Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information | ||
Entity Registrant Name | POLARITYTE, INC. | |
Entity Central Index Key | 0001076682 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business Flag | true | |
Entity Emerging Growth Company | false | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 24,722,212 | |
Trading Symbol | PTE | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2019 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 34,948 | $ 55,673 |
Short-term investments | 9,706 | 6,162 |
Accounts receivable | 788 | 712 |
Inventory | 309 | 336 |
Prepaid expenses and other current assets | 1,844 | 1,432 |
Total current assets | 47,595 | 64,315 |
Non-current assets: | ||
Property and equipment, net | 16,528 | 13,736 |
Operating lease right-of-use assets | 4,960 | |
Intangible assets, net | 873 | 924 |
Goodwill | 278 | 278 |
Other assets | 378 | 913 |
Total non-current assets | 23,017 | 15,851 |
TOTAL ASSETS | 70,612 | 80,166 |
Current liabilities: | ||
Accounts payable and accrued expenses | 5,344 | 6,508 |
Other current liabilities | 2,550 | 316 |
Current portion of long-term note payable | 529 | 529 |
Deferred revenue | 90 | 170 |
Total current liabilities | 8,513 | 7,523 |
Long-term note payable, net | 494 | 479 |
Operating lease liabilities | 3,566 | |
Other long-term liabilities | 1,446 | 131 |
Total liabilities | 14,019 | 8,133 |
Commitments and Contingencies | ||
STOCKHOLDERS' EQUITY: | ||
Preferred stock - 25,000,000 shares authorized, 0 shares issued and outstanding at March 31, 2019 and December 31, 2018 | ||
Common stock - $.001 par value; 250,000,000 shares authorized; 21,749,239 and 21,447,088 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 22 | 21 |
Additional paid-in capital | 424,955 | 414,840 |
Accumulated other comprehensive income | 53 | 36 |
Accumulated deficit | (368,437) | (342,864) |
Total stockholders' equity | 56,593 | 72,033 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 70,612 | $ 80,166 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 21,749,239 | 21,447,088 |
Common stock, shares outstanding | 21,749,239 | 21,447,088 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net revenues | ||
Total net revenues | $ 1,465 | $ 3 |
Cost of sales: | ||
Total costs of sales | 776 | 1 |
Gross profit | 689 | 2 |
Operating costs and expenses | ||
Research and development | 5,352 | 5,572 |
General and administrative | 17,195 | 7,573 |
Sales and marketing | 3,953 | |
Total operating costs and expenses | 26,500 | 13,145 |
Operating loss | (25,811) | (13,143) |
Other income (expense) | ||
Interest income, net | 70 | 36 |
Other income, net | 168 | |
Change in fair value of derivatives | 1,850 | |
Loss on extinguishment of warrant liability | (520) | |
Net loss | (25,573) | (11,777) |
Deemed dividend - accretion of discount on Series F preferred stock | (698) | |
Deemed dividend - exchange of Series F preferred stock | (7,057) | |
Cumulative dividends on Series F preferred stock | (191) | |
Net loss attributable to common stockholders | $ (25,573) | $ (19,723) |
Net loss per share, basic and diluted: | ||
Net loss | $ (1.18) | $ (1.26) |
Deemed dividend - accretion of discount on Series F preferred stock | (0.07) | |
Deemed dividend - exchange of Series F preferred stock | (0.75) | |
Cumulative dividends on Series F preferred stock | (0.02) | |
Net loss attributable to common stockholders | $ (1.18) | $ (2.10) |
Weighted average shares outstanding, basic and diluted: | 21,594,699 | 9,377,211 |
Products [Member] | ||
Net revenues | ||
Total net revenues | $ 297 | $ 3 |
Cost of sales: | ||
Total costs of sales | 273 | 1 |
Services [Member] | ||
Net revenues | ||
Total net revenues | 1,168 | |
Cost of sales: | ||
Total costs of sales | $ 503 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (25,573) | $ (11,777) |
Other comprehensive income: | ||
Unrealized gain on available-for-sale securities | 17 | |
Comprehensive loss | $ (25,556) | $ (11,777) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income [Member] | Accumulated Deficit [Member] | Total |
Balance at Dec. 31, 2017 | $ 109,104 | $ 7 | $ 157,395 | $ (269,920) | $ (3,414) | |
Balance, shares at Dec. 31, 2017 | 1,656,838 | 7,082,836 | ||||
Conversion of Series A preferred stock to common stock | $ (391) | 391 | ||||
Conversion of Series A preferred stock to common stock, shares | (1,602,099) | 363,036 | ||||
Conversion of Series B preferred stock to common stock | $ (4,020) | $ 1 | 4,019 | |||
Conversion of Series B preferred stock to common stock, shares | (47,689) | 794,820 | ||||
Conversion of Series E preferred stock to common stock | $ (104,693) | $ 7 | 104,686 | |||
Conversion of Series E preferred stock to common stock, shares | (7,050) | 7,050,000 | ||||
Exchange of Series F preferred stock and dividends to common stock | $ 1 | 13,060 | 13,061 | |||
Exchange of Series F preferred stock and dividends to common stock, shares | 1,003,393 | |||||
Extinguishment of warrant liability | 3,045 | 3,045 | ||||
Extinguishment of warrant liability, shares | 151,871 | |||||
Stock-based compensation expense | 7,445 | 7,445 | ||||
Stock-based compensation expense, shares | ||||||
Deemed dividend - accretion of discount on Series F preferred stock | (698) | (698) | ||||
Cumulative dividends on Series F preferred stock | (191) | (191) | ||||
Series F preferred stock dividends paid in common stock | 306 | 306 | ||||
Series F preferred stock dividends paid in common stock, shares | 11,708 | |||||
Net loss | (11,777) | (11,777) | ||||
Balance at Mar. 31, 2018 | $ 16 | 289,458 | (281,697) | 7,777 | ||
Balance, shares at Mar. 31, 2018 | 16,457,664 | |||||
Balance at Dec. 31, 2018 | $ 21 | 414,840 | 36 | (342,864) | 72,033 | |
Balance, shares at Dec. 31, 2018 | 21,447,088 | |||||
Stock-based compensation expense | 10,327 | 10,327 | ||||
Stock-based compensation expense, shares | ||||||
Deemed dividend - accretion of discount on Series F preferred stock | ||||||
Cumulative dividends on Series F preferred stock | ||||||
Series F preferred stock dividends paid in common stock | ||||||
Stock option exercises, net | $ 1 | 1,126 | 1,127 | |||
Stock option exercises, net shares | 228,937 | |||||
Vesting of restricted stock units, net | ||||||
Vesting of restricted stock units, net, shares | 73,214 | |||||
Shares withheld for tax withholding on vesting of restricted stock | (1,338) | (1,338) | ||||
Other comprehensive income | 17 | 17 | ||||
Net loss | (25,573) | (25,573) | ||||
Balance at Mar. 31, 2019 | $ 22 | $ 424,955 | $ 53 | $ (368,437) | $ 56,593 | |
Balance, shares at Mar. 31, 2019 | 21,749,239 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (25,573) | $ (11,777) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Stock based compensation expense | 10,289 | 7,445 |
Change in fair value of derivatives | (1,850) | |
Depreciation and amortization | 676 | 318 |
Loss on extinguishment of warrant liability | 520 | |
Amortization of intangible assets | 51 | |
Amortization of debt discount | 15 | |
Change in fair value of contingent consideration | 20 | |
Other non-cash adjustments | (7) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (76) | |
Inventory | 27 | |
Prepaid expenses and other current assets | (412) | (108) |
Operating lease right-of-use assets | 355 | |
Other assets | (137) | |
Accounts payable and accrued expenses | (1,929) | 1,648 |
Other current liabilities | 425 | |
Deferred revenue | (80) | |
Operating lease liabilities | (343) | |
Other long-term liabilities | (4) | |
Net cash used in operating activities | (16,566) | (3,941) |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchase of property and equipment | (1,539) | (3,042) |
Purchase of available-for-sale securities | (5,220) | |
Proceeds from maturities of available-for-sale securities | 1,700 | |
Net cash used in investing activities | (5,059) | (3,042) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from stock options exercised | 1,127 | |
Payment of contingent consideration liability | (109) | |
Principal payments on financing leases | (118) | |
Net cash provided by financing activities | 900 | |
Net (decrease) in cash and cash equivalents | (20,725) | (6,983) |
Cash and cash equivalents - beginning of period | 55,673 | 12,517 |
Cash and cash equivalents - end of period | 34,948 | 5,534 |
Supplemental schedule of non-cash investing and financing activities: | ||
Conversion of Series A, B, E preferred stock to common stock | 109,104 | |
Exchange of Series F preferred stock for common stock | 13,061 | |
Extinguishment of warrant liability | 2,525 | |
Unpaid liability for acquisition of property and equipment | 170 | 363 |
Deemed dividend - accretion of discount on Series F preferred stock | 698 | |
Cumulative dividends on Series F preferred stock | 191 | |
Series F preferred stock dividends paid in common stock | 306 | |
Unpaid tax liability related to net share settlement of restricted stock units | 1,338 | |
Unrealized gain on short-term investments and cash equivalents | 17 | |
Reclassification of stock based compensation expense that was previously classified as a liability to paid-in capital | $ 38 |
Principal Business Activity and
Principal Business Activity and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principal Business Activity and Basis of Presentation | 1. PRINCIPAL BUSINESS ACTIVITY AND BASIS OF PRESENTATION PolarityTE, Inc. and subsidiaries (the “Company”) is a commercial-stage biotechnology and regenerative biomaterials company focused on transforming the lives of patients by discovering, designing and developing a range of regenerative tissue products and biomaterials for the fields of medicine, biomedical engineering and material sciences. Change in Fiscal Year end. The accompanying interim condensed consolidated financial statements of the Company are unaudited, but in the opinion of management, reflect all adjustments, consisting of normal recurring accruals, necessary for a fair presentation of the results for the interim period. Accordingly, they do not include all information and notes required by generally accepted accounting principles for complete financial statements. The results of operations for interim periods are not necessarily indicative of results to be expected for the entire fiscal year. The balance sheet at December 31, 2018 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the two-month period ended December 31, 2018 included in the Company’s Transition Report on Form 10-KT filed with the Securities and Exchange Commission on March 18, 2019. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Principles of Consolidation. Use of estimates. Segments. Cash and cash equivalents. Investments Loss Per Share. Leases The Company has lease agreements with lease and non-lease components. As allowed under Topic 842, the Company has elected not to separate lease and non-lease components for any leases involving real estate and office equipment classes of assets and, as a result, accounts for the lease and non-lease components as a single lease component. The Company has also elected not to apply the recognition requirement of Topic 842 to leases with a term of 12 months or less for all classes of assets. Stock- Based Compensation. The fair value for options issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical stock prices. Forfeitures are recognized as they occur. The value of restricted stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. The accounting for non-employee options and restricted stock is similar to that of employees. Stock-based compensation expense for nonemployee services has historically been subject to remeasurement at each reporting date as the underlying equity instruments vest and was recognized as an expense over the period during which services are received. Upon the adoption of ASU 2018-07, Compensation – Stock Compensation on January 1, 2019, the valuation was fixed at the implementation date and will be recognized as an expense on a straight-line basis over the remaining service period. Revenue Recognition. In the regenerative medicine products segment, the Company records products revenues primarily from the sale of its regenerative tissue products. The Company sells its products to healthcare providers, primarily through direct sales representatives. Products revenues consists of a single performance obligation that the Company satisfies at a point in time. In general, the Company recognizes products revenues upon delivery to the customer. In the contract services segment, the Company records service revenues from the sale of its contract research services, which includes delivery of preclinical studies and other research services to unrelated third parties. Service revenues generally consist of a single performance obligation that the Company satisfies over time using an input method based on costs incurred to date relative to the total costs expected to be required to satisfy the performance obligation. The Company believes that this method provides a faithful depiction of the transfer of services over the term of the performance obligation based on the remaining services needed to satisfy the obligation. This requires the Company to make reasonable estimates of the extent of progress toward completion of the contract. As a result, unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Generally, a portion of the payment is due upfront and the remainder upon completion of the study, with most studies completing in less than a year. As of March 31, 2019 and December 31, 2018, the Company had unbilled receivables of $225,000 and $157,000 and deferred revenue of $90,000 and $170,000 respectively. The unbilled receivables balance is included in consolidated accounts receivable. Revenues of $151,000 was recognized during the three months ended March 31, 2019 that was included in the deferred revenue balance as of December 31, 2018. Costs to obtain the contract are incurred for products revenues as they are shipped and are expensed as incurred. Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) Recently Adopted Accounting Pronouncements On January 1, 2019 the Company adopted ASU 2016-02, Leases (ASC 842) We elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract was or contains a lease, and our initial direct costs for any leases that existed prior to January 1, 2019. The impact of the adoption of ASC 842 on the accompanying Condensed Consolidated Balance Sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the Adoption of ASC 842 January 1, 2019 Operating lease right-of-use assets $ – $ 5,305 $ 5,305 Liabilities: Operating lease liabilities $ – $ 3,948 $ 3,948 Other current liabilities 316 1,432 1,748 Accounts payable and accrued expenses 6,508 (75 ) 6,433 The adjustments due to the adoption of ASC 842 related to the recognition of operating lease right-of-use assets and operating lease liabilities for the existing operating leases. A cumulative-effect adjustment to beginning accumulated deficit was not required. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Liquidity | 3. LIQUIDITY The Company has experienced recurring losses and cash outflows from operating activities. For the three months ended March 31, 2019 and 2018, the Company incurred net losses of $25.7 million and $11.8 million, respectively, with cash used in operating activities of $16.6 million and $3.9 million, respectively. On April 10, 2019, the Company completed an underwritten offering with Cantor Fitzgerald & Co., as underwriter, providing for the issuance and sale of 3,418,918 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $8.51 per share, for net proceeds of approximately $28.7 million, after deducting offering expenses payable by the Company. Based upon the current status of the Company’s product development and commercialization plans, the Company believes that its existing cash, cash equivalents and short-term investments will be adequate to satisfy its capital needs for at least the next 12 months from the date of filing. However, the Company anticipates needing substantial additional financing to continue clinical deployment and commercialization of its lead product SkinTE, development of its other product candidates, and scaling the manufacturing capacity for its products and product candidates and prepare for commercial readiness. However, the Company will continue to pursue fundraising opportunities when available, but such financing may not be available in the future on terms favorable to the Company, if at all. If adequate financing is not available, the Company may be required to delay, reduce the scope of, or eliminate one or more of its product development programs. The Company plans to meet its capital requirements primarily through issuances of equity securities, debt financing, revenue from product sales and future collaborations. Failure to generate revenue or raise additional capital would adversely affect the Company’s ability to achieve its intended business objectives. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value | 4. FAIR VALUE In accordance with ASC 820, Fair Value Measurements and Disclosures ● Level 1: Observable inputs such as quoted prices in active markets for identical instruments. This methodology applies to our Level 1 investments, which are composed of money market funds. ● Level 2: Quoted prices for similar instruments that are directly or indirectly observable in the market. This methodology applies to our Level 2 investments, which are composed of corporate debt securities, commercial paper, and U.S. government debt securities. ● Level 3: Significant unobservable inputs supported by little or no market activity. Financial instruments whose values are determined using pricing models, discounted cash flow methodologies, or similar techniques, for which determination of fair value requires significant judgment or estimation. This methodology applies to our Level 3 financial instruments, which are composed of contingent consideration. Financial instruments measured at fair value are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. There were no transfers within the hierarchy for any of the periods presented. In connection with the offering of Units in September 2017 (see Note 10), the Company issued warrants to purchase an aggregate of 322,727 shares of common stock. These warrants were exercisable at $30.00 per share and expire in two years. The warrants were liabilities pursuant to ASC 815. The warrant agreement provided for an adjustment to the number of common shares issuable under the warrant or adjustment to the exercise price, including but not limited to, if: (a) the Company issues shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivides or combines its common stock (i.e., stock split); or (c) the Company issues new securities for consideration less than the exercise price. Under ASC 815, warrants that provide for down-round exercise price protection are recognized as derivative liabilities. The Series F Preferred Shares contained an embedded conversion feature that was not clearly and closely related to the identified host instrument and, as such, was recognized as a derivative liability measured at fair value. The Company classified these derivatives on the consolidated balance sheet as a current liability. As discussed in Note 10, both the warrants and the Series F Preferred Shares were exchanged for common stock on March 6, 2018. The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.2 million at March 5, 2018, as calculated using the Monte Carlo simulation with the following assumptions: Series F Conversion Feature March 5, 2018 Stock price $ 20.05 Exercise price $ 27.50 Risk-free rate 2.2 % Volatility 88.2 % Term 1.5 The fair value of the warrant liability was estimated to be approximately $2.5 million at March 5, 2018 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability March 5, 2018 Stock price $ 20.05 Exercise price $ 30.00 Risk-free rate 2.2 % Volatility 88.2 % Term 1.5 The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative liabilities (in thousands): 2017 Series F Preferred Stock – Warrant Liability 2017 Series F Preferred Stock – Embedded Derivative Total Warrant and Derivative Liability Fair value – December 31, 2017 $ 3,388 $ 8,150 $ 11,538 Change in fair value (863 ) (987 ) (1,850 ) Exchange / conversion to common shares $ (2,525 ) $ (7,163 ) $ (9,688 ) Fair value – March 31, 2018 – – – The following table sets forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy as of March 31, 2019 and December 31, 2018 (in thousands): Fair Value Measurement as of March 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 5 $ – $ – $ 5 Commercial paper – 17,332 – 17,332 Corporate debt securities – 7,992 – 7,992 U.S. government debt securities – 4,932 – 4,932 Total $ 5 $ 30,256 $ – $ 30,261 Liabilities: Contingent consideration $ – $ – $ 203 $ 203 Total $ – $ – $ 203 $ 203 Fair Value Measurement as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 7 $ – $ – $ 7 Commercial paper – 21,392 – 21,392 Corporate debt securities – 5,448 – 5,448 U.S. government debt securities – 3,226 – 3,226 Total $ 7 $ 30,066 $ – $ 30,073 Liabilities: Contingent consideration $ – $ – $ 261 $ 261 Total $ – $ – $ 261 $ 261 In May 2018, the Company purchased the assets of a preclinical research sciences business and related real estate from Ibex Group, L.L.C., a Utah liability company, and Ibex Preclinical Research, Inc., a Utah corporation (collectively, “IBEX”). The aggregate purchase price was $3.8 million, of which $2.3 million was paid at closing and the balance satisfied by a promissory note payable to IBEX with an initial fair value of $1.2 million and contingent consideration with an initial fair value of $0.3 million The contingent consideration represents the estimated fair value of future payments due to the Seller of IBEX based on IBEX’s revenue generated from studies quoted prior to but completed after the transaction. Contingent consideration was initially recognized at fair value as purchase consideration and is subsequently remeasured at fair value through earnings. The initial fair value of the contingent consideration was based on the present value of estimated future cash flows using a 20% discount rate. The contingent consideration is the payment of 15% of the actual revenues received for work on any study initiated within 18 months following the closing of the purchase on the basis of certain specific customer prospects that received service proposals prior to the closing, provided that the total payments will not exceed $650,000. Adjustments to the fair value of the contingent consideration liability is included in general and administrative expense in the accompanying consolidated statements of operations. The following table sets forth the changes in the estimated fair value of our contingent consideration liability (in thousands) which is included in other current liabilities: Contingent Consideration Fair value – December 31, 2018 $ 261 Change in fair value 20 Earned and paid (78 ) Fair value – March 31, 2019 $ 203 |
Cash Equivalents and Available
Cash Equivalents and Available for Sale Marketable Securities | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Cash Equivalents and Available for Sale Marketable Securities | 5. CASH EQUIVALENTS AND AVAILABLE FOR SALE MARKETABLE SECURITIES Cash equivalents and available-for-sale marketable securities consisted of the following as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Market Value Cash equivalents: Money market funds $ 5 $ – $ – $ 5 Commercial paper 15,599 19 – 15,618 U.S. government debt securities 4,926 6 – 4,932 Total cash equivalents (1) 20,530 25 – 20,555 Short-term investments: Commercial paper 1,708 6 – 1,714 Corporate debt securities 7,970 22 – 7,992 Total short-term investments 9,678 28 – 9,706 Total $ 30,208 $ 53 $ – $ 30,261 (1) Included in cash and cash equivalents in the Company’s consolidated balance sheet as of March 31, 2019 in addition to $14.4 million of cash. December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Market Value Cash equivalents: Money market funds $ 7 $ – $ – $ 7 Commercial paper 20,648 30 – 20,678 U.S. government debt securities 3,224 2 – 3,226 Total cash equivalents (1) 23,879 32 – 23,911 Short-term investments: Commercial paper 714 – – 714 Corporate debt securities 5,444 5 (1 ) 5,448 Total short-term investments 6,158 5 (1 ) 6,162 Total $ 30,037 $ 37 $ (1 ) $ 30,073 (1) Included in cash and cash equivalents in the Company’s consolidated balance sheet as of December 31, 2018 in addition to $31.8 million of cash. All investments in debt securities held as of March 31, 2019 and December 31, 2018 had maturities of less than one year. For the three months ended March 31, 2019, the Company recognized no material realized gains or losses on available-for-sale marketable securities. |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | 6. PROPERTY AND EQUIPMENT, NET The following table presents the components of property and equipment, net (in thousands): March 31, 2019 December 31, 2018 Machinery and equipment $ 11,529 $ 8,276 Land and buildings 2,000 2,000 Computers and software 1,591 1,372 Leasehold improvements 2,174 1,230 Construction in progress 1,604 2,402 Furniture and equipment 470 614 Total property and equipment, gross 19,368 15,894 Accumulated depreciation (2,840 ) (2,158 ) Total property and equipment, net $ 16,528 $ 13,736 Depreciation and amortization expense for property and equipment, including assets acquired under financing leases for the three months ended March 31, 2019 and March 31, 2018 was as follows (in thousands): For the Three Months Ended March 31, 2019 2018 General and administrative expense $ 357 $ – Research and development expense 319 318 Total depreciation and amortization expense $ 676 $ 318 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | 7. LEASES The Company leases facilities and certain equipment under noncancelable leases that expire at various dates through November 2024. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases may include options to extend or terminate the lease at the election of the Company. These optional periods have not been considered in the determination of the right-of-use-assets or lease liabilities associated with these leases as the Company did not consider it reasonably certain it would exercise the options. As of March 31, 2019, the maturities of our operating and finance lease liabilities were as follows (in thousands): Operating leases Finance leases 2019 (excluding the three months ended March 31, 2019) $ 1,419 $ 459 2020 1,815 605 2021 1,458 602 2022 1,216 327 2023 – 255 2024 – 42 Total lease payments 5,908 2,290 Less: Imputed interest (860 ) (399 ) Total $ 5,048 $ 1,891 Supplemental balance sheet information related to leases was as follows (in thousands): Finance leases As of March 31, 2019 Finance lease right-of-use assets included within property and equipment, net $ 2,472 Current finance lease liabilities included within other current liabilities $ 445 Non-current finance lease liabilities included within other long-term liabilities 1,446 Total $ 1,891 Operating leases As of March 31, 2019 Current operating lease liabilities included within other current liabilities $ 1,482 Operating lease liabilities – non current 3,566 Total $ 5,048 The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease costs included within operating costs and expenses $ 482 Finance lease costs: Amortization of right of use assets $ 138 Interest on lease liabilities 23 Total $ 161 Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 470 Operating cash flows from finance leases 23 Financing cash flows from finance leases 118 Lease liabilities arising from obtaining right-of-use assets: Finance leases $ 1,824 Lease payments made in prior period reclassified to property and equipment 535 Operating leases 9 As of March 31, 2019, the weighted average remaining operating lease term is 3.3 years and the weighted average discount rate used to determine the operating lease liability was 9.90%. The weighted average remaining finance lease term is 4.0 years and the weighted average discount rate used to determine the finance lease liability was 9.68%. |
Accounts Payable and Accrued Ex
Accounts Payable and Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Accrued Expenses and Other Current Liabilities | 8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES The following table presents the major components of accounts payable and accrued expenses (in thousands): March 31, 2019 December 31, 2018 Accounts payable $ 1,967 $ 2,918 Salaries and other compensation 1,323 1,280 Other accruals 1,302 1,670 Legal and accounting 752 640 Total accounts payable and accrued expenses $ 5,344 $ 6,508 Salaries and other compensation include accrued payroll expense, accrued bonus, and estimated employer 401(k) plan contributions. Other current liabilities is comprised of the current portion of operating lease liabilities and finance lease liabilities, contingent consideration, and short term debt. The short term debt had a balance of $0.4 million as of March 31, 2019, while the other components are disclosed in the footnotes above. |
Long Term Notes Payable
Long Term Notes Payable | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long Term Notes Payable | 9. LONG TERM NOTE PAYABLE In connection with the IBEX Acquisition in May 2018, the Company issued a promissory note payable to the Seller with an initial fair value of $1.2 million. The promissory note has a principal balance of $1.3 million and bears interest at a rate of 3.5% interest per annum. Principal and interest are payable in five equal installments that began on November 3, 2018 and continuing on each six-month anniversary thereafter (“Payment Date”). The promissory note may be prepaid by the Company at any time and becomes due and payable at the earlier of the maturity date of November 3, 2020 or upon an event of default, which includes failure to pay any installment on each Payment Date, breach of any negative covenants, insolvency or bankruptcy. Upon the occurrence of an event of default, the promissory note will bear an accelerated interest rate of 7% per annum from the date of the event of default. The Company initially recognized the promissory note at its fair value, using an estimated market rate of interest for the Company, which was higher than the promissory note’s stated rate. The result of imputing a market rate of interest resulted in an initial discount to the principal balance of approximately $113,000, which is being amortized to interest expense over the term of the promissory note using the effective interest method. The unamortized debt discount was $53,000 and $68,000 at March 31, 2019 and December 31, 2018, respectively. Amortization of debt discount of $15,000 was included in interest income, net for the three months ended March 31, 2019 |
Preferred Shares and Common Sha
Preferred Shares and Common Shares | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Preferred Shares and Common Shares | 10. PREFERRED SHARES AND COMMON SHARES Exchange of 100% of Outstanding Series F Preferred Stock Shares and Warrants On September 20, 2017, the Company sold an aggregate of $17,750,000 worth of units of the Company’s securities (the “Units”) to accredited investors at a purchase price of $2,750 per Unit. Each Unit consisted of (i) one share of the Company’s newly authorized 6% Series F Convertible Preferred Stock, par value $0.001 per share (the “Series F Preferred Shares”), convertible into one hundred (100) shares of the Company’s common stock, and (ii) a two-year warrant to purchase up to 322,727 shares of the Company’s common stock, at an exercise price of $30.00 per share. The Series F Preferred Shares were convertible into shares of the Company’s common stock based on a conversion calculation equal to the stated value of the Series F Preferred Shares, plus all accrued and unpaid dividends, if any, on such Series F Preferred Shares, as of such date of determination, divided by the conversion price. The stated value of each Series F Preferred Share was $2,750 and the initial conversion price was $27.50 per share, each subject to adjustment for stock splits, stock dividends, recapitalizations, combinations, subdivisions or other similar events. On the two-year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, would, at the option of the holder, either (i) automatically convert into common stock of the Company at the conversion price then in effect or (ii) be repaid by the Company based on the stated value of such outstanding Series F Preferred Shares. The warrants issued in connection with the Series F Preferred Shares were determined to be liabilities pursuant to ASC 815. The warrant agreement provided for an adjustment to the number of common shares issuable under the warrant or adjustment to the exercise price, including but not limited to, if: (a) the Company issued shares of common stock as a dividend or distribution to holders of its common stock; (b) the Company subdivided or combined its common stock (i.e., stock split); or (c) the Company issues new securities for consideration less than the exercise price. Under ASC 815, warrants that provide for down-round exercise price protection are recognized as derivative liabilities. The conversion feature within the Series F Preferred Shares was determined to not be clearly and closely related to the identified host instrument and, as such, was recognized as a derivative liability measured at fair value pursuant to ASC 815. The initial fair value of the warrants and bifurcated embedded conversion feature, estimated to be approximately $4.3 million and $9.3 million, respectively, was deducted from the gross proceeds of the Unit offering to arrive at the initial discounted carrying value of the Series F Preferred Shares. The resulting discount to the aggregate stated value of the Series F Preferred Shares of approximately $13.6 million was recognized as accretion using the effective interest method similar to preferred stock dividends, over the two-year period prior to optional redemption by the holders. On March 6, 2018, the Company entered into separate exchange agreements (the “Exchange Agreements”) with holders (each a “Holder”, and collectively the “Holders”) of 100% of the Company’s outstanding Series F Preferred Shares, and the Company’s warrants to purchase shares of the Company’s common stock issued in connection with the Series F Preferred Shares (such “Warrants” and Series F Preferred Shares collectively referred to as the “Exchange Securities”) to exchange the Exchange Securities and unpaid dividends on the Series F Preferred Shares for common stock (the “Exchange”). The Exchange resulted in the following issuances: (A) all outstanding Series F Preferred Shares were converted into 972,070 shares of restricted common stock at an effective conversion price of $18.26 per share of common stock (the closing price of Common Stock on the NASDAQ Capital Market on February 26, 2018); (B) the right to receive 6% dividends underlying Series F Preferred Shares was terminated in exchange for 31,321 shares of restricted common stock; (C) 322,727 Warrants to purchase common stock were exchanged for 151,871 shares of restricted common stock; and (D) the Holders of the Warrants relinquished any and all other rights pursuant to the Warrants, including exercise price adjustments. As part of the Exchange, the Holders also relinquished all other rights related to the issuance of the Exchange Securities, the respective governing agreements and certificates of designation, including any related dividends, adjustment of conversion and exercise price, and repayment option. The existing registration rights agreement with the holders of the Series F Preferred Shares was also terminated and the holders of the Series F Preferred Shares waived the obligation of the Company to register the common shares issuable upon conversion of Series F Preferred Shares or upon exercise of the warrants, and waived any damages, penalties and defaults related to the Company failing to file or have declared effective a registration statement covering those shares. The exchange of all outstanding Series F Preferred Shares, and the holders’ right to receive 6% dividends, for common stock of the Company was recognized as follows: Fair market value of 1,003,393 shares of common stock issued at $20.05 (Company’s closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends $ 20,117,990 Carrying value of Series F Preferred Shares at March 5, 2018, including dividends (5,898,274 ) Carrying value of bifurcated conversion option at March 5, 2018 (7,162,587 ) Deemed dividend on Series F Preferred Shares exchange $ 7,057,129 As the Warrants were classified as a liability, the exchange of the Warrants for common shares was recognized as a liability extinguishment. As of March 5, 2018, the fair market value of the 151,871 common shares issued in the Exchange was $3,045,034 and the fair value of the common stock warrant liability was $2,525,567 resulting in a loss on extinguishment of warrant liability of $519,467 during the three months ended March 31, 2018. The Company recognized accretion of the discount to the stated value of the Series F Preferred Shares of approximately $698,000 during the three months ended March 31, 2018, as a reduction of additional paid-in capital and an increase in the carrying value of the Series F Preferred Shares. The accretion is presented in the Statement of Operations as a deemed dividend, increasing net loss to arrive at net loss attributable to common stockholders. Preferred Stock Conversion and Elimination On February 6, 2018, 15,756 shares of Series B Convertible Preferred Stock (“Series B Preferred Shares”) were converted into 262,606 shares of common stock. On March 6, 2018, the Company received conversion notices (in accordance with original terms) from holders of 100% of the outstanding shares of Series A Convertible Preferred Stock (the “Series A Preferred Shares”), Series B Preferred Shares and Series E Convertible Preferred Stock (the “Series E Preferred Shares”) and issued an aggregate of 7,945,250 shares of common stock to such holders. The shares of Series E Preferred Stock were held by Dr. Denver Lough, the Company’s Chief Executive Officer. On March 6, 2018, the Company entered into a new registration rights agreement (the “Lough Registration Rights Agreement”) with Dr. Lough, pursuant to which the Company agreed to file a registration statement to register the resale of 7,050,000 shares of Common Stock issued upon conversion of the Series E Preferred Shares within six months, to cause such registration statement to be declared effective by the Securities and Exchange Commission as promptly as possible following its filing and, with certain exceptions set forth in the Lough Registration Rights Agreement, to maintain the effectiveness of the registration statement until all of such shares have been sold or are otherwise able to be sold pursuant to Rule 144 under the Securities Act without restriction. On March 14, 2019, the Company’s registration obligation was waived, and the Lough Registration Rights Agreement amended to provide that Dr. Lough may demand registration by written request to the Company. Dr. Lough has not made a demand for filing a registration statement. On March 7, 2018, the Company filed a Certificate of Elimination with the Secretary of State of the State of Delaware terminating the Company’s Series A, Series B, Series C, Series D, Series E and Series F Preferred Stock. As a result, the Company has 25,000,000 shares of authorized and unissued preferred stock as of March 31, 2019 with no designation as to series. There was no convertible preferred stock outstanding as of March 31, 2019 and December 31, 2018. |
Stock Based Compensation
Stock Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Stock Based Compensation | 11. STOCK-BASED COMPENSATION For the three months ended March 31, 2019 and 2018, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands): For the Three Months Ended March 31 2019 2018 General and administrative expense $ 9,037 $ 5,772 Research and development expense 1,084 1,673 Sales and marketing expense 168 - Total stock-based compensation expense $ 10,289 $ 7,445 Incentive Compensation Plans 2019 Plan On October 5, 2018, the Company’s Board of Directors (the “Board”) approved the Company’s 2019 Equity Incentive Plan (the “2019 Plan”). The 2019 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. The Compensation Committee of the Board will administer the 2019 Plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 3,000,000 shares of common stock are issuable pursuant to awards under the 2019 Plan. Unless earlier terminated by the Board, the 2019 Plan shall terminate at the close of business on October 5, 2028. As of March 31, 2019, the Company had approximately 2,032,001 shares available for future issuances under the 2019 Plan. 2017 Plan On December 1, 2016, the Company’s Board of Directors (the “Board”) approved the Company’s 2017 Equity Incentive Plan (the “2017 Plan”). The purpose of the 2017 Plan is to promote the success of the Company and to increase stockholder value by providing an additional means through the grant of awards to attract, motivate, retain and reward selected employees, consultants and other eligible persons. The 2017 Plan provides for the grant of incentive stock options, nonqualified stock options, restricted stock, restricted stock units, stock appreciation rights and other types of stock-based awards to the Company’s employees, officers, directors and consultants. The Compensation Committee of the Board will administer the 2017 Plan, including determining which eligible participants will receive awards, the number of shares of common stock subject to the awards and the terms and conditions of such awards. Up to 7,300,000 (increased from 3,450,000 in October 2017) shares of common stock are issuable pursuant to awards under the 2017 Plan. Unless earlier terminated by the Board, the 2017 Plan shall terminate at the close of business on December 1, 2026. As of March 31, 2019, the Company had approximately 171,767 shares available for future issuances under the 2017 Plan. 2014 Plan In the fiscal year ended October 31, 2015, the Company adopted the 2014 Plan, an omnibus equity incentive plan administered by the Company’s board of directors, or by one or more committees of directors appointed by the Board, pursuant to which the Company may issue up to 2,250,000 shares of the Company’s common stock under equity-linked awards to certain officers, employees, directors and consultants. The 2014 Plan permits the grant of stock options, including incentive stock options and nonqualified stock options, stock appreciation rights, restricted shares, restricted share units, cash awards, or other awards, whether at a fixed or variable price, upon the passage of time, the occurrence of one or more events, or the satisfaction of performance criteria or other conditions, or any combination thereof. As of March 31, 2019, the Company had approximately 1,927,453 shares available for future issuances under the 2014 Plan. Stock Options A summary of the Company’s employee and non-employee stock option activity for three months ended March 31, 2019 is presented below: Number of shares Weighted-Average Exercise Price Outstanding – December 31, 2018 6,499,885 $ 14.02 Granted 578,701 $ 15.93 Exercised (1) (283,250 ) $ 3.99 Forfeited (218,520 ) $ 11.98 Outstanding – March 31, 2019 6,576,816 $ 14.56 Options exercisable, March 31, 2019 4,233,763 $ 11.21 Weighted-average grant date fair value of options granted during the three months ended March 31, 2019 $ 11.44 (1) The number of exercised options includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. Stock options are generally granted to employees or non-employees at exercise prices equal to the fair market value of the Company’s stock of the day prior to the grant. Stock options generally vest over one to three years and have a term of five to ten years. The total fair value of all options granted during the three months ended March 31, 2019 was approximately $6.6 million. The intrinsic value of options outstanding at March 31, 2019 was $18.5 million. The intrinsic value of options exercised during the three months ended March 31, 2019 was $1.9 million. The weighted average remaining contractual term of outstanding and exercisable options at March 31, 2019 was 8.6 years and 8.1 years, respectively. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions for the three months ended March 31, 2019: Risk free annual interest rate 2.2%-2.7 % Expected volatility 80.8%-97.5 % Expected term of options (years) 5.0-6.0 Assumed dividends None The fair value of employee and non-employee stock option grants is recognized over the vesting period of, generally, one to three years. As of March 31, 2019, there was approximately $17.0 million of unrecognized compensation cost related to non-vested employee and non-employee stock option awards, which is expected to be recognized over a remaining weighted-average vesting period of 0.7 years. Restricted-stock activity for employees and non-employees for the three months ended March 31, 2019: Number of shares Weighted-Average Grant-Date Fair Value Unvested - December 31, 2018 651,110 $ 23.65 Granted 40,000 16.43 Vested (1) (129,235 ) 21.14 Forfeited (45,000 ) 24.43 Unvested – March 31, 2019 516,875 23.98 (1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. The total fair value of restricted stock vested during the three months ended March 31, 2019, was approximately $2.7 million. The value of restricted stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and recognized over the vesting period of, generally, six months to three years. As of March 31, 2019, there was approximately $6.6 million of unrecognized compensation cost related to unvested restricted stock awards, which is expected to be recognized over a remaining weighted-average vesting period of 1.0 year. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. INCOME TAXES The Company has evaluated its income tax positions and determined that no material uncertain tax positions existed at March 31, 2019. The Company does not expect a significant change in its unrecognized tax benefits within the next twelve months. As of March 31, 2019 and December 31, 2018, the Company maintained a valuation allowance to fully offset its net deferred tax assets primarily attributable to operations in the United States, as the realization of such assets was not considered more likely than not. The Company files income tax returns in the U.S. Federal and various state and local jurisdictions. |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Loss Per Share | 13. LOSS PER SHARE The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: For the Three Months Ended March 31 2019 2018 Shares issuable upon exercise of stock options 6,576,816 4,814,568 Non-vested shares under restricted stock grants 516,875 199,375 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 14. COMMITMENTS AND CONTINGENCIES Contingencies On June 26, 2018, a class action complaint alleging violations of the Federal securities laws was filed in the United States District Court, District of Utah, by Jose Moreno against the Company and two directors of the Company, Case No. 2:18-cv-00510-JNP (the “Moreno Complaint”). On July 6, 2018, a similar complaint was filed in the same court against the same defendants by Yedid Lawi, Case No. 2:18-cv-00541-PMW (the “Lawi Complaint”). Both the Moreno Complaint and Lawi Complaint allege that the defendants made or were responsible for, disseminating information to the public through reports filed with the Securities and Exchange Commission and other channels that contained material misstatements or omissions in violation of Sections 10 and 20(a) of the Exchange Act and Rule 10b-5 adopted thereunder. Specifically, both complaints allege that the defendants misrepresented the status of one of the Company’s patent applications while touting the unique nature of the Company’s technology and its effectiveness. Plaintiffs are seeking damages suffered by them and the class consisting of the persons who acquired the publicly-traded securities of the Company between March 31, 2017, and June 22, 2018. Plaintiffs have filed motions to consolidate and for appointment as lead plaintiff. On November 28, 2018, the Court consolidated the Moreno and Lawi cases under the caption In re PolarityTE, Inc. Securities Litigation (the “Consolidated Securities Litigation”), and requested the appointment of the plaintiff in Lawi as the lead plaintiff. On January 16, 2019, the Court granted the motion of Yedid Lawi for appointment as lead plaintiff, and on February 1, 2019, the Court granted the lead plaintiff’s motion for approval of lead counsel and liaison counsel. The Court ordered that the lead plaintiff file and serve a consolidated complaint no later than 60 days after February 1, 2019, the defendants shall have 60 days after filing and service of the consolidated complaint to answer or otherwise respond, and the lead plaintiff must file a motion for class certification within 90 days of service of the consolidated complaint. The Lead Plaintiff filed a consolidated complaint on April 2, 2019, and asserted essentially the same violations of Federal securities laws recited in the original complaints. The Company believes the allegations in the consolidated complaint are without merit, and intends to defend the litigation, vigorously. The Company expects its first response will be to file a motion to dismiss the consolidated complaint. At this early stage of the proceedings the Company is unable to make any prediction regarding the outcome of the litigation. In the ordinary course of business, we may become involved in lawsuits, claims, investigations, proceedings, and threats of litigation relating to intellectual property, commercial arrangements, regulatory compliance, and other matters. Except as noted above, at March 31, 2019, we were not party to any legal or arbitration proceedings that may have significant effects on our financial position or results of operations. We are not a party to any material proceedings in which any director, member of senior management or affiliate of ours is either a party adverse to us or our subsidiaries or has a material interest adverse to us or our subsidiaries. Commitments The Company has entered into employment agreements with key executives that contain severance terms and change of control provisions. |
Certain Relationships and Relat
Certain Relationships and Related Transactions | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Certain Relationships and Related Transactions | 15. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In October 2018, the Company entered into an office lease covering approximately 7,250 square feet of rental space in the building located at 40 West 57 th Initially, the Company is using three offices and two work stations in the office and share common areas representing approximately 2,055 square feet. Cohen LLC is using approximately 1,220 square feet. The monthly lease payment for 3,275 square feet is $16,377. Of this amount $6,103 is allocated pro rata to Cohen LLC based on square footage occupied. Additional lease charges for operating expenses and taxes are allocated under the sublease based on the ratio of rent paid by the Company and Cohen LLC to total rent. Cohen LLC identified two associated entities that may wish to occupy an additional 2,753 square feet of space in the office. Under the terms of the sublease Cohen LLC can add this additional space to the 1,220 square feet occupied, which would bring the total space occupied by us and Cohen LLC to 6,028 square feet. Because a portion of the additional space subleased to Cohen LLC is less private and attractive, the Company agreed to reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot, which means the Company will be paying an annual lease rate for the space the Company uses of $62.70. Assuming Cohen LLC subleases the additional office space, our annual lease payment to the lessor would be $361,680, and Cohen LLC would pay to the Company $232,830 under the sublease. During the three months ended March 31, 2019, the Company recognized $51,000 of sublease income related to this agreement. As of March 31, 2019, there was $28,000 due from the related party under this agreement. In August 2018 David Seaburg was elected by the Board of Directors to serve as a director of the Company. Subsequently the Company entered into a written consulting agreement with Mr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period of two years for a fee consisting of (i) quarter-annual cash payment of $10,000, (ii) 60,000 restricted stock units issued under the Company equity incentive plan that vest in four equal installments every six months during the term of the agreement subject to continued service, and (iii) an annual award under the Company equity incentive plan of options exercisable over a term of 10 years to purchase common stock in number equal to the number of shares of common stock with a value of $150,000 at the time of the award based on a Black-Scholes calculation. The agreement terminated effective March 11, 2019, when he joined the Company as President of Corporate Development. Upon termination of the consulting agreement, Mr. Seaburg was issued new awards. The new awards related to his employment were entered into concurrently with the cancellation of the original awards under his consulting agreement. The modification is accounted for by calculating the incremental value of the new award as of the modification date. The incremental value will be expensed over the new award service period while the original value will continue to be expensed over the original term. As of the date the consulting agreement terminated 15,000 restricted stock units were vested and $6,667 of cash payments were accrued. The total value of Mr. Seaburg’s consulting agreement was approximately $1.7 million, which was being recognized as expense over the 24-month consulting period. Under this consulting agreement, the Company recognized approximately $121,000 of expense prior to the termination of the consulting agreement during the three months ended March 31, 2019. |
Segment Reporting
Segment Reporting | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Reporting | 16. SEGMENT REPORTING The Company’s current operations involve products and services which are managed separately. Accordingly, it operates in two segments: 1) regenerative medicine and 2) contract services. There was only one segment for the three months ended March 31, 2018. Certain information concerning our segments for the three months ended March 31, 2019 is presented in the following table (in thousands): For the Three Months Ended March 31, 2019 Net revenues: Reportable segments: Regenerative medicine $ 297 Contract services 1,168 Total net revenues $ 1,465 Net (loss)/income: Reportable segments: Regenerative medicine $ (25,768 ) Contract services 195 Total net loss $ (25,573 ) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 17. SUBSEQUENT EVENTS On April 10, 2019, the Company completed an underwritten offering with Cantor Fitzgerald & Co., as underwriter, providing for the issuance and sale of 3,418,918 shares of the Company’s common stock, par value $0.001 per share, at an offering price of $8.51 per share, for net proceeds of approximately $28.7 million, after deducting offering expenses payable by the Company. On April 22, 2019, PolarityTE MD, Inc., a subsidiary of PolarityTE, Inc., entered into a sublease agreement with Joseph M. Still Burn Centers, Inc., for 6,307 square feet of manufacturing, laboratory, and office space located at 3647 J. Dewey Grey Circle, Augusta, Georgia (the “Facility”). The initial term of the sublease for the Facility is five years commencing April 22, 2019, and the Company has an option to renew for three years after the initial term and a second option to renew for an additional two years thereafter. The annual base rental rate during the initial term is $9,986 per month, or a total of $119,833 per year, with a 3% annual increase as determined by a third-party fair market value analysis. In addition, the Company is obligated to pay (i) maintenance, repairs, replacements, and restorations to the Facility, (ii) its own utilities, and (iii) its share of operating expenses for the building based on the ratio of space leased by the Company to the total leasable square footage of the building. The Company intends to use the Facility to establish a manufacturing node for SkinTE™, with the potential to manufacture other regenerative tissue products in the Company’s pipeline. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation. |
Use of Estimates | Use of estimates. |
Segments | Segments. |
Cash and Cash Equivalents | Cash and cash equivalents. |
Investments | Investments |
Loss Per Share | Loss Per Share. Since the Company was in a loss position for all periods presented, basic net loss per share is the same as diluted net loss per share since the effects of potentially dilutive securities are antidilutive. |
Leases | Leases The Company has lease agreements with lease and non-lease components. As allowed under Topic 842, the Company has elected not to separate lease and non-lease components for any leases involving real estate and office equipment classes of assets and, as a result, accounts for the lease and non-lease components as a single lease component. The Company has also elected not to apply the recognition requirement of Topic 842 to leases with a term of 12 months or less for all classes of assets. |
Stock Based Compensation | Stock- Based Compensation. The fair value for options issued is estimated at the date of grant using a Black-Scholes option-pricing model. The risk-free rate is derived from the U.S. Treasury yield curve in effect at the time of the grant. The volatility factor is determined based on the Company’s historical stock prices. Forfeitures are recognized as they occur. The value of restricted stock grants is measured based on the fair market value of the Company’s common stock on the date of grant and amortized over the vesting period of, generally, six months to three years. The accounting for non-employee options and restricted stock is similar to that of employees. Stock-based compensation expense for nonemployee services has historically been subject to remeasurement at each reporting date as the underlying equity instruments vest and was recognized as an expense over the period during which services are received. Upon the adoption of ASU 2018-07, Compensation – Stock Compensation on January 1, 2019, the valuation was fixed at the implementation date and will be recognized as an expense on a straight-line basis over the remaining service period. |
Revenue Recognition | Revenue Recognition. In the regenerative medicine products segment, the Company records products revenues primarily from the sale of its regenerative tissue products. The Company sells its products to healthcare providers, primarily through direct sales representatives. Products revenues consists of a single performance obligation that the Company satisfies at a point in time. In general, the Company recognizes products revenues upon delivery to the customer. In the contract services segment, the Company records service revenues from the sale of its contract research services, which includes delivery of preclinical studies and other research services to unrelated third parties. Service revenues generally consist of a single performance obligation that the Company satisfies over time using an input method based on costs incurred to date relative to the total costs expected to be required to satisfy the performance obligation. The Company believes that this method provides a faithful depiction of the transfer of services over the term of the performance obligation based on the remaining services needed to satisfy the obligation. This requires the Company to make reasonable estimates of the extent of progress toward completion of the contract. As a result, unbilled receivables and deferred revenue are recognized based on payment timing and work completed. Generally, a portion of the payment is due upfront and the remainder upon completion of the study, with most studies completing in less than a year. As of March 31, 2019 and December 31, 2018, the Company had unbilled receivables of $225,000 and $157,000 and deferred revenue of $90,000 and $170,000 respectively. The unbilled receivables balance is included in consolidated accounts receivable. Revenues of $151,000 was recognized during the three months ended March 31, 2019 that was included in the deferred revenue balance as of December 31, 2018. Costs to obtain the contract are incurred for products revenues as they are shipped and are expensed as incurred. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326) |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements On January 1, 2019 the Company adopted ASU 2016-02, Leases (ASC 842) We elected the package of practical expedients permitted under the transition guidance, which allowed us to carryforward our historical lease classification, our assessment on whether a contract was or contains a lease, and our initial direct costs for any leases that existed prior to January 1, 2019. The impact of the adoption of ASC 842 on the accompanying Condensed Consolidated Balance Sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the Adoption of ASC 842 January 1, 2019 Operating lease right-of-use assets $ – $ 5,305 $ 5,305 Liabilities: Operating lease liabilities $ – $ 3,948 $ 3,948 Other current liabilities 316 1,432 1,748 Accounts payable and accrued expenses 6,508 (75 ) 6,433 The adjustments due to the adoption of ASC 842 related to the recognition of operating lease right-of-use assets and operating lease liabilities for the existing operating leases. A cumulative-effect adjustment to beginning accumulated deficit was not required. In June 2018, the FASB issued ASU 2018-07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment Accounting |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Schedule of Adoption of Accounting Pronouncements on Accompanying Condensed Consolidated Balance Sheet | The impact of the adoption of ASC 842 on the accompanying Condensed Consolidated Balance Sheet as of January 1, 2019 was as follows (in thousands): December 31, 2018 Adjustments Due to the Adoption of ASC 842 January 1, 2019 Operating lease right-of-use assets $ – $ 5,305 $ 5,305 Liabilities: Operating lease liabilities $ – $ 3,948 $ 3,948 Other current liabilities 316 1,432 1,748 Accounts payable and accrued expenses 6,508 (75 ) 6,433 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature | The fair value of the bifurcated embedded conversion feature was estimated to be approximately $7.2 million at March 5, 2018, as calculated using the Monte Carlo simulation with the following assumptions: Series F Conversion Feature March 5, 2018 Stock price $ 20.05 Exercise price $ 27.50 Risk-free rate 2.2 % Volatility 88.2 % Term 1.5 The fair value of the warrant liability was estimated to be approximately $2.5 million at March 5, 2018 as calculated using the Monte Carlo simulation with the following assumptions: Warrant Liability March 5, 2018 Stock price $ 20.05 Exercise price $ 30.00 Risk-free rate 2.2 % Volatility 88.2 % Term 1.5 |
Schedule of Changes in Estimated Fair Value for Level 3 Classified Derivative Warrant Liability | The following table sets forth the changes in the estimated fair value for our Level 3 classified derivative liabilities (in thousands): 2017 Series F Preferred Stock – Warrant Liability 2017 Series F Preferred Stock – Embedded Derivative Total Warrant and Derivative Liability Fair value – December 31, 2017 $ 3,388 $ 8,150 $ 11,538 Change in fair value (863 ) (987 ) (1,850 ) Exchange / conversion to common shares $ (2,525 ) $ (7,163 ) $ (9,688 ) Fair value – March 31, 2018 – – – |
Schedule of Fair Value of Financial Instruments Measured on Recurring Basis | The following table sets forth the fair value of the Company’s financial assets and liabilities measured on a recurring basis by level within the fair value hierarchy as of March 31, 2019 and December 31, 2018 (in thousands): Fair Value Measurement as of March 31, 2019 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 5 $ – $ – $ 5 Commercial paper – 17,332 – 17,332 Corporate debt securities – 7,992 – 7,992 U.S. government debt securities – 4,932 – 4,932 Total $ 5 $ 30,256 $ – $ 30,261 Liabilities: Contingent consideration $ – $ – $ 203 $ 203 Total $ – $ – $ 203 $ 203 Fair Value Measurement as of December 31, 2018 Level 1 Level 2 Level 3 Total Assets: Money market funds $ 7 $ – $ – $ 7 Commercial paper – 21,392 – 21,392 Corporate debt securities – 5,448 – 5,448 U.S. government debt securities – 3,226 – 3,226 Total $ 7 $ 30,066 $ – $ 30,073 Liabilities: Contingent consideration $ – $ – $ 261 $ 261 Total $ – $ – $ 261 $ 261 |
Schedule of Changes in Estimated Fair Value for Level 3 Classified Contingent Consideration | The following table sets forth the changes in the estimated fair value of our contingent consideration liability (in thousands) which is included in other current liabilities: Contingent Consideration Fair value – December 31, 2018 $ 261 Change in fair value 20 Earned and paid (78 ) Fair value – March 31, 2019 $ 203 |
Cash Equivalents and Availabl_2
Cash Equivalents and Available for Sale Marketable Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of Cash Equivalents and Available-for-sale Marketable Securities | Cash equivalents and available-for-sale marketable securities consisted of the following as of March 31, 2019 and December 31, 2018 (in thousands): March 31, 2019 Amortized Cost Unrealized Gains Unrealized Losses Market Value Cash equivalents: Money market funds $ 5 $ – $ – $ 5 Commercial paper 15,599 19 – 15,618 U.S. government debt securities 4,926 6 – 4,932 Total cash equivalents (1) 20,530 25 – 20,555 Short-term investments: Commercial paper 1,708 6 – 1,714 Corporate debt securities 7,970 22 – 7,992 Total short-term investments 9,678 28 – 9,706 Total $ 30,208 $ 53 $ – $ 30,261 (1) Included in cash and cash equivalents in the Company’s consolidated balance sheet as of March 31, 2019 in addition to $14.4 million of cash. December 31, 2018 Amortized Cost Unrealized Gains Unrealized Losses Market Value Cash equivalents: Money market funds $ 7 $ – $ – $ 7 Commercial paper 20,648 30 – 20,678 U.S. government debt securities 3,224 2 – 3,226 Total cash equivalents (1) 23,879 32 – 23,911 Short-term investments: Commercial paper 714 – – 714 Corporate debt securities 5,444 5 (1 ) 5,448 Total short-term investments 6,158 5 (1 ) 6,162 Total $ 30,037 $ 37 $ (1 ) $ 30,073 (1) Included in cash and cash equivalents in the Company’s consolidated balance sheet as of December 31, 2018 in addition to $31.8 million of cash. |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | The following table presents the components of property and equipment, net (in thousands): March 31, 2019 December 31, 2018 Machinery and equipment $ 11,529 $ 8,276 Land and buildings 2,000 2,000 Computers and software 1,591 1,372 Leasehold improvements 2,174 1,230 Construction in progress 1,604 2,402 Furniture and equipment 470 614 Total property and equipment, gross 19,368 15,894 Accumulated depreciation (2,840 ) (2,158 ) Total property and equipment, net $ 16,528 $ 13,736 |
Schedule of Depreciation Expense | Depreciation and amortization expense for property and equipment, including assets acquired under financing leases for the three months ended March 31, 2019 and March 31, 2018 was as follows (in thousands): For the Three Months Ended March 31, 2019 2018 General and administrative expense $ 357 $ – Research and development expense 319 318 Total depreciation and amortization expense $ 676 $ 318 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Schedule of Operating and Finance Lease Liabilities | As of March 31, 2019, the maturities of our operating and finance lease liabilities were as follows (in thousands): Operating leases Finance leases 2019 (excluding the three months ended March 31, 2019) $ 1,419 $ 459 2020 1,815 605 2021 1,458 602 2022 1,216 327 2023 – 255 2024 – 42 Total lease payments 5,908 2,290 Less: Imputed interest (860 ) (399 ) Total $ 5,048 $ 1,891 |
Shcedule of Supplemental Balance Sheet Information Related to Finance and Operating Leases | Supplemental balance sheet information related to leases was as follows (in thousands): Finance leases As of March 31, 2019 Finance lease right-of-use assets included within property and equipment, net $ 2,472 Current finance lease liabilities included within other current liabilities $ 445 Non-current finance lease liabilities included within other long-term liabilities 1,446 Total $ 1,891 Operating leases As of March 31, 2019 Current operating lease liabilities included within other current liabilities $ 1,482 Operating lease liabilities – non current 3,566 Total $ 5,048 |
Summary of Components of Lease Expense | The components of lease expense were as follows (in thousands): Three Months Ended March 31, 2019 Operating lease costs included within operating costs and expenses $ 482 Finance lease costs: Amortization of right of use assets $ 138 Interest on lease liabilities 23 Total $ 161 |
Schedule of Supplemental Cash Flow Information Related to Leases | Supplemental cash flow information related to leases was as follows (in thousands): Three Months Ended March 31, 2019 Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 470 Operating cash flows from finance leases 23 Financing cash flows from finance leases 118 Lease liabilities arising from obtaining right-of-use assets: Finance leases $ 1,824 Lease payments made in prior period reclassified to property and equipment 535 Operating leases 9 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Expenses | The following table presents the major components of accounts payable and accrued expenses (in thousands): December 31, 2018 October 31, 2018 October 31, 2017 Accounts payable $ 2,918 $ 2,007 $ 441 Salaries and other compensation 1,280 933 574 Other accruals 1,670 792 369 Legal and accounting 640 631 555 Total accounts payable and accrued expenses $ 6,508 $ 4,363 $ 1,939 |
Preferred Shares and Common S_2
Preferred Shares and Common Shares (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Deemed Dividend on Preferred Shares Exchange | The exchange of all outstanding Series F Preferred Shares, and the holders’ right to receive 6% dividends, for common stock of the Company was recognized as follows: Fair market value of 1,003,393 shares of common stock issued at $20.05 (Company’s closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends $ 20,117,990 Carrying value of Series F Preferred Shares at March 5, 2018, including dividends (5,898,274 ) Carrying value of bifurcated conversion option at March 5, 2018 (7,162,587 ) Deemed dividend on Series F Preferred Shares exchange $ 7,057,129 |
Stock Based Compensation (Table
Stock Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options | For the three months ended March 31, 2019 and 2018, the Company recorded stock-based compensation expense related to restricted stock awards and stock options as follows (in thousands): For the Three Months Ended March 31 2019 2018 General and administrative expense $ 9,037 $ 5,772 Research and development expense 1,084 1,673 Sales and marketing expense 168 - Total stock-based compensation expense $ 10,289 $ 7,445 |
Schedule of Share-based Compensation, Stock Options, Activity | A summary of the Company’s employee and non-employee stock option activity for three months ended March 31, 2019 is presented below: Number of shares Weighted-Average Exercise Price Outstanding – December 31, 2018 6,499,885 $ 14.02 Granted 578,701 $ 15.93 Exercised (1) (283,250 ) $ 3.99 Forfeited (218,520 ) $ 11.98 Outstanding – March 31, 2019 6,576,816 $ 14.56 Options exercisable, March 31, 2019 4,233,763 $ 11.21 Weighted-average grant date fair value of options granted during the three months ended March 31, 2019 $ 11.44 (1) The number of exercised options includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions for the three months ended March 31, 2019: Risk free annual interest rate 2.2%-2.7 % Expected volatility 80.8%-97.5 % Expected term of options (years) 5.0-6.0 Assumed dividends None |
Schedule of Share-based Compensation, Restricted Stock Activity | Restricted-stock activity for employees and non-employees for the three months ended March 31, 2019: Number of shares Weighted-Average Grant-Date Fair Value Unvested - December 31, 2018 651,110 $ 23.65 Granted 40,000 16.43 Vested (1) (129,235 ) 21.14 Forfeited (45,000 ) 24.43 Unvested – March 31, 2019 516,875 23.98 (1) The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Anti-dilutive Potential Shares Outstanding Activity | The following outstanding potentially dilutive shares have been excluded from the calculation of diluted net loss per share for the periods presented due to their anti-dilutive effect: For the Three Months Ended March 31 2019 2018 Shares issuable upon exercise of stock options 6,576,816 4,814,568 Non-vested shares under restricted stock grants 516,875 199,375 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Segment Information | There was only one segment for the three months ended March 31, 2018. Certain information concerning our segments for the three months ended March 31, 2019 is presented in the following table (in thousands): For the Three Months Ended March 31, 2019 Net revenues: Reportable segments: Regenerative medicine $ 297 Contract services 1,168 Total net revenues $ 1,465 Net (loss)/income: Reportable segments: Regenerative medicine $ (25,768 ) Contract services 195 Total net loss $ (25,573 ) |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)Segment | Dec. 31, 2018USD ($) | |
Accounting Policies [Abstract] | ||
Number of operating segments | Segment | 2 | |
Unbilled receivables | $ 225 | $ 157 |
Deferred revenue | 90 | $ 170 |
Recognized revenue | $ 151 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Adoption of Accounting Pronouncements on Accompanying Condensed Consolidated Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 |
Operating lease right-of-use assets | $ 4,960 | $ 5,305 | |
Operating lease liabilities | 3,566 | 3,948 | |
Other current liabilities | $ 2,550 | 1,748 | 316 |
Accounts payable and accrued expenses | 6,433 | $ 6,508 | |
Adjustments Due to the Adoption of ASC 842 [Member] | |||
Operating lease right-of-use assets | 5,305 | ||
Operating lease liabilities | 3,948 | ||
Other current liabilities | 1,432 | ||
Accounts payable and accrued expenses | $ (75) |
Liquidity (Details Narrative)
Liquidity (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Apr. 10, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Net loss | $ (25,573) | $ (11,777) | ||
Cash used in operating activities | $ (16,566) | $ (3,941) | ||
Public offering share value | 3,418,918 | |||
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |
Public offering price per share | $ 8.51 | |||
Proceeds for public offering | $ 28,700 |
Fair Value (Details Narrative)
Fair Value (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | ||
May 31, 2018 | Mar. 05, 2018 | Sep. 30, 2017 | |
Number of warrant to purchase shares of common stock | 322,727 | ||
Warrant exercisable price per share | $ 30 | ||
Warrants terms | 2 years | ||
Embedded conversion feature | $ 7,200 | ||
Fair value of warrant liability | $ 2,500 | ||
IBEX [Member] | |||
Payments to acquire assets | $ 3,800 | ||
Payments to acquire assets, cash paid | 2,300 | ||
Purchase of assets, equity interests issued | 1,200 | ||
Purchase of assets, contingent consideration | $ 300 | ||
Estimated future cash flows using, discount rate | 20.00% | ||
Contingent consideration payment percentage of actual revenues received | 15.00% | ||
Contingent consideration payment of actual revenues received | $ 650 |
Fair Value - Schedule of Fair V
Fair Value - Schedule of Fair Value Assumptions of Warrants and Embedded Conversion Feature (Details) - Monte Carlo Simulation [Member] | Mar. 05, 2018$ / shares |
Measurement Input, Stock Price [Member] | Warrant Liability [Member] | |
Fair value assumptions, measurement input, per share | $ 20.05 |
Measurement Input, Exercise Price [Member] | Warrant Liability [Member] | |
Fair value assumptions, measurement input, per share | $ 30 |
Measurement Input, Risk Free Interest Rate [Member] | Warrant Liability [Member] | |
Fair value assumptions, measurement input, percentages | 2.20% |
Measurement Input, Price Volatility [Member] | Warrant Liability [Member] | |
Fair value assumptions, measurement input, percentages | 88.20% |
Measurement Input, Expected Term [Member] | Warrant Liability [Member] | |
Fair value assumptions, measurement input, term | 1 year 6 months |
Series F Conversion Feature [Member] | Measurement Input, Stock Price [Member] | |
Fair value assumptions, measurement input, per share | $ 20.05 |
Series F Conversion Feature [Member] | Measurement Input, Exercise Price [Member] | |
Fair value assumptions, measurement input, per share | $ 27.50 |
Series F Conversion Feature [Member] | Measurement Input, Risk Free Interest Rate [Member] | |
Fair value assumptions, measurement input, percentages | 2.20% |
Series F Conversion Feature [Member] | Measurement Input, Price Volatility [Member] | |
Fair value assumptions, measurement input, percentages | 88.20% |
Series F Conversion Feature [Member] | Measurement Input, Expected Term [Member] | |
Fair value assumptions, measurement input, term | 1 year 6 months |
Fair Value - Schedule of Change
Fair Value - Schedule of Changes in Estimated Fair Value for Level 3 Classified Derivative Warrant Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair value at the beginning of period | $ 261 | $ 11,538 |
Change in fair value | 20 | (1,850) |
Exchange / conversion to common shares | (9,688) | |
Fair value at the end of period | $ 203 | |
2017 Series F Preferred Stock Warrant Liability [Member] | ||
Fair value at the beginning of period | 3,388 | |
Change in fair value | (863) | |
Exchange / conversion to common shares | (2,525) | |
Fair value at the end of period | ||
2017 Series F Preferred Stock Embedded Derivative [Member] | ||
Fair value at the beginning of period | 8,150 | |
Change in fair value | (987) | |
Exchange / conversion to common shares | (7,163) | |
Fair value at the end of period |
Fair Value - Schedule of Fair_2
Fair Value - Schedule of Fair Value of Financial Instruments Measured on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Money market funds | $ 5 | $ 7 |
Commercial paper | 17,332 | 21,392 |
Corporate debt securities | 7,992 | 5,448 |
U.S. government debt securities | 4,932 | 3,226 |
Total | 30,261 | 30,073 |
Contingent consideration | 203 | 261 |
Total | 203 | 261 |
Level 1 [Member] | ||
Money market funds | 5 | 7 |
Commercial paper | ||
Corporate debt securities | ||
U.S. government debt securities | ||
Total | 5 | 7 |
Contingent consideration | ||
Total | ||
Level 2 [Member] | ||
Money market funds | ||
Commercial paper | 17,332 | 21,392 |
Corporate debt securities | 7,992 | 5,448 |
U.S. government debt securities | 4,932 | 3,226 |
Total | 30,256 | 30,066 |
Contingent consideration | ||
Total | ||
Level 3 [Member] | ||
Money market funds | ||
Commercial paper | ||
Corporate debt securities | ||
U.S. government debt securities | ||
Total | ||
Contingent consideration | 203 | 261 |
Total | $ 203 | $ 261 |
Fair Value - Schedule of Chan_2
Fair Value - Schedule of Changes in Estimated Fair Value for Level 3 Classified Contingent Consideration (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Fair value at the beginning of period | $ 261 | $ 11,538 |
Change in fair value | 20 | (1,850) |
Earned and paid | (78) | |
Fair value at the end of period | $ 203 |
Cash Equivalents and Availabl_3
Cash Equivalents and Available for Sale Marketable Securities - Schedule of Cash Equivalents and Available-for-sale Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | ||
Money market funds | $ 5 | $ 7 | ||
Commercial paper | 15,618 | 20,678 | ||
U.S. government debt securities | 4,932 | 3,226 | ||
Total cash equivalents | 20,555 | [1] | 23,911 | [2] |
Commercial paper | 1,714 | 714 | ||
Corporate debt securities | 7,992 | 5,448 | ||
Total short-term investments | 9,706 | 6,162 | ||
Total | 30,261 | 30,073 | ||
Amortized Cost [Member] | ||||
Money market funds | 5 | 7 | ||
Commercial paper | 15,599 | 20,648 | ||
U.S. government debt securities | 4,926 | 3,224 | ||
Total cash equivalents | 20,530 | [1] | 23,879 | [2] |
Commercial paper | 1,708 | 714 | ||
Corporate debt securities | 7,970 | 5,444 | ||
Total short-term investments | 9,678 | 6,158 | ||
Total | 30,208 | 30,037 | ||
Unrealized Gains [Member] | ||||
Money market funds | ||||
Commercial paper | 19 | 30 | ||
U.S. government debt securities | 6 | 2 | ||
Total cash equivalents | 25 | [1] | 32 | [2] |
Commercial paper | 6 | |||
Corporate debt securities | 22 | 5 | ||
Total short-term investments | 28 | 5 | ||
Total | 53 | 37 | ||
Unrealized Losses [Member] | ||||
Money market funds | ||||
Commercial paper | ||||
U.S. government debt securities | ||||
Total cash equivalents | [1] | [2] | ||
Commercial paper | ||||
Corporate debt securities | (1) | |||
Total short-term investments | (1) | |||
Total | $ (1) | |||
[1] | Included in cash and cash equivalents in the Company's consolidated balance sheet as of March 31, 2019 in addition to $14.4 million of cash. | |||
[2] | Included in cash and cash equivalents in the Company's consolidated balance sheet as of December 31, 2018 in addition to $31.8 million of cash. |
Cash Equivalents and Availabl_4
Cash Equivalents and Available for Sale Marketable Securities - Schedule of Cash Equivalents and Available-for-sale Marketable Securities (Details) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Money market funds | $ 5 | $ 7 |
Cash and Cash Equivalents [Member] | ||
Money market funds | $ 14,400 | $ 31,800 |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Abstract] | ||
Machinery and equipment | $ 11,529 | $ 8,276 |
Land and buildings | 2,000 | 2,000 |
Computers and software | 1,591 | 1,372 |
Leasehold improvements | 2,174 | 1,230 |
Construction in progress | 1,604 | 2,402 |
Furniture and equipment | 470 | 614 |
Total property and equipment, gross | 19,368 | 15,894 |
Accumulated depreciation | (2,840) | (2,158) |
Total property and equipment, net | $ 16,528 | $ 13,736 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
General and administrative expense | $ 17,195 | $ 7,573 |
Research and development expense | 5,352 | 5,572 |
Total depreciation and amortization expense | 676 | 318 |
Depreciation [Member] | ||
General and administrative expense | 357 | |
Research and development expense | 319 | 318 |
Total depreciation and amortization expense | $ 676 | $ 318 |
Leases (Details Narrative)
Leases (Details Narrative) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases facilities, description | The Company leases facilities and certain equipment under noncancelable leases that expire at various dates through November 2024. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases may include options to extend or terminate the lease at the election of the Company. |
Weighted average remaining operating lease term, operating lease | 3 years 3 months 19 days |
Weighted average discount rate, operating lease | 9.90% |
Weighted average remaining operating lease term, finance lease | 4 years |
Weighted average discount rate, finance lease | 9.68% |
Leases - Schedule of Operating
Leases - Schedule of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Mar. 31, 2018 |
Leases [Abstract] | ||
2019 (excluding the three months ended March 31, 2019) | $ 1,419 | |
2020 | 1,815 | |
2021 | 1,458 | |
2022 | 1,216 | |
2023 | ||
2024 | ||
Total lease payments | 5,908 | |
Less: Imputed interest | (860) | |
Total | $ 5,048 | 5,048 |
2019 (excluding the three months ended March 31, 2019) | 459 | |
2020 | 605 | |
2021 | 602 | |
2022 | 327 | |
2023 | 255 | |
2024 | 42 | |
Total lease payments | 2,290 | |
Less: Imputed interest | (399) | |
Total | $ 1,891 | $ 1,891 |
Leases - Shcedule of Supplement
Leases - Shcedule of Supplemental Balance Sheet Information Related to Finance and Operating Leases (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Leases [Abstract] | ||||
Finance lease right-of-use assets included within property and equipment, net | $ 2,472 | |||
Current finance lease liabilities included within other current liabilities | 445 | |||
Non-current finance lease liabilities included within other long-term liabilities | 1,446 | |||
Total | 1,891 | $ 1,891 | ||
Current operating lease liabilities included within other current liabilities | 1,482 | |||
Operating lease liabilities - non current | 3,566 | $ 3,948 | ||
Total | $ 5,048 | $ 5,048 |
Leases - Summary of Components
Leases - Summary of Components of Lease Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease costs included within operating costs and expenses | $ 482 |
Amortization of right of use assets | 138 |
Interest on lease liabilities | 23 |
Total | $ 161 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Cash Flow Information Related to Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 470 |
Operating cash flows from finance leases | 23 |
Financing cash flows from finance leases | 118 |
Finance leases | 1,824 |
Lease payments made in prior period reclassified to property and equipment | 535 |
Operating leases | $ 9 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Expenses and Other Current Liabilities (Details Narrative) $ in Thousands | Mar. 31, 2019USD ($) |
Payables and Accruals [Abstract] | |
Short term debt | $ 400 |
Accounts Payable and Accrued _4
Accounts Payable and Accrued Expenses and Other Current Liabilities -Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accounts payable | $ 1,967 | $ 2,918 |
Salaries and other compensation | 1,323 | 1,280 |
Other accruals | 1,302 | 1,670 |
Legal and accounting | 752 | 640 |
Total accounts payable and accrued expenses | $ 5,344 | $ 6,508 |
Long Term Note Payable (Details
Long Term Note Payable (Details Narrative) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | |
Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Unamortized debt discount | $ 68 | $ 53 | |
Amortization of debt discount | 15 | ||
Promissory Note [Member] | |||
Promissory note payable | $ 1,300 | ||
Interest rate | 3.50% | ||
Maturity date | Nov. 3, 2020 | ||
Accelerated interest rate | 7.00% | ||
Interest expenses | $ 113 | ||
Ibex Group, L.L.C [Member] | Promissory Note [Member] | |||
Initial fair value of liabilities | $ 1,200 |
Preferred Shares and Common S_3
Preferred Shares and Common Shares (Details Narrative) - USD ($) | Mar. 06, 2018 | Mar. 05, 2018 | Feb. 06, 2018 | Sep. 20, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Apr. 10, 2018 | Sep. 30, 2017 |
Sale of stock price, per share | $ 8.51 | ||||||||
Warrant term | 2 years | ||||||||
Warrant exercise price per share | $ 30 | ||||||||
Fair value of warrants | $ 2,525,567 | ||||||||
Conversion of preferred stock into common stock, number shares issued | 3,045,034 | ||||||||
Number of warrants exchanged to purchase common stock | 322,727 | ||||||||
Preferred stock, shares authorized | 25,000,000 | 25,000,000 | |||||||
Convertible preferred stock, shares outstanding | 0 | 0 | |||||||
Warrant Liability [Member] | |||||||||
Gain/loss on extinguishment of warrant liability | $ 519,467 | ||||||||
6% Series F Convertible Preferred Stock [Member] | |||||||||
Preferred stock, stated value per share | $ 2,750 | ||||||||
Preferred stock initial conversion price, per share | $ 27.50 | ||||||||
6% Series F Convertible Preferred Stock [Member] | Accredited Investors [Member] | |||||||||
Sales of stock amount | $ 17,750,000 | ||||||||
Sale of stock price, per share | $ 2,750 | ||||||||
Preferred stock, stated value per share | $ 0.001 | ||||||||
Conversion of stock shares converted | 100 | ||||||||
Warrant term | 2 years | ||||||||
Warrants to purchase shares of common stock | 322,727 | ||||||||
Warrant exercise price per share | $ 30 | ||||||||
Series F Preferred Stock [Member] | |||||||||
Description on certificate of designation | On the two-year anniversary of the initial issuance date, any Series F Preferred Shares outstanding and not otherwise already converted, would, at the option of the holder, either (i) automatically convert into common stock of the Company at the conversion price then in effect or (ii) be repaid by the Company based on the stated value of such outstanding Series F Preferred Shares. | ||||||||
Fair value of warrants | $ 4,300,000 | ||||||||
Bifurcated embedded conversion feature | 9,300,000 | ||||||||
Preferred stock dividends | $ 13,600,000 | ||||||||
Beneficially ownership percentage | 100.00% | ||||||||
Number of warrants exchanged to purchase common stock | 322,727 | ||||||||
Preferred stock reduction in additional paid in capital | $ 698,000 | ||||||||
Series F Preferred Stock [Member] | Restricted Stock [Member] | |||||||||
Conversion of stock shares converted | 972,070 | ||||||||
Conversion price, per share | $ 18.26 | ||||||||
Preferred stock dividend percentage | 6.00% | ||||||||
Conversion of preferred stock into common stock, number shares issued | 31,321 | ||||||||
Number of warrants exchanged to purchase common stock | 151,871 | ||||||||
Series B Preferred Shares [Member] | |||||||||
Conversion of stock shares converted | 15,756 | ||||||||
Beneficially ownership percentage | 100.00% | ||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | 262,606 | |||||||
Series A Preferred Shares [Member] | |||||||||
Beneficially ownership percentage | 100.00% | ||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | ||||||||
Series E Preferred Shares [Member] | |||||||||
Beneficially ownership percentage | 100.00% | ||||||||
Series E Preferred Shares [Member] | |||||||||
Conversion of preferred stock into common stock, number shares issued | 7,945,250 | ||||||||
Series E Preferred Shares [Member] | Lough Registration Rights Agreement [Member] | |||||||||
Conversion of preferred stock into common stock, number shares issued | 7,050,000 |
Preferred Shares and Common S_4
Preferred Shares and Common Shares - Schedule of Deemed Dividend on Preferred Shares Exchange (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Equity [Abstract] | |
Fair market value of 1,003,393 shares of common stock issued at $20.05 (Company's closing stock price on March 5, 2018) in exchange for Series F Preferred Shares and accrued dividends | $ 20,117,990 |
Carrying value of Series F Preferred Shares at March 5, 2018, including dividends | (5,898,274) |
Carrying value of bifurcated conversion option at March 5, 2018 | (7,162,587) |
Deemed dividend on Series F Preferred Shares exchange | $ 7,057,129 |
Preferred Shares and Common S_5
Preferred Shares and Common Shares - Schedule of Deemed Dividend on Preferred Shares Exchange (Details) (Parenthetical) - Series F Preferred Stock [Member] | Mar. 05, 2018$ / sharesshares |
Fair market value of common stock issued, shares | shares | 1,003,393 |
Common stock price per share | $ / shares | $ 20.05 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details Narrative) - USD ($) $ in Thousands | Oct. 05, 2018 | Dec. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Oct. 31, 2017 | Oct. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of stock options shares granted | $ 10,327 | $ 7,445 | ||||
Share-based compensation arrangement by share-based payment award, options, outstanding, intrinsic value | 18,500 | |||||
Intrinsic value of options exercised | $ 1,900 | |||||
Weighted average remaining contractual term, outstanding | 8 years 7 months 6 days | |||||
Weighted average remaining contractual term, exercisable options | 8 years 1 month 6 days | |||||
Unrecognized compensation cost | $ 17,000 | |||||
Unrecognized compensation cost, period for recognition | 8 months 12 days | |||||
Employee Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Fair value of stock options shares granted | $ 6,600 | |||||
Restricted Stock and Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost | $ 6,600 | |||||
Unrecognized compensation cost, period for recognition | 1 year | |||||
Fair value of restricted stock vested | $ 2,700 | |||||
Maximum [Member] | Restricted Stock and Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vesting term | 3 years | |||||
Maximum [Member] | Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vesting term | 3 years | |||||
Stock options expire term | 10 years | |||||
Minimum [Member] | Restricted Stock and Restricted Stock Units [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vesting term | 6 months | |||||
Minimum [Member] | Stock Option [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options vesting term | 1 year | |||||
Stock options expire term | 5 years | |||||
2019 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock based compensation terminate date | Oct. 5, 2028 | |||||
Number of share available for future issuance | 2,032,001 | |||||
2019 Equity Incentive Plan [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of common stock shares issued | 3,000,000 | |||||
2017 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of common stock shares issued | 3,450,000 | |||||
Stock based compensation terminate date | Dec. 1, 2026 | |||||
Number of share available for future issuance | 171,767 | |||||
2017 Equity Incentive Plan [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of common stock shares issued | 7,300,000 | |||||
2014 Equity Incentive Plan [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of share available for future issuance | 1,927,453 | |||||
2014 Equity Incentive Plan [Member] | Maximum [Member] | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of common stock shares issued | 2,250,000 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Share-based Compensation Related to Restricted Stock Awards and Stock Options (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
General and administrative expense | $ 17,195 | $ 7,573 |
Research and development expense | 5,352 | 5,572 |
Sales and marketing expense | 3,953 | |
Restricted Stock Awards and Stock Options [Member] | ||
General and administrative expense | 9,037 | 5,772 |
Research and development expense | 1,084 | 1,673 |
Sales and marketing expense | 168 | |
Total stock-based compensation expense | $ 10,289 | $ 7,445 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Share-based Compensation, Stock Options, Activity (Details) - Employee Stock Option [Member] | 3 Months Ended | |
Mar. 31, 2019$ / sharesshares | ||
Number of Shares, Outstanding at beginning of period | shares | 6,499,885 | |
Number of Shares, Granted | shares | 578,701 | |
Number of Shares, Exercised | shares | (283,250) | [1] |
Number of Shares, Forfeited | shares | (218,520) | |
Number of Shares, Outstanding at end of period | shares | 6,576,816 | |
Number of Shares, Options exercisable | shares | 4,233,763 | |
Weighted Average Exercise Price, Outstanding at beginning of year | $ 14.02 | |
Weighted Average Exercise Price, Granted | 15.93 | |
Weighted Average Exercise Price, Exercised | 3.99 | [1] |
Weighted Average Exercise Price, Forfeited | 11.98 | |
Weighted Average Exercise Price, Outstanding at end of year | 14.56 | |
Weighted Average Exercise Price, Options exercisable | 11.21 | |
Weighted-average fair value of options granted during the period | $ 11.44 | |
[1] | The number of exercised options includes shares withheld on behalf of employees to satisfy minimum statutory tax withholding requirements. |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Risk free annual interest rate, minimum | 2.20% |
Risk free annual interest rate, maximum | 2.70% |
Expected volatility, minimum | 80.80% |
Expected volatility, maximum | 97.50% |
Assumed dividends | 0.00% |
Minimum [Member] | |
Expected term of options (years) | 5 years |
Maximum [Member] | |
Expected term of options (years) | 6 years |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Share-based Compensation, Restricted Stock Activity (Details) - Restricted Stock and Restricted Stock Units [Member] | 3 Months Ended | |
Mar. 31, 2019$ / sharesshares | ||
Number of Shares, Unvested at beginning of period | shares | 651,110 | |
Number of Shares, Granted | shares | 40,000 | |
Number of Shares, Vested | shares | (129,235) | [1] |
Number of Shares, Forfeited | shares | (45,000) | |
Number of Shares, Unvested at end of period | shares | 516,875 | |
Weighted-Average Grant-Date Fair Value Unvested at beginning of period | $ / shares | $ 23.65 | |
Weighted-Average Grant-Date Fair Value, Granted | $ / shares | 16.43 | |
Weighted-Average Grant-Date Fair Value, Vested | $ / shares | 21.14 | [1] |
Weighted-Average Grant-Date Fair Value, Forfeited | $ / shares | 24.43 | |
Weighted-Average Grant-Date Fair Value, Unvested at end of period | $ / shares | $ 23.98 | |
[1] | The number of vested restricted stock units includes shares that were withheld on behalf of employees to satisfy the minimum statutory tax withholding requirements. |
Loss Per Share - Schedule of An
Loss Per Share - Schedule of Anti-dilutive Potential Shares Outstanding Activity (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Shares Issuable Upon Exercise of Stock Options [Member] | ||
Antidilutive shares | 6,576,816 | 4,814,568 |
Non-vested Shares Under Restricted Stock Grants [Member] | ||
Antidilutive shares | 516,875 | 199,375 |
Certain Relationships and Rel_2
Certain Relationships and Related Transactions (Details Narrative) | 1 Months Ended | 3 Months Ended | |
Oct. 31, 2018USD ($)a | Aug. 31, 2018USD ($) | Mar. 31, 2019USD ($)ashares | |
Lease rental square feet | a | 3,275 | ||
Annual lease rate | $ 357,000 | ||
Monthly lease payment | 16,377 | ||
Annual lease payment to lessor | 361,680 | ||
Sublease income | 51,000 | ||
Due from related party | $ 28,000 | ||
Cohen LLC [Member] | |||
Lease rental square feet | a | 1,220 | ||
Operating leases, description | Under the terms of the sublease Cohen LLC can add this additional space to the 1,220 square feet occupied, which would bring the total space occupied by us and Cohen LLC to 6,028 square feet. Because a portion of the additional space subleased to Cohen LLC is less private and attractive, the Company agreed to reduce the overall annual lease rate for the Cohen LLC space to $58.60 per square foot, which means the Company will be paying an annual lease rate for the space the Company uses of $62.70. | ||
Pro rata basis of rent amount | $ 6,103 | ||
Additional square feet of office space | a | 2,753 | ||
Annual lease payment to lessor | $ 232,830 | ||
Three Offices and Two Work Stations [Member] | |||
Lease rental square feet | a | 2,055 | ||
David Seaburg [Member] | |||
Compensation arrangement with Director | Mr. Seaburg pursuant to which he will provide investor relations and other services to the Company over a period of two years for a fee consisting of (i) quarter-annual cash payment of $10,000, (ii) 60,000 restricted stock units issued under the Company equity incentive plan that vest in four equal installments every six months during the term of the agreement subject to continued service, and (iii) an annual award under the Company equity incentive plan of options exercisable over a term of 10 years to purchase common stock in number equal to the number of shares of common stock with a value of $150,000 at the time of the award based on a Black-Scholes calculation. The agreement terminated effective March 11, 2019, when he joined the Company as President of Corporate Development. | ||
Cash payments accrued | $ 6,667 | ||
Compensation expense | $ 1,700,000 | $ 121,000 | |
David Seaburg [Member] | Restricted Stock Units (RSUs) [Member] | |||
Share based compensation vested | shares | 15,000 | ||
Office Lease [Member] | |||
Lease rental square feet | a | 7,250 | ||
Lease term | 3 years | ||
Annual lease rate | $ 60,000 | ||
Operating leases, description | Initially the Company will occupy and pay for only 3,275 square feet of space, and the Company is not obligated under the lease to pay for the remaining 3,975 square feet covered by the lease unless we elect to occupy that additional space. Comparable annual lease rates for similar office space in the area range between $67 and $110 per square foot. | ||
Office Lease [Member] | Minimum [Member] | |||
Annual lease rate | $ 67,000 | ||
Office Lease [Member] | Maximum [Member] | |||
Annual lease rate | $ 110,000 |
Segment Reporting (Details Narr
Segment Reporting (Details Narrative) | 3 Months Ended |
Mar. 31, 2019Segment | |
Segment Reporting [Abstract] | |
Number of operating segment | 2 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Total net revenues | $ 1,465 | $ 3 |
Total net loss | (25,573) | $ (11,777) |
Regenerative Medicine [Member] | ||
Total net revenues | 297 | |
Total net loss | (25,768) | |
Contract Services [Member] | ||
Total net revenues | 1,168 | |
Total net loss | $ 195 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - USD ($) | Apr. 22, 2019 | Apr. 10, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Apr. 10, 2018 | Mar. 31, 2018 |
Common stock, par value | $ 0.001 | $ 0.001 | $ 0.001 | |||
Sale of stock price, per share | $ 8.51 | |||||
Sublease description | The Company leases facilities and certain equipment under noncancelable leases that expire at various dates through November 2024. These leases require monthly lease payments that may be subject to annual increases throughout the lease term. Certain of these leases may include options to extend or terminate the lease at the election of the Company. | |||||
Sublease payable | $ 5,048,000 | $ 5,048,000 | ||||
Subsequent Event [Member] | Cantor Fitzgerald & Co [Member] | ||||||
Number of stock issued | 3,418,918 | |||||
Common stock, par value | $ 0.001 | |||||
Sale of stock price, per share | $ 8.51 | |||||
Number of stock issued value | $ 28,700,000 | |||||
Subsequent Event [Member] | Joseph M. Still Burn Centers, Inc [Member] | Sublease Agreement [Member] | ||||||
Sublease description | On April 22, 2019, PolarityTE MD, Inc. , a subsidiary of PolarityTE, Inc., entered into a sublease agreement with Joseph M. Still Burn Centers, Inc., for 6,307 square feet of manufacturing, laboratory, and office space located at 3647 J. Dewey Grey Circle, Augusta, Georgia (the "Facility"). The initial term of the sublease for the Facility is five years commencing April 22, 2019, and the Company has an option to renew for three years after the initial term and a second option to renew for an additional two years thereafter. | |||||
Sublease term | 5 years | |||||
Sublease renewal term | 3 years | |||||
Sublease option to extend | Second option to renew for an additional two years thereafter | |||||
Sublease payment obligation description | Company is obligated to pay (i) maintenance, repairs, replacements, and restorations to the Facility, (ii) its own utilities, and (iii) its share of operating expenses for the building based on the ratio of space leased by the Company to the total leasable square footage of the building. | |||||
Sublease monthly rent | $ 9,986 | |||||
Sublease payable | $ 119,833 | |||||
Sublease annual increase percentage | 3.00% |