warrant liability was considered when calculating the diluted earnings per share and was deemed to be antidilutive. For the nine months ended September 30, 2016 diluted earnings per common share is computed by the numerator effected by the gain on the change in fair value of the warrant liability and the denominator is increased to include the number of additional potential common shares from the warrants underlying the warrant liability. Diluted earnings per common share were calculated using the following net loss and weighted average shares outstanding for the nine months ended September 30, 2016: Nine Months Ended September 30, 2016 Net loss $ (2,448 ) Gain on the change in fair value of the warrant liability (5,316 ) Diluted earnings $ (7,764 ) Weighted average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 2,107,365 Effect of warrants 82,178 Diluted number of common and common stock equivalent shares outstanding 2,189,543 The weighted average of potential common stock equivalents outstanding during the three and nine months ended September 30, 2017 and 2016 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock and common stock options, which are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Common stock equivalents of convertible debentures 7,546,299 8,541,577 8,191,777 8,561,343 Common stock purchase warrants 2,406,625 2,656,816 2,406,625 2,724,584 Common stock equivalents of convertible Preferred B stock 228,336 493,782 343,261 502,661 Common stock options 855,389 600,914 873,554 563,155 Total 11,036,649 12,293,089 11,815,217 12,351,743 Adoption of New Accounting Standards In January 2017, the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") Clarifying the Definition of a Business Note 4 Intangibles, net In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting The adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes the adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In July 2015, The FASB issued ASU 2015-11 , Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 outlines that inventory within the scope of its guidance be measured at the lower of cost and net realizable value. Prior to the issuance of ASU 2015-11, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). For a public entity, the amendments in ASU 2015-11 are effective, in a prospective manner, for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period (the first quarter of fiscal year 2017 for the Company). Recently Issued Accounting Standards In July 2017, the FASB issued a two-part ASU 2017-11, "(Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception." For public business entities, the amendments in Part 1 of ASU 2017-11 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 2 of ASU 2017-11 do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact of this guidance on the Company's condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. If applicable, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The amendments in this guidance are effective for public business entities for annual and interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 with early adoption permitted after January 1, 2017. The Company is currently evaluating the impact of this guidance on the Company's condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, This statement requires lessees to present right-of-use assets and lease liabilities on the balance sheet. The standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its financial condition and results of operations. In May 2014, The FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606) We are still evaluating the ASU for its potential impact on our consolidated financial statements. We currently plan to adopt the ASU using the "modified retrospective" approach, which requires the cumulative effect of initially applying the guidance to be recognized as an adjustment to our accumulated deficit as of the January 1, 2018 adoption date. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2017 | |
Inventories [Abstract] | |
Inventories | Note 2 Inventories: September 30 , December 31, 2016 (unaudited) Raw materials and work in progress $ 2,448 $ 2,440 Finished goods 1,085 377 Total inventories $ 3,533 $ 2,817 Work-in-process is immaterial, given the Company's typically short manufacturing cycle, and therefore is disclosed in conjunction with raw materials. |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 3 Property and Equipment, net: September 30, 2017 December 31, 2016 (unaudited) Lasers placed-in-service $ 18,018 $ 16,712 Equipment, computer hardware and software 468 160 Furniture and fixtures 118 111 Leasehold improvements 31 25 18,635 17,008 Accumulated depreciation and amortization (9,977 ) (6,828 ) Property and equipment, net $ 8,658 $ 10,180 Depreciation and related amortization expense was $3,292 and $3,482 for the nine months ended September 30, 2017 and 2016, respectively. |
Intangibles, net
Intangibles, net | 9 Months Ended |
Sep. 30, 2017 | |
Intangibles, net [Abstract] | |
Intangibles, net | Note 4 Intangibles, net: Set forth below is a detailed listing of definite-lived intangible assets: September 30, 2017 December 31, 2016 (unaudited) Core technology $ 5,700 $ 5,974 Product technology 2,000 2,000 Customer relationships 6,900 6,900 Tradenames 1,500 1,500 Distribution rights 286 - 16,386 16,374 Accumulated amortization (4,084 ) (2,962 ) Patents and licensed technologies, net $ 12,302 $ 13,412 Related amortization expense was $1,519 and $1,362 for the nine months ended September 30, 2017 and 2016, respectively. During the three and nine months ended September 30, 2017, the Company wrote off core technology of $274 and accumulated amortization of $251 related to the discontinuance of the MELAfind product. The value written off of $23 was recorded in cost of revenues. Estimated amortization expense for amortizable patents and licensed technologies assets for the future periods is as follows: Remaining 2017 $ 476 2018 1,905 2019 1,905 2020 1,670 2021 1,410 Thereafter 4,936 Total $ 12,302 As discussed in Note 1 |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2017 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 5 Other Accrued Liabilities: September 3 0 December 31, 2016 (unaudited) Accrued warranty, current $ 98 $ 102 Accrued compensation, including commissions and vacation 861 1,177 Accrued sales and other taxes 520 439 Distributor rights liability, current 82 - Accrued professional fees and other accrued liabilities 338 274 Total other accrued liabilities $ 1,899 $ 1,992 |
Convertible Debentures
Convertible Debentures | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Debentures [Abstract] | |
Convertible Debentures | Note 6 Convertible Debentures: In the following table is a summary of the Company's convertible debentures. December 31, 2016 Senior secured 2.25% convertible debentures, net of unamortized debt discount of $24,314; and deferred financing costs of $524 $ 7,174 Senior secured 4% convertible debentures, net of unamortized debt discount of $3,469; and deferred financing costs of $392 4,854 Total convertible debt $ 12,028 The total outstanding convertible debentures was exchanged for convertible Preferred C stock on September 20, 2017, thus there was no remaining outstanding balance as of September 30, 2017. The Company issued $32,500 aggregate principal amount of Debentures (the "June 2015 Debentures") that, subject to certain ownership limitations and stockholder approval conditions, was convertible into 8,666,668 shares of Company common stock at an initial conversion price of $3.75 per share. The Debentures were bearing interest at the rate of 2.25% per year, and, unless previously converted, were to mature on the five-year anniversary of the date of issuance, June 22, 2020. The June 2015 Debentures included a beneficial conversion feature valued at $27,300 that was recorded as a discount to the debentures. On the date of issuance the beneficial conversion feature value was calculated as the difference resulting from subtracting the conversion price of $3.75 from $6.90, the opening market value of the Company's common stock following the announcement of the transaction, multiplied by the number of common shares into which the June 2015 Debentures were convertible. On July 21, 2014, the Company entered into a definitive Securities Purchase Agreement (the "Purchase Agreement") with institutional investors (the "Investors") providing for the issuance of Senior Secured Convertible Debentures in the aggregate principal amount of $15,000, due, subject to the terms therein, in July 2019 (the "July 2014 Debentures"), and warrants (the "July 2014 Series A Warrants") to purchase up to an aggregate of 1,239,769 shares of common stock, $0.001 par value per share, at an exercise price of $12.25 per share expiring in July 2019. The July 2014 Debentures were bearing interest at an annual rate of 4%, payable quarterly or upon conversion into shares of common stock. The Debentures were convertible at any time into an aggregate of 1,169,595 shares of common stock at an initial conversion price of $12.825 per share. The Company's obligations under the July 2014 Debentures was secured by a first priority lien on all of the Company's intellectual property pursuant to the terms of a security agreement ("Security Agreement") dated July 21, 2014 among the Company and the Investors. In connection with the Purchase Agreement, the Company entered into a Registration Rights Agreement with the Investors pursuant to which the Company was obligated to file a registration statement to register for resale the shares of Common Stock issuable upon conversion of the Series B Preferred Stock (See Note 8, Warrants For financial reporting purposes, out of the $15,000 funded by the Investors on July 21, 2014 $5,296 was allocated first to the Warrants issued, then $4,565 to the intrinsic value of the beneficial conversion feature on the July 2014 Debentures. The balance was further reduced by the fair value of warrants issued to the placement agent for services rendered of $491, resulting in an initial carrying value of the Debentures of $4,647. The initial debt discount on the July 2014 Debentures totaled $10,353 and was being amortized using the effective interest method over the five year life of the July 2014 Debentures. During the nine months ended September 30, 2017, the investors converted debentures amounting to $262 into 70,000 shares of common stock for the June 2015 note. The debt discount and deferred financing cost adjustment resulting from the conversions increased interest expense by $197 for the nine months ended September 30, 2017. As a condition of the new note facility (See Note 7 Long-term Debt On June 6, 2017, the Company entered into a Securities Exchange Agreement (the "Agreement") with the holders of its 2.25% Senior Series A Secured Convertible Debentures due June 30, 2021 and 4% Senior Secured Convertible Debentures due July 30, 2021, pursuant to which the holders have agreed to exchange all of such outstanding debentures into shares of newly created Series C Convertible Preferred Stock. The elimination of the senior secured debt will also eliminate the Company's obligation to pay approximately $4,000 of interest payments over the next four years. The stockholders approved the exchange at the stockholders' meeting held on September 14, 2017. The closing of the exchange was effective on September 20, 2017 and $40,465 of principle was exchanged for 40,482 shares of Series C Preferred Stock. In accordance with ASC Topic 470, Debt, the aforementioned exchange was treated as an extinguishment of debt. As there was no intrinsic value for the conversion feature on the date of extinguishment, none of the proceeds were allocated to the extinguishment of the beneficial conversion feature. As such, the difference between the fair value of the convertible preferred stock issued (determined based on the market value of the underlying common stock) and the net carrying value of the convertible debentures (adjusted for unamortized premium discount), of $11,799 was recognized as a loss on extinguishment of debentures. Other than the limitations on conversions to keep each such holders beneficial ownership below 9.99%, the terms of the Series C Convertible Preferred Stock generally bestow the same rights to each holder as such holder would receive if they are common stock shareholder and are not redeemable by the holders, except the Series C Convertible Preferred Stock shares do not have voting rights. The Series C Convertible Preferred Stock have the same level of subordination as common stock. Each share of Series C Convertible Preferred Stock has a stated value of $1,000 and is convertible into 372 shares of common stock (at a conversion price equal to $2.69) for a total of approximately 15,049,000 shares of common stock. |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2017 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 7 Long-term Debt: September 30, 2017 December 31, 2016 (unaudited) Term note, net of debt discount of $177 and $258, respectively; and deferred financing cost of $188 and $276, respectively $ 10,778 $ 11,466 Less: current portion (1,936 ) (1,714 ) Total long-term debt $ 8,842 $ 9,752 Term-Note Credit Facility On December 30, 2015, the Company entered into a $12,000 credit facility pursuant to a Credit and Security Agreement (the "Agreement") and related financing documents with MidCap Financial Trust ("MidCap") and the lenders listed therein. Under the Agreement, the credit facility may be drawn down in two tranches, the first of which was drawn for $10,500 on December 30, 2015. The proceeds of this first tranche were used to repay $10,000 principal amount of short-term senior secured promissory notes, plus associated interest, loan fees and expenses. The second tranche was drawn for $1,500 on January 29, 2016. The Company's obligations under the credit facility are secured by a first priority lien on all of the Company's assets. This credit facility includes both financial and non-financial covenants, including a minimum net revenue covenant, beginning in January 2016. The Company is in compliance with these covenants as of September 30, 2017. On November 10, 2017, the minimum net revenue covenant was amended prospectively. Additionally on November 10, 2017, the Company entered into an amendment to modify the principal payments including a period of six months where there is no principal payments due. Interest rate on the credit facility is one month LIBOR plus 8.25%, subject to a LIBOR floor of 0.5% (9.49% as of September 30, 2017). As of September 30, 2017 the net balance of long-term debt is $8,842. The following table summarizes the future payments that the Company expects to make for the long-term debt for the future periods: Remaining in 2017 $ 572 2018 2,387 2019 4,092 2020 4,092 $ 11,143 |
Warrants
Warrants | 9 Months Ended |
Sep. 30, 2017 | |
Warrants [Abstract] | |
Warrants | Note 8 Warrants: The Company accounts for warrants that require net cash settlement upon change of control of the Company and warrants that have provisions that protect holders from a decline in the issue price of its common stock (or "down-round" provisions) as liabilities instead of equity. Warrants with "downround" provisions did not exist as of or during the nine months ended September 30, 2017 or as of December 31, 2016. The Company recognizes these liabilities at the fair value on each reporting date. The Company computed the value of the warrants using the binomial method. A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of September 30, 2017 and December 31, 2016 is as follows: September 30, 2017 December 31, 2016 Number of shares underlying the warrants 403,090 403,090 Stock price $ 1.77 $ 2.20 Volatility 48.00 % 47.00 % Risk-free interest rate 1.31 – 1.45 % 1.22 % Expected dividend yield 0 % 0 % Expected warrant life 1.37 – 1.60 years 2.12 – 2.35 years Recurring Level 3 Activity and Reconciliation The tables below provide a reconciliation of the beginning and ending balances for the liability measured at fair value using significant unobservable inputs (Level 3). The table reflects gains and losses for the nine month periods ended September 30, 2017 and 2016, for all financial liabilities categorized as Level 3 as of September 30, 2017 and September 30, 2016, respectively. Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Issuance Date December 31, 2016 Decrease in Fair Value September 30, 2017 10/31/2013 $ 39 $ (28 ) $ 11 2/5/2014 66 ( 49 ) 17 Total $ 105 $ (77 ) $ 28 Issuance Date December 31, 2015 Decrease in Fair Value Reclassification to Equity September 30, 2016 10/31/2013 $ 379 $ (312 ) $ - $ 67 2/5/2014 715 (597 ) - 118 7/24/2014 Series A 2,415 (1,573 ) (842 ) - 7/24/2014 Series B 1,726 (1,713 ) (13 ) - 6/22/2015 1,807 (1,121 ) (686 ) - Total $ 7,042 $ (5,316 ) $ (1,541 ) $ 185 Number of Warrants Subject to Remeasurement: Issuance Date September 30, 2017 10/31/2013 137,143 2/5/2014 265,947 Total 403,090 |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity [Abstract] | |
Stockholders' Equity | Note 9 Stockholders' Equity: Common Stock and Warrants Outstanding common stock warrants consist at September 30, 2017 of the following: Issue Date Expiration Date Total Warrants Exercise Price 4/26/2013 4/26/2018 13,865 $ 55.90 10/31/2013 4/30/2019 137,143 $ 3.75 2/5/2014 2/5/2019 265,947 $ 3.75 7/24/2014 7/24/2019 1,239,769 $ 3.75 - $ 12.25 6/22/2015 6/22/2020 600,000 $ 3.75 12/30/2015 12/30/2020 130,089 $ 5.65 1/29/2016 1/29/2021 19,812 $ 5.30 2,406,625 |
Stock-based compensation
Stock-based compensation | 9 Months Ended |
Sep. 30, 2017 | |
Stock-based compensation [Abstract] | |
Stock-based compensation | Note 10 Stock-based compensation: At September 30, 2017, the Company had 855,389 options outstanding with a weighted-average exercise price of $4.93 and a weighted average remaining contractual life of 8.5 years. 401,077 options are vested and exercisable. Stock-based compensation expense, primarily included in general and administration, for the three and nine months ended September 30, 2017 was $63 and $136, respectively. For the three and nine months ended September 30, 2016 stock-based compensation was $116 and $401, respectively. As of September 30, 2017 there was $211 in unrecognized compensation expense, which will be recognized over a weighted average period of 2.75 years. |
Income taxes
Income taxes | 9 Months Ended |
Sep. 30, 2017 | |
Income taxes [Abstract] | |
Income taxes | Note 11 Income taxes: The Company accounts for income taxes using the asset and liability method for deferred income taxes. The provision for income taxes includes deferred taxes resulting from temporary differences between the financial statement and tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Income tax expense of $38 and $181 for the three and nine months ended September 30, 2017 and $64 and $191 for the three and nine months ended September 30, 2016, was comprised primarily of the change in deferred tax liability related to goodwill. Goodwill is an amortizing asset according to tax regulations. This generates a deferred tax liability that is not used to offset deferred tax assets for valuation allowance considerations. |
Business Segments and Geographi
Business Segments and Geographic Data | 9 Months Ended |
Sep. 30, 2017 | |
Business Segments and Geographic Data [Abstract] | |
Business Segments and Geographic Data | Note 12 Business Segments and Geographic Data: The Company organized its business into three operating segments to better align its organization based upon the Company's management structure, products and services offered, markets served and types of customers, as follows: The Dermatology Recurring Procedures segment derives its revenues from the XTRAC procedures performed by dermatologists. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. The Dermatology Imaging segment generated revenues from the sale and usage of imaging devices. The Company has announced that it will no longer support the imaging devices effective September 30, 2017 thus there will be minimal continuing revenues for this segment. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other financing income (expense), net is also not allocated to the operating segments. The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended September 30, 2017 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 5,720 $ 1,751 $ 9 $ 7,480 Costs of revenues 2,084 967 225 3,276 Gross profit 3,636 784 (216 ) 4,204 Gross profit % 63.6 % 44.8 % (2400.0 %) 56.2 % Allocated operating expenses: Engineering and product development 348 63 - 411 Selling and marketing expenses 2,238 449 - 2,687 Unallocated operating expenses - - - 1,678 2,586 512 - 4,776 Income (loss) from operations 1,050 272 (216 ) (572 ) Interest expense, net - - - (1,343 ) Change in fair value of warrant liability - - - 81 Loss on extinguishment of debt - - - (11,799 ) Income (loss) before income taxes $ 1,050 $ 272 $ (216 ) $ (13,633 ) Three Months Ended September 30, 2016 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 6,205 $ 1,550 $ 12 $ 7,767 Costs of revenues 2,162 877 31 3,070 Gross profit 4,043 673 ( 19 ) 4,697 Gross profit % 65.2 % 43.4 % (158.3 %) 60.5 % Allocated operating expenses: Engineering and product development 343 31 8 382 Selling and marketing expenses 2,767 57 16 2,840 Unallocated operating expenses - - - 1,880 3,110 88 24 5,102 Income (loss) from operations 933 585 (43 ) (405 ) Interest expense, net - - - (1,175 ) Change in fair value of warrant liability - - - 132 Other income (expense), net - - - 3 Income (loss) before income taxes $ 933 $ 585 $ (43 ) $ (1,445 ) Nine Months Ended September 30, 2017 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 17,653 $ 5,784 $ 17 $ 23,454 Costs of revenues 5,969 2,988 225 9,182 Gross profit 11,684 2,796 ( 208 ) 14,272 Gross profit % 66.2 % 48.3 % (1223.5 %) 60.9 % Allocated operating expenses: Engineering and product development 1,104 204 1 1,309 Selling and marketing expenses 7,747 1,167 - 8,914 Unallocated operating expenses - - - 4,999 8,851 1,371 1 15,222 Income (loss) from operations 2,833 1,425 (209 ) (950 ) Interest expense, net - - - (4,264 ) Change in fair value of warrant liability - - - 77 Extinguishment of debt - - - (11,799 ) Other income (expense), net - - - 6 Income (loss) before income taxes $ 2,833 $ 1,425 $ (209 ) $ (16,930 ) Nine Months Ended September 30, 2016 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 17,826 $ 5,174 $ 126 $ 23,126 Costs of revenues 6,723 2,641 267 9,631 Gross profit 11,103 2,533 ( 141 ) 13,495 Gross profit % 62.3 % 49.0 % (111.9 %) 58.4 % Allocated operating expenses: Engineering and product development 977 147 417 1,541 Selling and marketing expenses 9,626 261 186 10,073 Unallocated operating expenses - - - 5,882 10,603 408 603 17,496 Income (loss) from operations 500 2,125 (744 ) (4,001 ) Interest expense, net - - - (3,571 ) Change in fair value of warrant liability - - - 5,316 Other income (expense), net - - - (1 ) Income (loss) before income taxes $ 500 $ 2,125 $ (744 ) $ (2,257 ) For the three and nine months ended September 30, 2017 and 2016 there were no material net revenues attributable to any individual foreign country. Net revenues by geographic area were, as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Domestic $ 6,337 $ 6,287 $ 19,612 $ 18,444 Foreign 1,143 1,480 3,842 4,682 $ 7,480 $ 7,767 $ 23,454 $ 23,126 Long-lived assets were 100% located in domestic markets as of September 30, 2017 and December 31, 2016. |
Significant Customer Concentrat
Significant Customer Concentration | 9 Months Ended |
Sep. 30, 2017 | |
Significant Customer Concentration [Abstract] | |
Significant Customer Concentration | Note 13 Significant Customer Concentration: For the three months ended September 30, 2017, revenues from sales to the Company's international master distributor (GlobalMed Technologies) were $1,148, or 15.3%, of total revenues for such period. For the nine months ended September 30, 2017, revenues from sales to the Company's international master distributor were $3,861, or 16.5%, of total revenues for such period. At September 30, 2017, the accounts receivable balance from GlobalMed Technologies was $418, or 13.1%, of total net accounts receivable. For the three months ended September 30, 2016, revenues from sales to the Company's international master distributor were $1,457, or 18.8%, of total revenues for such period. For the nine months ended September 30, 2016, revenues from sales to the Company's international master distributor were $4,604, or 19.9%, of total revenues for such period. No other customer represented more than 10% of total company revenues for the three and nine months ended September 30, 2017 and 2016. No other customer represented more than 10% of total accounts receivable as of September 30, 2017. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2017 | |
Related Parties [Abstract] | |
Related Parties | Note 14 Related Parties: On June 22, 2015, the Company entered into a securities purchase agreement with the Purchasers, including certain funds managed by Sabby Management, LLC and Broadfin Capital LLC (existing Company shareholders), in connection with a private placement. The Purchasers were issued Warrants to purchase an aggregate of 0.6 million shares of common stock, having an exercise price of $3.75 per share. We also issued $32.5 million aggregate principal amount of Debentures that, subject to certain ownership limitations and stockholder approval conditions, were convertible into 8,666,668 shares of common stock at an initial conversion price of $3.75 per share. The Debentures were bearing interest at the rate of 2.25% per year, and, unless previously converted, were to mature on the five-year anniversary of the date of issuance. Refer to Note 6 On June 6, 2017, the Company entered into a Securities Exchange Agreement (the "Agreement") with the holders of its 2.25% Senior Series A Secured Convertible Debentures due June 30, 2021 and 4% Senior Secured Convertible Debentures due July 30, 2021, pursuant to which the holders have agreed to exchange all of such outstanding debentures into shares of newly created Series C Convertible Preferred Stock. The elimination of the senior secured debt will also eliminate the Company's obligation to pay approximately $4,000 of interest payments over the next four years. The stockholders approved the exchange at the stockholders' meeting held on September 14, 2017. The closing of the exchange was effective on September 20, 2017 and $40,465 of principle was exchanged for 40,482 shares of Series C Preferred Stock. In accordance with ASC Topic 470, Debt, the aforementioned exchange was treated as an extinguishment of debt. As there was no intrinsic value for the conversion feature on the date of extinguishment, none of the proceeds were allocated to the extinguishment of the beneficial conversion feature. As such, the difference between the fair value of the convertible preferred stock issued (determined based on the market value of the underlying common stock) and the net carrying value of the convertible debentures (adjusted for unamortized premium discount), of $11,799 was recognized as a loss on extinguishment of debentures. Other than the limitations on conversions to keep each such holders beneficial ownership below 9.99%, the terms of the Series C Convertible Preferred Stock generally bestow the same rights to each holder as such holder would receive if they are common stock shareholder and are not redeemable by the holders, except that the Series C Convertible Preferred Stock shares do not have voting rights. The Series C Convertible Preferred Stock have the same level of subordination as common stock. Each share of Series C Convertible Preferred Stock has a stated value of $1,000 and is convertible into shares of common stock at a conversion price equal to $2.69 for a total of approximately 15,049,000 common stock. On November 4, 2015, the Company entered into consulting agreements with two of its directors, Jeffrey F. O'Donnell, Sr. and Samuel E. Navarro, the terms of which are the same. Under the terms of their respective agreements, each director agrees to provide strategic support, advice and guidance to the Company and its management team in connection with the integration and operation of the expanded business, investor relations and internal and external business development activities. The consultant will make himself available to the Company's President and Chief Executive Officer and the management team on request at mutually convenient times and will report to the Board of Directors quarterly and otherwise when requested by the Board. The agreements had been extended through June 30, 2017. The directors were each to be paid an up-front fee of $40 for advice and services rendered prior to the date of the agreement, During the current quarter, Modevity LLC ("Modevity"), the developer of the ARALOC Secure Content Distribution Platform, a software system for sharing proprietary and / or confidential content files over the internet and allowing its users to collaborate securely from any mobile or desktop device, has provided certain consulting services to the Company advising on the development of our digital media and marketing initiatives, including providing assistance in our first limited test of targeted advertising using Facebook. Our Board member, James Coyne, has been the Chief Executive Officer of Modevity since helping to found the company in April 2004. To date, Modevity has provided this assistance without charge to the Company. Should the Company continue to utilize Modevity's services, we expect to be charged at market rates for such assistance. Independent of these services provided by Modevity, the Company has received a proposal from and is in discussions with Olympic Media, a company founded by Ryan Coyne, the son of James Coyne, to create and execute a focused tactical plan to leverage new and existing digital assets across social and digital platforms to drive psoriasis and vitiligo sufferers to the Company's website and call center for conversion to new patient appointments. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 15 Commitments and Contingencies: Leases The Company has entered into various non-cancelable operating lease agreements for real property and three minor operating leases for personal property. These arrangements expire at various dates through 2019. As of September 30, 2017, aggregate annual minimum payments due under the Company's lease obligations are as follows: Year, 2017 (remaining three months) $ 113 2018 429 2019 160 Total $ 702 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 Subsequent Events: During October 2017, investors converted Series C Preferred Stock amounting to $4,299 into 1,598,346 shares of common stock. |
The Company (Policies)
The Company (Policies) | 9 Months Ended |
Sep. 30, 2017 | |
The Company [Abstract] | |
Liquidity | As of September 30, 2017, the Company had an accumulated deficit of $227,686 and had been incurring losses since inception as well as negative cash flows from operations until 2016. To date, the Company has dedicated most of its financial resources to research and development, sales and marketing, and general and administrative expenses. Management believes that its cash and cash equivalents as of September 30, 2017 combined with the anticipated revenues from the sale of the Company's products will be sufficient to satisfy its working capital needs, capital asset purchases, outstanding commitments, payments of the long-term debt as they become due and other liquidity requirements associated with its existing operations through the next twelve months following the filing of this Form 10-Q. |
Accounting Principles | Accounting Principles The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary. All significant intercompany balances and transactions have been eliminated in consolidation. |
Unaudited interim consolidated financial statements | Unaudited interim consolidated financial statements The accompanying interim consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to state fairly the consolidated balance sheets, consolidated statements of operations, consolidated statements of cash flows and consolidated statements of stockholders' equity, for the periods presented in accordance with GAAP. The consolidated balance sheet at December 31, 2016, has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three and nine months ended September 30, 2017 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2017, or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with US GAAP have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016 ("2016 Form 10-K"), and other forms filed with the SEC from time to time. |
Reclassification | Reclassification Certain reclassifications from the prior year presentation have been made to conform to the current year presentation. These reclassifications did not have a material impact on the Company's financial statements. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our 2016 Form 10-K, and there have been no changes to the Company's significant accounting policies during the three and nine months ended September 30, 2017. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As of September 30, 2017, the more significant estimates include (1) revenue recognition, in regards to deferred revenues and valuation allowances of accounts receivable, (2) the estimated useful lives of intangible assets and property and equipment, (3) the inputs used in determining the fair value of equity-based awards, (4) the valuation allowance related to deferred tax assets and (5) the fair value of financial instruments, including derivative instruments. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification 820, Fair Value Measurements and Disclosures • Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. • Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. • Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company's recurring fair value measurements at September 30, 2017 and December 31, 2016 are as follows: Fair Value as of September 30, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 8) $ 28 $ - $ - $ 28 Fair Value as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 8) $ 105 $ - $ - $ 105 The fair value of cash and cash equivalents are based on their respective demand value, which are equal to the carrying value. The fair value of derivative warrant liabilities is estimated using option pricing models that are based on the fair value of the Company's common stock as well as assumptions for volatility, remaining expected life, risk-free interest rate and, in some cases, credit spread. The derivative warrant liabilities are the only recurring Level 3 fair value measures. The carrying value of all other short-term monetary assets and liabilities is estimated to approximate their fair value due to the short-term nature of these instruments. The Company assessed its long-term debt (including the current portion) and determined that the fair value of total debt was $10,778 as of September 30, 2017. As of December 31, 2016 the fair value of long-term debt and convertible debentures was $20,082. Several of the warrants outstanding as of September 30, 2017 and 2016 have non-standard terms as they relate to a fundamental transaction and require a net-cash settlement upon change in control of the Company and other warrants as of September 30, 2016 contained full ratchet provisions that reduce the exercise price of the warrants in the event of a transaction resulting in the issuance of equity below the current price of the warrants. Therefore these warrants are, or were, classified as derivatives. These warrants have been recorded at their fair value using a binomial option pricing model and will be recorded at their respective fair value at each subsequent balance sheet date. See Note 8, Warrants |
Earnings Per Share | Earnings Per Share The Company calculates net income (loss) per share in accordance with ASC 260, Earnings per Share. Under ASC 260, basic net income (loss) per common share is calculated by dividing net income by the weighted-average number of common shares outstanding during the reporting period and excludes dilution for potentially dilutive securities. Diluted earnings per share ("EPS") gives effect to dilutive options, warrants and other potential common shares outstanding during the period. The Company's Series C Preferred Shares are subordinate to all other securities at the same subordination level as common stock and they participate in all dividends and distributions declared or paid with respect to common stock of the Company, on an as-converted basis. Therefore, the Series C Preferred Shares meet the definition of common stock under ASC 260. Earnings per share is presented for each class of security meeting the definition of common stock. The net loss is allocated to each class of security meeting the definition of common stock based on their contractual terms. The following table presents the calculation of basic and diluted net loss per share by each class of security for the three and nine months ended September 30, 2017: For the Three Months ended September 30, 2017 For the Three Months ended September 30, 2017 Common stock Series C Preferred stock Common stock Series C Preferred stock Net loss $ (8,235 ) $ (5,436 ) $ (13,835 ) $ (3,276 ) Weighted average number of shares outstanding during the period 2,477,743 4,400 2,328,274 1,483 Basic and Diluted net loss per share $ (3.32 ) $ (1,235.43 ) $ (5.94 ) $ (2,208.96 ) For the three and nine months ended September 30, 2017 and the three months ended September 30, 2016, diluted net loss per common share is equal to the basic net loss per common share since all potentially dilutive securities are anti-dilutive. The gain on the change in fair value of the warrant liability was considered when calculating the diluted earnings per share and was deemed to be antidilutive. For the nine months ended September 30, 2016 diluted earnings per common share is computed by the numerator effected by the gain on the change in fair value of the warrant liability and the denominator is increased to include the number of additional potential common shares from the warrants underlying the warrant liability. Diluted earnings per common share were calculated using the following net loss and weighted average shares outstanding for the nine months ended September 30, 2016: Nine Months Ended September 30, 2016 Net loss $ (2,448 ) Gain on the change in fair value of the warrant liability (5,316 ) Diluted earnings $ (7,764 ) Weighted average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 2,107,365 Effect of warrants 82,178 Diluted number of common and common stock equivalent shares outstanding 2,189,543 |
Adoption of New Accounting Standards | Adoption of New Accounting Standards In January 2017, the Financial Accounting Standards Board ("FASB") Accounting Standards Update ("ASU") Clarifying the Definition of a Business Note 4 Intangibles, net In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting The adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In November 2015, the FASB issued ASU 2015-17, Income Taxes, Balance Sheet Classification of Deferred Taxes the adoption of this ASU did not have a significant impact on the condensed consolidated financial statements. In July 2015, The FASB issued ASU 2015-11 , Simplifying the Measurement of Inventory (Topic 330) ("ASU 2015-11"). ASU 2015-11 outlines that inventory within the scope of its guidance be measured at the lower of cost and net realizable value. Prior to the issuance of ASU 2015-11, inventory was measured at the lower of cost or market (where market was defined as replacement cost, with a ceiling of net realizable value and floor of net realizable value less a normal profit margin). For a public entity, the amendments in ASU 2015-11 are effective, in a prospective manner, for annual reporting periods beginning after December 15, 2016, including interim periods within that reporting period (the first quarter of fiscal year 2017 for the Company). |
Recently Issued Accounting Standards | Recently Issued Accounting Standards In July 2017, the FASB issued a two-part ASU 2017-11, "(Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-controlling Interests with a Scope Exception." For public business entities, the amendments in Part 1 of ASU 2017-11 are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 2 of ASU 2017-11 do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact of this guidance on the Company's condensed consolidated financial statements. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new guidance eliminated Step 2 from the goodwill impairment test which was required in computing the implied fair value of goodwill. Instead, under the new amendments, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. If applicable, an entity should consider income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit when measuring the goodwill impairment loss. The amendments in this guidance are effective for public business entities for annual and interim goodwill impairment tests performed in fiscal years beginning after December 15, 2019 with early adoption permitted after January 1, 2017. The Company is currently evaluating the impact of this guidance on the Company's condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases, This statement requires lessees to present right-of-use assets and lease liabilities on the balance sheet. The standard is effective for public companies for annual periods beginning after December 15, 2018, including interim periods within those fiscal years. The Company is currently evaluating the effect the guidance will have on its financial condition and results of operations. In May 2014, The FASB issued ASU 2014-09 , Revenue from Contracts with Customers (Topic 606) We are still evaluating the ASU for its potential impact on our consolidated financial statements. We currently plan to adopt the ASU using the "modified retrospective" approach, which requires the cumulative effect of initially applying the guidance to be recognized as an adjustment to our accumulated deficit as of the January 1, 2018 adoption date. |
The Company (Tables)
The Company (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
The Company [Abstract] | |
Fair Value Measurements on Recurring Basis | The Company's recurring fair value measurements at September 30, 2017 and December 31, 2016 are as follows: Fair Value as of September 30, 2017 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 8) $ 28 $ - $ - $ 28 Fair Value as of December 31, 2016 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Liabilities: Warrant liability (Note 8) $ 105 $ - $ - $ 105 |
Calculation of Basic and Diluted Net Loss Per Share by Class of Security | The following table presents the calculation of basic and diluted net loss per share by each class of security for the three and nine months ended September 30, 2017: For the Three Months ended September 30, 2017 For the Three Months ended September 30, 2017 Common stock Series C Preferred stock Common stock Series C Preferred stock Net loss $ (8,235 ) $ (5,436 ) $ (13,835 ) $ (3,276 ) Weighted average number of shares outstanding during the period 2,477,743 4,400 2,328,274 1,483 Basic and Diluted net loss per share $ (3.32 ) $ (1,235.43 ) $ (5.94 ) $ (2,208.96 ) |
Diluted Earnings per Common Share Calculated using Net Loss and Weighted Average Shares Outstanding | Nine Months Ended September 30, 2016 Net loss $ (2,448 ) Gain on the change in fair value of the warrant liability (5,316 ) Diluted earnings $ (7,764 ) Weighted average number of common and common equivalent shares outstanding: Basic number of common shares outstanding 2,107,365 Effect of warrants 82,178 Diluted number of common and common stock equivalent shares outstanding 2,189,543 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The weighted average of potential common stock equivalents outstanding during the three and nine months ended September 30, 2017 and 2016 consist of common stock equivalents of common stock purchase warrants, senior secured convertible debentures, convertible preferred stock and common stock options, which are summarized as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Common stock equivalents of convertible debentures 7,546,299 8,541,577 8,191,777 8,561,343 Common stock purchase warrants 2,406,625 2,656,816 2,406,625 2,724,584 Common stock equivalents of convertible Preferred B stock 228,336 493,782 343,261 502,661 Common stock options 855,389 600,914 873,554 563,155 Total 11,036,649 12,293,089 11,815,217 12,351,743 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Inventories [Abstract] | |
Schedule of Inventory | September 30 , December 31, 2016 (unaudited) Raw materials and work in progress $ 2,448 $ 2,440 Finished goods 1,085 377 Total inventories $ 3,533 $ 2,817 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Property and Equipment, net [Abstract] | |
Summary of Property and Equipment, Net | September 30, 2017 December 31, 2016 (unaudited) Lasers placed-in-service $ 18,018 $ 16,712 Equipment, computer hardware and software 468 160 Furniture and fixtures 118 111 Leasehold improvements 31 25 18,635 17,008 Accumulated depreciation and amortization (9,977 ) (6,828 ) Property and equipment, net $ 8,658 $ 10,180 |
Intangibles, net (Tables)
Intangibles, net (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Intangibles, net [Abstract] | |
Schedule of Definite-lived Intangible Assets | Set forth below is a detailed listing of definite-lived intangible assets: September 30, 2017 December 31, 2016 (unaudited) Core technology $ 5,700 $ 5,974 Product technology 2,000 2,000 Customer relationships 6,900 6,900 Tradenames 1,500 1,500 Distribution rights 286 - 16,386 16,374 Accumulated amortization (4,084 ) (2,962 ) Patents and licensed technologies, net $ 12,302 $ 13,412 |
Finite-lived Intangible Assets Amortization Expense | Estimated amortization expense for amortizable patents and licensed technologies assets for the future periods is as follows: Remaining 2017 $ 476 2018 1,905 2019 1,905 2020 1,670 2021 1,410 Thereafter 4,936 Total $ 12,302 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Other Accrued Liabilities [Abstract] | |
Schedule of Other Accrued Liabilities | September 3 0 December 31, 2016 (unaudited) Accrued warranty, current $ 98 $ 102 Accrued compensation, including commissions and vacation 861 1,177 Accrued sales and other taxes 520 439 Distributor rights liability, current 82 - Accrued professional fees and other accrued liabilities 338 274 Total other accrued liabilities $ 1,899 $ 1,992 |
Convertible Debentures (Tables)
Convertible Debentures (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Convertible Debentures [Abstract] | |
Summary of Convertible Debentures | In the following table is a summary of the Company's convertible debentures. December 31, 2016 Senior secured 2.25% convertible debentures, net of unamortized debt discount of $24,314; and deferred financing costs of $524 $ 7,174 Senior secured 4% convertible debentures, net of unamortized debt discount of $3,469; and deferred financing costs of $392 4,854 Total convertible debt $ 12,028 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Long-term Debt [Abstract] | |
Long-term Debt | September 30, 2017 December 31, 2016 (unaudited) Term note, net of debt discount of $177 and $258, respectively; and deferred financing cost of $188 and $276, respectively $ 10,778 $ 11,466 Less: current portion (1,936 ) (1,714 ) Total long-term debt $ 8,842 $ 9,752 |
Summary of Maturities of Long-term Debt | The following table summarizes the future payments that the Company expects to make for the long-term debt for the future periods: Remaining in 2017 $ 572 2018 2,387 2019 4,092 2020 4,092 $ 11,143 |
Warrants (Tables)
Warrants (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Warrants [Abstract] | |
Warrants Fair Value Assumptions | A summary of quantitative information with respect to the valuation methodology and significant unobservable inputs used for the Company's warrant liabilities that are categorized within Level 3 of the fair value hierarchy as of September 30, 2017 and December 31, 2016 is as follows: September 30, 2017 December 31, 2016 Number of shares underlying the warrants 403,090 403,090 Stock price $ 1.77 $ 2.20 Volatility 48.00 % 47.00 % Risk-free interest rate 1.31 – 1.45 % 1.22 % Expected dividend yield 0 % 0 % Expected warrant life 1.37 – 1.60 years 2.12 – 2.35 years |
Schedule of Derivative Warrant Liabilities | Fair Value Measurements Using Significant Unobservable Inputs (Level 3): Issuance Date December 31, 2016 Decrease in Fair Value September 30, 2017 10/31/2013 $ 39 $ (28 ) $ 11 2/5/2014 66 ( 49 ) 17 Total $ 105 $ (77 ) $ 28 Issuance Date December 31, 2015 Decrease in Fair Value Reclassification to Equity September 30, 2016 10/31/2013 $ 379 $ (312 ) $ - $ 67 2/5/2014 715 (597 ) - 118 7/24/2014 Series A 2,415 (1,573 ) (842 ) - 7/24/2014 Series B 1,726 (1,713 ) (13 ) - 6/22/2015 1,807 (1,121 ) (686 ) - Total $ 7,042 $ (5,316 ) $ (1,541 ) $ 185 |
Schedule of Warrants Subject to Remeasurement | Number of Warrants Subject to Remeasurement: Issuance Date September 30, 2017 10/31/2013 137,143 2/5/2014 265,947 Total 403,090 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Stockholders' Equity [Abstract] | |
Summary of Outstanding Common Stock Warrants | Outstanding common stock warrants consist at September 30, 2017 of the following: Issue Date Expiration Date Total Warrants Exercise Price 4/26/2013 4/26/2018 13,865 $ 55.90 10/31/2013 4/30/2019 137,143 $ 3.75 2/5/2014 2/5/2019 265,947 $ 3.75 7/24/2014 7/24/2019 1,239,769 $ 3.75 - $ 12.25 6/22/2015 6/22/2020 600,000 $ 3.75 12/30/2015 12/30/2020 130,089 $ 5.65 1/29/2016 1/29/2021 19,812 $ 5.30 2,406,625 |
Business Segments and Geograp33
Business Segments and Geographic Data (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Business Segments and Geographic Data [Abstract] | |
Schedule of Segment Reporting Information by Segment | The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended September 30, 2017 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 5,720 $ 1,751 $ 9 $ 7,480 Costs of revenues 2,084 967 225 3,276 Gross profit 3,636 784 (216 ) 4,204 Gross profit % 63.6 % 44.8 % (2400.0 %) 56.2 % Allocated operating expenses: Engineering and product development 348 63 - 411 Selling and marketing expenses 2,238 449 - 2,687 Unallocated operating expenses - - - 1,678 2,586 512 - 4,776 Income (loss) from operations 1,050 272 (216 ) (572 ) Interest expense, net - - - (1,343 ) Change in fair value of warrant liability - - - 81 Loss on extinguishment of debt - - - (11,799 ) Income (loss) before income taxes $ 1,050 $ 272 $ (216 ) $ (13,633 ) Three Months Ended September 30, 2016 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 6,205 $ 1,550 $ 12 $ 7,767 Costs of revenues 2,162 877 31 3,070 Gross profit 4,043 673 ( 19 ) 4,697 Gross profit % 65.2 % 43.4 % (158.3 %) 60.5 % Allocated operating expenses: Engineering and product development 343 31 8 382 Selling and marketing expenses 2,767 57 16 2,840 Unallocated operating expenses - - - 1,880 3,110 88 24 5,102 Income (loss) from operations 933 585 (43 ) (405 ) Interest expense, net - - - (1,175 ) Change in fair value of warrant liability - - - 132 Other income (expense), net - - - 3 Income (loss) before income taxes $ 933 $ 585 $ (43 ) $ (1,445 ) Nine Months Ended September 30, 2017 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 17,653 $ 5,784 $ 17 $ 23,454 Costs of revenues 5,969 2,988 225 9,182 Gross profit 11,684 2,796 ( 208 ) 14,272 Gross profit % 66.2 % 48.3 % (1223.5 %) 60.9 % Allocated operating expenses: Engineering and product development 1,104 204 1 1,309 Selling and marketing expenses 7,747 1,167 - 8,914 Unallocated operating expenses - - - 4,999 8,851 1,371 1 15,222 Income (loss) from operations 2,833 1,425 (209 ) (950 ) Interest expense, net - - - (4,264 ) Change in fair value of warrant liability - - - 77 Extinguishment of debt - - - (11,799 ) Other income (expense), net - - - 6 Income (loss) before income taxes $ 2,833 $ 1,425 $ (209 ) $ (16,930 ) Nine Months Ended September 30, 2016 (unaudited) Dermatology Recurring Procedures Dermatology Procedures Equipment Dermatology Imaging TOTAL Revenues $ 17,826 $ 5,174 $ 126 $ 23,126 Costs of revenues 6,723 2,641 267 9,631 Gross profit 11,103 2,533 ( 141 ) 13,495 Gross profit % 62.3 % 49.0 % (111.9 %) 58.4 % Allocated operating expenses: Engineering and product development 977 147 417 1,541 Selling and marketing expenses 9,626 261 186 10,073 Unallocated operating expenses - - - 5,882 10,603 408 603 17,496 Income (loss) from operations 500 2,125 (744 ) (4,001 ) Interest expense, net - - - (3,571 ) Change in fair value of warrant liability - - - 5,316 Other income (expense), net - - - (1 ) Income (loss) before income taxes $ 500 $ 2,125 $ (744 ) $ (2,257 ) |
Schedule of Net Revenues by Geographic Areas | Net revenues by geographic area were, as follows: Three Months Ended September 30, Nine Months Ended September 30, 2017 2016 2017 2016 Domestic $ 6,337 $ 6,287 $ 19,612 $ 18,444 Foreign 1,143 1,480 3,842 4,682 $ 7,480 $ 7,767 $ 23,454 $ 23,126 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2017 | |
Commitments and Contingencies [Abstract] | |
Schedule of Approximate Aggregate Minimum Future Payments | As of September 30, 2017, aggregate annual minimum payments due under the Company's lease obligations are as follows: Year, 2017 (remaining three months) $ 113 2018 429 2019 160 Total $ 702 |
The Company (Details)
The Company (Details) $ / shares in Units, $ in Thousands | Apr. 06, 2017 | Sep. 30, 2017USD ($)$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Jun. 30, 2017USD ($) | Sep. 30, 2017USD ($)SystemsPartyAgreementExtension$ / sharesshares | Sep. 30, 2016USD ($)$ / sharesshares | Dec. 31, 2016USD ($) |
Business Acquisition [Line Items] | |||||||
Reverse stock-split ratio | 0.20 | ||||||
Liquidity [Abstract] | |||||||
Accumulated deficit | $ (227,686) | $ (227,686) | $ (210,575) | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Fair value of debt | 10,778 | 10,778 | 20,082 | ||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||
Net loss | $ (13,671) | $ (1,509) | $ (17,111) | $ (2,448) | |||
Weighted average number of shares outstanding during the period (in shares) | shares | 2,477,743 | 2,135,952 | |||||
Basic and Diluted net loss per share (in dollars per share) | $ / shares | $ (3.32) | $ (0.71) | |||||
Shares used in computing net loss per basic and diluted preferred share (in shares) | shares | 4,400 | 0 | 1,483 | 0 | |||
Net loss per basic and diluted preferred share (in dollars per share) | $ / shares | $ (1,235.43) | $ 0 | $ (2,208.96) | $ 0 | |||
Earnings Per Share [Abstract] | |||||||
Net loss | $ (2,448) | ||||||
Change in fair value of warrant liability | $ (81) | $ (132) | $ (77) | (5,316) | |||
Diluted earnings | $ (7,764) | ||||||
Weighted average number of common and common equivalent shares outstanding [Abstract] | |||||||
Basic number of common shares outstanding (in shares) | shares | 2,328,274 | 2,107,365 | |||||
Effect of warrants (in shares) | shares | 82,178 | ||||||
Diluted number of common and common stock equivalent shares outstanding (in shares) | shares | 2,328,274 | 2,189,543 | |||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Potential common stock equivalents (in shares) | shares | 11,036,649 | 12,293,089 | 11,815,217 | 12,351,743 | |||
Esthetic Education, LLC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Agreement period | 3 years | ||||||
Number of extensions allowed | Extension | 2 | ||||||
Period of extension | 1 year | ||||||
Ellipse Agreement [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Monthly license fee | $ 33 | ||||||
License fee for initial term | $ 1,100 | ||||||
Number of parties involved in transaction | Party | 3 | ||||||
Ellipse New Agreement [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Monthly license fee | $ 10 | ||||||
License fee for initial term | $ 355 | ||||||
Number of new agreements | Agreement | 2 | ||||||
License agreement, number of additional years automatically extended | 2 years | ||||||
Present value of the agreement | $ 900 | $ 286 | |||||
Gain on contract termination | 40 | ||||||
Fair Value, Measurements, Recurring [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Warrant liability | $ 28 | 28 | 105 | ||||
Fair Value, Measurements, Recurring [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Warrant liability | 0 | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant other Observable Inputs (Level 2) [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Warrant liability | 0 | 0 | 0 | ||||
Fair Value, Measurements, Recurring [Member] | Significant Unobservable Inputs (Level 3) [Member] | |||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||
Warrant liability | 28 | 28 | $ 105 | ||||
Common Stock [Member] | |||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||
Net loss | $ (8,235) | $ (13,835) | |||||
Weighted average number of shares outstanding during the period (in shares) | shares | 2,477,743 | 2,328,274 | |||||
Basic and Diluted net loss per share (in dollars per share) | $ / shares | $ (3.32) | $ (5.94) | |||||
Series C Preferred Stock [Member] | |||||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||||
Net loss | $ (5,436) | $ (3,276) | |||||
Shares used in computing net loss per basic and diluted preferred share (in shares) | shares | 4,400 | 1,483 | |||||
Net loss per basic and diluted preferred share (in dollars per share) | $ / shares | $ (1,235.43) | $ (2,208.96) | |||||
XTRAC [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Number of systems placed in dermatologists offices | Systems | 776 | ||||||
Common Stock Equivalents of Convertible Debentures [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Potential common stock equivalents (in shares) | shares | 7,546,299 | 8,541,577 | 8,191,777 | 8,561,343 | |||
Common Stock Purchase Warrants [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Potential common stock equivalents (in shares) | shares | 2,406,625 | 2,656,816 | 2,406,625 | 2,724,584 | |||
Common Stock Equivalents of Convertible Preferred B Stock [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Potential common stock equivalents (in shares) | shares | 228,336 | 493,782 | 343,261 | 502,661 | |||
Common Stock Options [Member] | |||||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||||||
Potential common stock equivalents (in shares) | shares | 855,389 | 600,914 | 873,554 | 563,155 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Schedule of inventory [Abstract] | ||
Raw materials and work in progress | $ 2,448 | $ 2,440 |
Finished goods | 1,085 | 377 |
Total inventories | $ 3,533 | $ 2,817 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 18,635 | $ 17,008 | |
Accumulated depreciation and amortization | (9,977) | (6,828) | |
Property and equipment, net | 8,658 | 10,180 | |
Depreciation and related amortization expense | 3,292 | $ 3,482 | |
Lasers Placed-In-Service [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 18,018 | 16,712 | |
Equipment, Computer Hardware and Software [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 468 | 160 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | 118 | 111 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 31 | $ 25 |
Intangibles, net (Details)
Intangibles, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Jun. 30, 2017 | Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Patents and licensed technologies, gross | $ 16,386 | $ 16,386 | $ 16,374 | ||
Accumulated amortization | (4,084) | (4,084) | (2,962) | ||
Patents and licensed technologies, net | 12,302 | 12,302 | 13,412 | ||
Amortization expense of intangible assets | 1,519 | $ 1,362 | |||
Impairment of intangible assets | 23 | $ 0 | |||
Estimated amortization expense [Abstract] | |||||
Remaining 2,017 | 476 | 476 | |||
2,018 | 1,905 | 1,905 | |||
2,019 | 1,905 | 1,905 | |||
2,020 | 1,670 | 1,670 | |||
2,021 | 1,410 | 1,410 | |||
Thereafter | 4,936 | 4,936 | |||
Patents and licensed technologies, net | 12,302 | 12,302 | 13,412 | ||
Ellipse New Agreement [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Present value of the agreement | $ 900 | 286 | |||
Gain on contract termination | 40 | ||||
MelaFind Systems [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Write-off of accumulated amortization of discontinued operations | 251 | 251 | |||
Core Technology [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Patents and licensed technologies, gross | 5,700 | 5,700 | 5,974 | ||
Impairment of intangible assets | 274 | 274 | |||
Product Technology [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Patents and licensed technologies, gross | 2,000 | 2,000 | 2,000 | ||
Customer Relationships [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Patents and licensed technologies, gross | 6,900 | 6,900 | 6,900 | ||
Tradenames [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Patents and licensed technologies, gross | 1,500 | 1,500 | 1,500 | ||
Distribution Rights [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Patents and licensed technologies, gross | $ 286 | $ 286 | $ 0 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2017 | Dec. 31, 2016 |
Other Accrued Liabilities [Abstract] | ||
Accrued warranty, current | $ 98 | $ 102 |
Accrued compensation, including commissions and vacation | 861 | 1,177 |
Accrued sales and other taxes | 520 | 439 |
Distributor rights liability, current | 82 | 0 |
Accrued professional fees and other accrued liabilities | 338 | 274 |
Total other accrued liabilities | $ 1,899 | $ 1,992 |
Convertible Debentures (Details
Convertible Debentures (Details) $ / shares in Units, $ in Thousands | Jun. 06, 2017USD ($)shares$ / shares | Jul. 21, 2014USD ($)shares$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($)shares$ / shares | Sep. 30, 2017USD ($)$ / shares | Sep. 30, 2016USD ($) | Dec. 31, 2016USD ($)$ / shares |
Debt Instrument [Line Items] | ||||||||
Total convertible debt | $ 0 | $ 0 | $ 12,028 | |||||
Aggregate principal amount of debt | $ 40,465 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | $ 0.001 | |||||
Change in fair value of warrant liability | $ (81) | $ (132) | $ (77) | $ (5,316) | ||||
Debentures converted in shares of common stock, value | 262 | 248 | ||||||
Debentures outstanding amount | $ 40,465 | |||||||
Loss on extinguishment of debentures | $ (11,799) | $ 0 | $ (11,799) | $ 0 | ||||
Series C Convertible Preferred Stock [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Aggregate principal amount of debt | $ 40,465 | |||||||
Debt conversion, converted instrument, issued (in shares) | shares | 40,482 | |||||||
Debentures outstanding amount | $ 40,465 | |||||||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | |||||
Senior Secured 2.25% Convertible Debentures [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Total convertible debt | $ 7,174 | |||||||
Debt instrument, unamortized discount | 24,314 | |||||||
Deferred financing costs | 524 | |||||||
Interest rate | 2.25% | |||||||
Aggregate principal amount of debt | $ 32,500 | |||||||
Number of shares debt convertible (in shares) | shares | 8,666,668 | |||||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 3.75 | |||||||
Maturity period | 5 years | |||||||
Maturity date | Jun. 30, 2021 | |||||||
Debt instrument, convertible, beneficial conversion feature | $ 27,300 | |||||||
Debentures outstanding amount | $ 32,500 | |||||||
Senior Secured 2.25% Convertible Debentures [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 6.90 | |||||||
Senior Secured 2.25% Convertible Debentures [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 3.75 | |||||||
Senior Secured 4% Convertible Debentures [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Total convertible debt | 4,854 | |||||||
Debt instrument, unamortized discount | $ 10,353 | 3,469 | ||||||
Deferred financing costs | $ 392 | |||||||
Interest rate | 4.00% | 4.00% | ||||||
Aggregate principal amount of debt | $ 15,000 | $ 15,000 | ||||||
Number of shares debt convertible (in shares) | shares | 1,169,595 | |||||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 12.825 | |||||||
Maturity period | 5 years | |||||||
Maturity date | Jul. 30, 2021 | |||||||
Debt instrument, convertible, beneficial conversion feature | $ 4,565 | |||||||
Fair value of warrants | 5,296 | |||||||
Change in fair value of warrant liability | 491 | |||||||
Debt instrument initial carrying amount | 4,647 | |||||||
Debentures converted in shares of common stock, value | $ 262 | |||||||
Debt conversion, converted instrument, issued (in shares) | shares | 70,000 | |||||||
Interest expense on debt | $ 197 | |||||||
Debentures outstanding amount | $ 15,000 | $ 15,000 | ||||||
Senior Secured 4% Convertible Debentures [Member] | Series A Warrants [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of warrants to purchase common stock (in shares) | shares | 1,239,769 | |||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 12.25 | |||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | |||||||
Warrants expiration date | Jul. 31, 2019 | |||||||
Senior Secured 2.25% Convertible Debentures and Senior Secured 4% Convertible Debentures [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt instrument, interest payment | $ 4,000 | |||||||
Number of years for interest payments | 4 years | |||||||
Senior Secured 2.25% Convertible Debentures and Senior Secured 4% Convertible Debentures [Member] | Series C Convertible Preferred Stock [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Number of shares debt convertible (in shares) | shares | 15,049,000 | |||||||
Senior secured convertible debentures conversion price (in dollars per share) | $ / shares | $ 2.69 | |||||||
Debt conversion, converted instrument, issued (in shares) | shares | 40,482 | |||||||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | |||||||
Each share of preferred stock to common stock (in shares) | shares | 372 | |||||||
Senior Secured 2.25% Convertible Debentures and Senior Secured 4% Convertible Debentures [Member] | Series C Convertible Preferred Stock [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Beneficial ownership percentage | 9.99% |
Long-term Debt (Details)
Long-term Debt (Details) $ in Thousands | Jan. 29, 2016USD ($) | Dec. 30, 2015USD ($) | Sep. 30, 2017USD ($)Tranche | Dec. 31, 2016USD ($) |
Long-term Debt [Abstract] | ||||
Less: current portion | $ (1,936) | $ (1,714) | ||
Long-term debt | 8,842 | 9,752 | ||
Term-Note Credit Facility [Member] | ||||
Long-term Debt [Abstract] | ||||
Term note, net of debt discount of $177 and $258, respectively; and deferred financing cost of $188 and $276, respectively | 10,778 | 11,466 | ||
Less: current portion | (1,936) | (1,714) | ||
Long-term debt | 8,842 | 9,752 | ||
Maturities of Long-term Debt [Abstract] | ||||
Remaining in 2017 | 572 | |||
2,018 | 2,387 | |||
2,019 | 4,092 | |||
2,020 | 4,092 | |||
Total long-term debt | 11,143 | |||
Unamortized discount on the long term debt | 177 | 258 | ||
Deferred financing costs | 188 | $ 276 | ||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Maximum borrowing capacity under the agreement | $ 12,000 | |||
Number of tranches | Tranche | 2 | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Interest rate on credit facility | 8.25% | |||
Debt instrument term of variable rate | 1 month | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | Minimum [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
LIBOR floor Rate | 0.50% | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | LIBOR [Member] | Maximum [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
LIBOR floor Rate | 9.49% | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | First Tranche [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Proceeds from credit facility | $ 10,500 | |||
Repayment of debt | $ (10,000) | |||
MidCap Financial Trust [Member] | Term-Note Credit Facility [Member] | Second Tranche [Member] | ||||
Maturities of Long-term Debt [Abstract] | ||||
Proceeds from credit facility | $ 1,500 |
Warrants (Details)
Warrants (Details) - Warrant [Member] - Level 3 [Member] - USD ($) $ / shares in Units, $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2016 | Dec. 31, 2016 | |
Fair Value Assumptions [Abstract] | |||
Number of shares underlying the warrants (in shares) | 403,090 | 403,090 | |
Stock price (in dollars per share) | $ 1.77 | $ 2.20 | |
Volatility | 48.00% | 47.00% | |
Risk-free interest rate | 1.22% | ||
Expected dividend yield | 0.00% | 0.00% | |
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | $ 105 | $ 7,042 | $ 7,042 |
Decrease in Fair Value | (77) | (5,316) | |
Reclassification to Equity | (1,541) | ||
Balance as end of period | $ 28 | 185 | $ 105 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||
Number of warrants to purchase common stock (in shares) | 403,090 | ||
Minimum [Member] | |||
Fair Value Assumptions [Abstract] | |||
Risk-free interest rate | 1.31% | ||
Expected warrant life | 1 year 4 months 13 days | 2 years 1 month 13 days | |
Maximum [Member] | |||
Fair Value Assumptions [Abstract] | |||
Risk-free interest rate | 1.45% | ||
Expected warrant life | 1 year 7 months 6 days | 2 years 4 months 6 days | |
10/31/2013 [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | $ 39 | 379 | $ 379 |
Decrease in Fair Value | (28) | (312) | |
Reclassification to Equity | 0 | ||
Balance as end of period | $ 11 | 67 | 39 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||
Number of warrants to purchase common stock (in shares) | 137,143 | ||
2/5/2014 [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | $ 66 | 715 | 715 |
Decrease in Fair Value | (49) | (597) | |
Reclassification to Equity | 0 | ||
Balance as end of period | $ 17 | 118 | 66 |
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases, (Sales), Issuances, (Settlements) [Abstract] | |||
Number of warrants to purchase common stock (in shares) | 265,947 | ||
7/24/2014 Series A [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | 2,415 | 2,415 | |
Decrease in Fair Value | (1,573) | ||
Reclassification to Equity | (842) | ||
Balance as end of period | 0 | ||
7/24/2014 Series B [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | 1,726 | 1,726 | |
Decrease in Fair Value | (1,713) | ||
Reclassification to Equity | (13) | ||
Balance as end of period | 0 | ||
6/22/2015 [Member] | |||
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) [Abstract] | |||
Balance as beginning of period | 1,807 | $ 1,807 | |
Decrease in Fair Value | (1,121) | ||
Reclassification to Equity | (686) | ||
Balance as end of period | $ 0 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) | 9 Months Ended |
Sep. 30, 2017$ / sharesshares | |
Class of Warrant or Right [Line Items] | |
Total Warrants (in shares) | shares | 2,406,625 |
Common Stock Warrant One [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Apr. 26, 2013 |
Expiration Date | Apr. 26, 2018 |
Total Warrants (in shares) | shares | 13,865 |
Exercise price (in dollars per share) | $ / shares | $ 55.90 |
Common Stock Warrant Two [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Oct. 31, 2013 |
Expiration Date | Apr. 30, 2019 |
Total Warrants (in shares) | shares | 137,143 |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
Common Stock Warrant Three [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Feb. 5, 2014 |
Expiration Date | Feb. 5, 2019 |
Total Warrants (in shares) | shares | 265,947 |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
Common Stock Warrant Four [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Jul. 24, 2014 |
Expiration Date | Jul. 24, 2019 |
Total Warrants (in shares) | shares | 1,239,769 |
Common Stock Warrant Four [Member] | Minimum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
Common Stock Warrant Four [Member] | Maximum [Member] | |
Class of Warrant or Right [Line Items] | |
Exercise price (in dollars per share) | $ / shares | $ 12.25 |
Common Stock Warrant Five [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Jun. 22, 2015 |
Expiration Date | Jun. 22, 2020 |
Total Warrants (in shares) | shares | 600,000 |
Exercise price (in dollars per share) | $ / shares | $ 3.75 |
Common Stock Warrant Six [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Dec. 30, 2015 |
Expiration Date | Dec. 30, 2020 |
Total Warrants (in shares) | shares | 130,089 |
Exercise price (in dollars per share) | $ / shares | $ 5.65 |
Common Stock Warrant Seven [Member] | |
Class of Warrant or Right [Line Items] | |
Issue Date | Jan. 29, 2016 |
Expiration Date | Jan. 29, 2021 |
Total Warrants (in shares) | shares | 19,812 |
Exercise price (in dollars per share) | $ / shares | $ 5.30 |
Stock-based compensation (Detai
Stock-based compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Number of Stock Options [Roll Forward] | ||||
Stock-based compensation expense | $ 63 | $ 116 | $ 136 | $ 401 |
Unrecognized compensation expense | $ 211 | $ 211 | ||
Unrecognized compensation expense, weighted average period | 2 years 9 months | |||
Stock Options [Member] | ||||
Number of Stock Options [Roll Forward] | ||||
Stock based compensation options outstanding (in shares) | 855,389 | 855,389 | ||
Stock based compensation weighted average exercise price (in dollars per share) | $ 4.93 | $ 4.93 | ||
Stock based compensation weighted average remaining contractual life | 8 years 6 months | |||
Stock based compensation vested (in shares) | 401,077 | 401,077 | ||
Stock based compensation exercisable (in shares) | 401,077 | 401,077 |
Income taxes (Details)
Income taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Income taxes [Abstract] | ||||
Income tax expense change in deferred tax liability related to goodwill | $ 38 | $ 64 | $ 181 | $ 191 |
Business Segments and Geograp46
Business Segments and Geographic Data (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2017USD ($)Segment | Sep. 30, 2016USD ($) | Dec. 31, 2016 | |
Segment Reporting Information [Line Items] | |||||
Number of operating segments | Segment | 3 | ||||
Results of Operations from Business Segments [Abstract] | |||||
Revenues | $ 7,480 | $ 7,767 | $ 23,454 | $ 23,126 | |
Cost of revenues | 3,276 | 3,070 | 9,182 | 9,631 | |
Gross profit | $ 4,204 | $ 4,697 | $ 14,272 | $ 13,495 | |
Gross profit % | 56.20% | 60.50% | 60.90% | 58.40% | |
Allocated operating expenses [Abstract] | |||||
Engineering and product development | $ 411 | $ 382 | $ 1,309 | $ 1,541 | |
Selling and marketing expenses | 2,687 | 2,840 | 8,914 | 10,073 | |
Unallocated operating expenses | 1,678 | 1,880 | 4,999 | 5,882 | |
Total operating expenses | 4,776 | 5,102 | 15,222 | 17,496 | |
Operating loss before other income (expense), net | (572) | (405) | (950) | (4,001) | |
Interest expense, net | (1,343) | (1,175) | (4,264) | (3,571) | |
Change in fair value of warrant liability | 81 | 132 | 77 | 5,316 | |
Loss on extinguishment of debt | (11,799) | 0 | (11,799) | 0 | |
Other income (expense), net | 0 | 3 | 6 | (1) | |
Loss before income taxes | (13,633) | (1,445) | $ (16,930) | (2,257) | |
Long Lived Assets [Member] | Geographic Concentration Risk [Member] | Domestic [Member] | |||||
Allocated operating expenses [Abstract] | |||||
Concentration risk percentage | 100.00% | 100.00% | |||
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | |||||
Results of Operations from Business Segments [Abstract] | |||||
Revenues | 5,720 | 6,205 | $ 17,653 | 17,826 | |
Cost of revenues | 2,084 | 2,162 | 5,969 | 6,723 | |
Gross profit | $ 3,636 | $ 4,043 | $ 11,684 | $ 11,103 | |
Gross profit % | 63.60% | 65.20% | 66.20% | 62.30% | |
Allocated operating expenses [Abstract] | |||||
Engineering and product development | $ 348 | $ 343 | $ 1,104 | $ 977 | |
Selling and marketing expenses | 2,238 | 2,767 | 7,747 | 9,626 | |
Unallocated operating expenses | 0 | 0 | 0 | 0 | |
Total operating expenses | 2,586 | 3,110 | 8,851 | 10,603 | |
Operating loss before other income (expense), net | 1,050 | 933 | 2,833 | 500 | |
Interest expense, net | 0 | 0 | 0 | 0 | |
Change in fair value of warrant liability | 0 | 0 | 0 | 0 | |
Loss on extinguishment of debt | 0 | 0 | |||
Other income (expense), net | 0 | 0 | 0 | ||
Loss before income taxes | 1,050 | 933 | 2,833 | 500 | |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | |||||
Results of Operations from Business Segments [Abstract] | |||||
Revenues | 1,751 | 1,550 | 5,784 | 5,174 | |
Cost of revenues | 967 | 877 | 2,988 | 2,641 | |
Gross profit | $ 784 | $ 673 | $ 2,796 | $ 2,533 | |
Gross profit % | 44.80% | 43.40% | 48.30% | 49.00% | |
Allocated operating expenses [Abstract] | |||||
Engineering and product development | $ 63 | $ 31 | $ 204 | $ 147 | |
Selling and marketing expenses | 449 | 57 | 1,167 | 261 | |
Unallocated operating expenses | 0 | 0 | 0 | 0 | |
Total operating expenses | 512 | 88 | 1,371 | 408 | |
Operating loss before other income (expense), net | 272 | 585 | 1,425 | 2,125 | |
Interest expense, net | 0 | 0 | 0 | 0 | |
Change in fair value of warrant liability | 0 | 0 | 0 | 0 | |
Loss on extinguishment of debt | 0 | 0 | |||
Other income (expense), net | 0 | 0 | 0 | ||
Loss before income taxes | 272 | 585 | 1,425 | 2,125 | |
Operating Segments [Member] | Dermatology Imaging [Member] | |||||
Results of Operations from Business Segments [Abstract] | |||||
Revenues | 9 | 12 | 17 | 126 | |
Cost of revenues | 225 | 31 | 225 | 267 | |
Gross profit | $ (216) | $ (19) | $ (208) | $ (141) | |
Gross profit % | (2400.00%) | (158.30%) | (1223.50%) | (111.90%) | |
Allocated operating expenses [Abstract] | |||||
Engineering and product development | $ 0 | $ 8 | $ 1 | $ 417 | |
Selling and marketing expenses | 0 | 16 | 0 | 186 | |
Unallocated operating expenses | 0 | 0 | 0 | 0 | |
Total operating expenses | 0 | 24 | 1 | 603 | |
Operating loss before other income (expense), net | (216) | (43) | (209) | (744) | |
Interest expense, net | 0 | 0 | 0 | 0 | |
Change in fair value of warrant liability | 0 | 0 | 0 | 0 | |
Loss on extinguishment of debt | 0 | 0 | |||
Other income (expense), net | 0 | 0 | 0 | ||
Loss before income taxes | (216) | (43) | (209) | (744) | |
Reportable Geographical Components [Member] | Domestic [Member] | |||||
Results of Operations from Business Segments [Abstract] | |||||
Revenues | 6,337 | 6,287 | 19,612 | 18,444 | |
Reportable Geographical Components [Member] | Foreign [Member] | |||||
Results of Operations from Business Segments [Abstract] | |||||
Revenues | $ 1,143 | $ 1,480 | $ 3,842 | $ 4,682 |
Significant Customer Concentr47
Significant Customer Concentration (Details) - Customer Concentration Risk [Member] - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2016 | Sep. 30, 2017 | Sep. 30, 2016 | |
Revenue [Member] | ||||
Product Information [Line Items] | ||||
Revenues | $ 1,148 | $ 1,457 | $ 3,861 | $ 4,604 |
Concentration risk percentage | 15.30% | 18.80% | 16.50% | 19.90% |
Accounts Receivable [Member] | ||||
Product Information [Line Items] | ||||
Accounts receivable | $ 418 | $ 418 | ||
Concentration risk percentage | 13.10% |
Related Parties (Details)
Related Parties (Details) $ / shares in Units, $ in Thousands | Jun. 06, 2017USD ($)shares$ / shares | Nov. 04, 2015USD ($) | Jul. 21, 2014USD ($)shares$ / shares | Sep. 30, 2017USD ($)Director$ / shares | Sep. 30, 2016USD ($) | Jun. 30, 2017USD ($)shares$ / shares | Sep. 30, 2017USD ($)Director$ / shares | Sep. 30, 2016USD ($) | Dec. 31, 2016$ / shares | Sep. 30, 2015$ / shares |
Related Party Transaction [Line Items] | ||||||||||
Aggregate principal amount of debt | $ 40,465 | |||||||||
Loss on extinguishment of debentures | $ (11,799) | $ 0 | $ (11,799) | $ 0 | ||||||
Number of Directors | Director | 2 | 2 | ||||||||
Series C Convertible Preferred Stock [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Aggregate principal amount of debt | $ 40,465 | |||||||||
Debt conversion, converted instrument, issued (in shares) | shares | 40,482 | |||||||||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 0.10 | $ 0.10 | $ 0.10 | |||||||
Senior Secured 2.25% Convertible Debentures [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Aggregate principal amount of debt | $ 32,500 | |||||||||
Interest rate | 2.25% | |||||||||
Number of shares debt convertible (in shares) | shares | 8,666,668 | |||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 3.75 | |||||||||
Maturity period | 5 years | |||||||||
Maturity date | Jun. 30, 2021 | |||||||||
Senior Secured 2.25% Convertible Debentures [Member] | Maximum [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 6.90 | |||||||||
Senior Secured 4% Convertible Debentures [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Aggregate principal amount of debt | $ 15,000 | $ 15,000 | ||||||||
Interest rate | 4.00% | 4.00% | ||||||||
Number of shares debt convertible (in shares) | shares | 1,169,595 | |||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 12.825 | |||||||||
Maturity period | 5 years | |||||||||
Maturity date | Jul. 30, 2021 | |||||||||
Debt conversion, converted instrument, issued (in shares) | shares | 70,000 | |||||||||
Senior Secured 2.25% Convertible Debentures and Senior Secured 4% Convertible Debentures [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Debt instrument, interest payment | $ 4,000 | |||||||||
Number of years for interest payments | 4 years | |||||||||
Senior Secured 2.25% Convertible Debentures and Senior Secured 4% Convertible Debentures [Member] | Series C Convertible Preferred Stock [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares debt convertible (in shares) | shares | 15,049,000 | |||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 2.69 | |||||||||
Debt conversion, converted instrument, issued (in shares) | shares | 40,482 | |||||||||
Preferred stock, stated value (in dollars per share) | $ / shares | $ 1,000 | |||||||||
Senior Secured 2.25% Convertible Debentures and Senior Secured 4% Convertible Debentures [Member] | Series C Convertible Preferred Stock [Member] | Maximum [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Beneficial ownership percentage | 9.99% | |||||||||
Sabby Management LLC and Broadfin LLC [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Number of shares underlying warrants (in shares) | shares | 600,000 | |||||||||
Exercise price of warrants (in dollars per share) | $ / shares | $ 3.75 | |||||||||
Sabby Management LLC and Broadfin LLC [Member] | Senior Secured 2.25% Convertible Debentures [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Aggregate principal amount of debt | $ 32,500 | |||||||||
Interest rate | 2.25% | |||||||||
Number of shares debt convertible (in shares) | shares | 8,666,668 | |||||||||
Initial conversion price (in dollars per share) | $ / shares | $ 3.75 | $ 3.75 | ||||||||
Maturity period | 5 years | |||||||||
Maturity date | Jun. 30, 2021 | |||||||||
Two Board Directors [Member] | ||||||||||
Related Party Transaction [Line Items] | ||||||||||
Up-front fee paid | $ 40 | |||||||||
Monthly retainer fee | $ 10 |
Commitments and Contingencies49
Commitments and Contingencies (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2017USD ($)Lease | |
Commitments and Contingencies [Abstract] | |
Number of operating leases | Lease | 3 |
Future Annual Minimum Payments under Operating Leases [Abstract] | |
2017 (remaining three months) | $ 113 |
2,018 | 429 |
2,019 | 160 |
Total | $ 702 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - Series C Preferred Stock [Member] $ in Thousands | 1 Months Ended |
Oct. 31, 2017USD ($)shares | |
Subsequent Events [Line Items] | |
Preferred stock converted in shares of common stock, value | $ | $ 4,299 |
Preferred stock converted in shares of common stock (in shares) | shares | 1,598,346 |