Cover
Cover - shares | 3 Months Ended | |
Mar. 31, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Period Focus | Q1 | |
Document Fiscal Year Focus | 2021 | |
Current Fiscal Year End Date | --12-31 | |
Entity File Number | 001-34822 | |
Entity Registrant Name | ClearPoint Neuro, Inc. | |
Entity Central Index Key | 0001285550 | |
Entity Incorporation, State or Country Code | DE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 20,761,486 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 64,858 | $ 20,099 |
Accounts receivable, net | 2,004 | 1,881 |
Inventory, net | 3,266 | 3,238 |
Prepaid expenses and other current assets | 254 | 244 |
Total current assets | 70,382 | 25,462 |
Property and equipment, net | 292 | 319 |
Operating lease rights of use | 2,613 | 2,736 |
Software license inventory | 589 | 589 |
Licensing rights | 331 | 353 |
Other assets | 56 | 59 |
Total assets | 74,263 | 29,518 |
Current liabilities: | ||
Accounts payable | 727 | 300 |
Accrued compensation | 990 | 1,595 |
Other accrued liabilities | 473 | 349 |
Operating lease liabilities, current portion | 430 | 394 |
Deferred product and service revenue | 501 | 562 |
Total current liabilities | 3,121 | 3,200 |
Operating lease liabilities, net of current portion | 2,327 | 2,446 |
Deferred product and service revenue, net of current portion | 318 | 215 |
2020 senior secured convertible notes payable, net | 24,515 | 21,280 |
Total liabilities | 30,281 | 27,141 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value; 25,000,000 shares authorized; none issued and outstanding at March 31, 2021 and December 31, 2020 | ||
Common stock, $0.01 par value; 200,000,000 shares authorized; 20,678,280 shares issued and outstanding at March 31, 2021; and 17,047,584 issued and outstanding at December 31, 2020 | 207 | 170 |
Additional paid-in capital | 165,835 | 121,729 |
Accumulated deficit | (122,060) | (119,522) |
Total stockholders' equity | 43,982 | 2,377 |
Total liabilities and stockholders' equity | $ 74,263 | $ 29,518 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized | 25,000,000 | 25,000,000 |
Preferred stock, issued | ||
Preferred stock, outstanding | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized | 200,000,000 | 200,000,000 |
Common stock, issued | 20,678,280 | 17,047,584 |
Common stock, outstanding | 20,678,280 | 17,047,584 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues: | ||
Total revenues | $ 4,030 | $ 3,116 |
Cost of revenues | 1,416 | 932 |
Research and development costs | 1,563 | 818 |
Sales and marketing expenses | 1,575 | 1,299 |
General and administrative expenses | 1,657 | 1,276 |
Operating loss | (2,181) | (1,209) |
Other expense: | ||
Other expense, net | (25) | (4) |
Interest expense, net | (332) | (842) |
Net loss | $ (2,538) | $ (2,055) |
Net loss per share attributable to common stockholders: | ||
Basic and diluted | $ (0.13) | $ (0.13) |
Weighted average shares outstanding: | ||
Basic and diluted | 18,852,828 | 15,438,276 |
Product Revenue | ||
Revenues: | ||
Total revenues | $ 3,162 | $ 2,179 |
Service and Other Revenue | ||
Revenues: | ||
Total revenues | $ 868 | $ 937 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands | Common Stock | Additional Paid-In Capital | Accumulated Deficit | Total |
Balances at beginning at Dec. 31, 2019 | $ 152 | $ 117,174 | $ (112,740) | $ 4,586 |
Balances at beginning (in shares) at Dec. 31, 2019 | 15,235,308 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Share-based compensation | 228 | 228 | ||
Share-based compensation (in shares) | 9,696 | |||
Warrant exercises (cashless) | $ 3 | (3) | ||
Warrant exercises (cashless) (in shares) | 262,145 | |||
Net loss for the period | (2,055) | (2,055) | ||
Balances at ending at Mar. 31, 2020 | $ 155 | 117,399 | (114,795) | 2,759 |
Balance at ending (in shares) at Mar. 31, 2020 | 15,507,149 | |||
Balances at beginning at Dec. 31, 2020 | $ 170 | 121,729 | (119,522) | 2,377 |
Balances at beginning (in shares) at Dec. 31, 2020 | 17,047,584 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Adoption of ASU 2020-06 | (3,107) | (3,107) | ||
Public offering of common stock | $ 21 | 46,764 | (46,785) | |
Public offering of common stock (in shares) | 2,127,660 | |||
Share-based compensation | $ 1 | 319 | 320 | |
Share-based compensation (in shares) | 20,709 | |||
Warrant and option exercises (cash and cashless) | $ 15 | 130 | 145 | |
Warrant and option exercises (cash and cashless) (in shares) | 1,482,327 | |||
Net loss for the period | (2,538) | (2,538) | ||
Balances at ending at Mar. 31, 2021 | $ 207 | $ 165,835 | $ (122,060) | $ 43,982 |
Balance at ending (in shares) at Mar. 31, 2021 | 20,678,280 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (2,538) | $ (2,055) |
Adjustments to reconcile net loss to net cash flows from operating activities: | ||
Depreciation and amortization | 15 | 58 |
Share-based compensation | 320 | 228 |
Payment-in-kind interest | 94 | |
Amortization of debt issuance costs and original issue discounts | 35 | 787 |
Amortization of lease right of use, net of accretion in lease liabilities | 133 | 25 |
Increase (decrease) in cash resulting from changes in: | ||
Accounts receivable | (123) | 105 |
Inventory, net | 47 | (365) |
Prepaid expenses and other current assets | (10) | 169 |
Other assets | 3 | 70 |
Accounts payable and accrued expenses | (54) | (161) |
Accrued interest | (960) | |
Lease liabilities | (94) | (23) |
Deferred revenue | 41 | (209) |
Net cash flows from operating activities | (2,131) | (2,331) |
Cash flows from investing activities: | ||
Purchases of property and equipment | (40) | |
Acquisition of licensing rights | (441) | |
Net cash flows from investing activities | (40) | (441) |
Cash flows from financing activities: | ||
Proceeds from issuance of 2020 senior secured convertible notes, net of financing costs and discount | 16,890 | |
Proceeds from public offering of common stock, net of offering costs | 46,785 | |
Proceeds from stock option and warrant exercises | 145 | |
Repayment of notes payable | (2,838) | |
Net cash flows from financing activities | 46,930 | 14,052 |
Net change in cash and cash equivalents | 44,759 | 11,280 |
Cash and cash equivalents, beginning of period | 20,099 | 5,696 |
Cash and cash equivalents, end of period | 64,858 | 16,976 |
Cash paid for: | ||
Income taxes | ||
Interest | 214 | 1,043 |
Non-Cash Transactions | ||
Aggregate net book value of reusable components transferred from loaned systems to inventory | 60 | 30 |
Financing costs | $ 100 | |
Reduction of additional paid-in capital | $ (3,107) |
Description of the Business and
Description of the Business and Financial Condition | 3 Months Ended |
Mar. 31, 2021 | |
Description Of Business And Liquidity | |
Description of the Business and Financial Condition | 1. Description of the Business and Financial Condition ClearPoint Neuro, Inc. (the “Company”) is a medical device company focused on the development and commercialization of technology that enables physicians to see inside the brain using direct, intra-procedural magnetic resonance imaging (“MRI”) guidance while performing minimally invasive surgical procedures. The Company’s ClearPoint ® COVID-19 On March 11, 2020, the World Health Organization characterized the spread of a novel strain of coronavirus (“COVID-19”) as a global pandemic, and on March 13, 2020, the President of the United States proclaimed that the COVID-19 outbreak in the United States constituted a national emergency. Continued widespread infection in the United States is a possibility. Extraordinary actions have been taken by federal, state and local governmental authorities to combat the spread of COVID-19, including issuance of “stay-at-home” directives and similar mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. These measures, while intended to protect human life, have led to reduced economic activity, including the postponement or cancellation of elective surgical procedures, which historically have represented approximately 80% of the number of surgical procedures using the Company’s ClearPoint system. Furthermore, the recessionary conditions on the global economy caused by the COVID-19 pandemic could have a material adverse effect on the Company’s business, as hospitals postpone or reduce capital purchases and overall spending. Although most segments of the United States economy have reopened, the effects of the COVID-19 pandemic remain intense in many areas of the country, and many public health experts continue to warn of the potential for future surges of COVID-19. Accordingly, reinstatement of directives and mandates requiring businesses to again curtail or cease normal operations, including the postponement or cancellation of elective surgeries, remains a possibility. The continuing uncertainty as to whether the federal government will address the resulting fiscal condition in both the near term and long term with measures such as additional fiscal stimulus, as well as other geopolitical issues relating to the global economic slowdown, has increased domestic and global instability. The rapid development and fluidity of the situation preclude any prediction as to the ultimate impact COVID-19 will have on the Company’s business, financial condition, results of operation and cash flows, which will depend largely on future developments directly or indirectly relating to the duration and scope of the COVID-19 outbreak in the United States. Liquidity The Company has incurred net losses since its inception, which has resulted in a cumulative deficit at March 31, 2021 of $122 million. In addition, the Company’s use of cash from operations amounted to $2.1 million for the three months ended March 31, 2021 and $7.8 million for the year ended December 31, 2020. Since its inception, the Company has financed its operations principally from the sale of equity securities, the issuance of notes payable, product and service contracts and license arrangements. In January 2020, the Company entered into a Securities Purchase Agreement (the “SPA”) with two investors (the “2020 Convertible Noteholders”) under which the Company issued an aggregate principal amount of $17.5 million of floating rate secured convertible notes (the “First Closing Notes”), resulting in proceeds, net of financing costs, and a commitment fee paid to one of the 2020 Convertible Noteholders, of approximately $16.8 million. From the net proceeds received from the issuance of the First Closing Notes, which have a five-year term, the Company repaid and retired the 2010 Junior Secured Notes Payable (the “2010 Secured Notes”) that otherwise would have matured in October and November 2020. The SPA also gave the Company the right, but not the obligation, to request one of the 2020 Noteholders to purchase an additional $5.0 million in principal amount of a note (the “Second Closing Note”, and, together with the First Closing Note, the “2020 Secured Notes”). On December 29, 2020, under the terms of an amendment to the SPA which, among other provisions, increased the principal amount of the Second Closing Note, the Company issued the Second Closing Note to the 2020 Convertible Noteholder in the principal amount of $7.5 million. In April 2020, the Company received $0.9 million in proceeds through a loan funded under the Payroll Protection Program as part of the CARES Act (the “PPP Loan”). In November 2020, the Company was notified by the U.S. Small Business Administration that the loan had been forgiven under the provision of the CARES Act. See Note 5 for additional information with respect to the 2020 Secured Notes and the PPP Loan. As discussed in Note 7, on February 23, 2021, the Company completed a public offering of 2,127,660 shares of its common stock. Net proceeds from the offering were approximately $46.8 million after deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company. Based on the foregoing, in management’s opinion, cash and cash equivalent balances at March 31, 2021, are sufficient to support the Company’s operations and meet its obligations for at least the next twelve months. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | 2. Basis of Presentation and Summary of Significant Accounting Policies Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2020 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with SEC rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2020 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three months ended March 31, 2021 may not be indicative of the results to be expected for the entire year or any future periods. Inventory Inventory is carried at the lower of cost (first-in, first-out method) or net realizable value. Items in inventory relate predominantly to the Company’s ClearPoint system. Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying condensed consolidated balance sheets. All other software license inventory is classified as a non-current asset. The Company periodically reviews its inventory for obsolete items and provides a reserve upon identification of potential obsolete items. Intangible Assets The Company is a party to certain license agreements that provide rights to the Company for the development and commercialization of products in the functional neurosurgery field. Under the terms of those license agreements, the Company made payments to the licensors upon execution of the license agreements for access to the underlying technologies and will make future payments based on the achievement of regulatory and commercialization milestones as defined in the license agreements. In conformity with Accounting Standards Codification Section 350, “Intangibles – Goodwill and Other,” the Company amortizes its investment in the license rights described above over an expected useful life of five years. In addition, the Company periodically evaluates the recoverability of its investment in the license rights and records an impairment charge in the event such evaluation indicates that the Company’s investment is not likely of being recovered. Revenue Recognition The Company’s revenue is comprised primarily of: (1) product revenue resulting from the sale of functional neurosurgery, navigation, therapy, and biologics and drug delivery disposable products; (2) product revenue resulting from the sale of ClearPoint capital equipment and software; (3) revenue resulting from the service, installation, training and shipping related to ClearPoint capital equipment and software; and (4) clinical case support revenue in connection with customer-sponsored clinical trials. The Company recognizes revenue when control of the Company’s products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services, in a process that involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. When a contract calls for the satisfaction of multiple performance obligations for a single contract price, the Company allocates the contract price among the performance obligations based on the relative stand-alone prices for each such performance obligation customarily charged by the Company. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Lines of Business; Timing of Revenue Recognition · Functional neurosurgery navigation product, biologics and drug delivery systems product, and therapy product sales: · Capital equipment and software sales o Capital equipment and software sales preceded by evaluation periods: o Capital equipment and software sales not preceded by evaluation periods: For both types of capital equipment and software sales described above, the Company’s determination of the point in time at which to recognize revenue represents that point at which the customer has legal title, physical possession, and the risks and rewards of ownership, and the Company has a present right to payment. · Therapy services: · Biologics and drug delivery services-Outsourced technical clinical support of cases performed pursuant to customer-sponsored clinical trials: o Service Access Fees: o Procedure-Based Fees · Capital equipment-related services: o Equipment service: o Installation, training and shipping: The Company operates in one industry segment, and substantially all its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company provides a one-year warranty on its functional neurosurgery navigation products, biologics and drug delivery products, and capital equipment and software products that are not otherwise covered by a third-party manufacturer’s warranty. The Company’s contracts with customers do not provide for a right of return other than for product defects. See Note 3 for additional information regarding revenue recognition. Net Loss Per Share The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share are the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the entire amount of the Company’s outstanding common stock options and warrants, as described in Note 7, and the potential conversion of the 2020 Secured Notes and the Second Closing Note, as described in Note 5, would be anti-dilutive. Concentration Risks and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company holds substantially all its cash and cash equivalents on deposit with financial institutions in the U.S. insured by the Federal Deposit Insurance Corporation. At March 31, 2021, the Company had approximately $60 million in bank balances that were in excess of the insured limits. One customer accounted for 14% of accounts receivable at March 31, 2021, and one customer accounted for 11% of accounts receivable at December 31, 2020. One customer, a related party as discussed in Note 3, accounted for 17% and 28% of total sales in the three-month periods ended March 31, 2021 and 2020, respectively. Prior to granting credit, the Company performs credit evaluations of its customers’ financial condition, and generally does not require collateral from its customers. The Company will provide an allowance for doubtful accounts when collections become doubtful. The allowance for doubtful accounts at each of March 31, 2021 and December 31, 2020 was $0.06 million. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. Adoption of New Accounting Standard Effective January 1, 2021, the Company adopted, on a modified retrospective method of transition, the provisions of Accounting Standards Update No. 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (the “ASU”). The ASU is effective for public companies, other than smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, and for smaller reporting companies, which is the Company’s current classification, for fiscal years beginning after December 31, 2023. However, the ASU permits early adoption no earlier than for fiscal years beginning after December 31, 2020, and the Company elected such early adoption. The ASU amends prior authoritative literature to reduce the number of accounting models for, among others, convertible debt instruments for which the embedded conversion features of such instruments had previously been required to be separated from the host contract. The Company determined that the conversion feature embedded in the Second Closing Note (see Note 5) was within the scope of the ASU. Accordingly, the discount originally recorded in connection with the issuance of the Second Closing Note and a corresponding amount recorded in additional paid-in capital, each in the amount of approximately $3.1 million at the date of issuance of the Second Closing Note, were reversed as of the date of adoption of the ASU. Reclassifications The accompanying consolidated statement of operations for the three months ended March 31, 2021 contains: (a) certain items formerly classified as service revenue that that have been reclassified to product revenue; (b) certain items formerly classified as general and administrative expenses, research and development expenses, and sales and marketing expenses that have been reclassified to cost of revenue; and (c) an item formerly classified as interest expense that has been reclassified as other expense. The accompanying condensed consolidated statement of operations for the three months ended March 31, 2020 has been conformed to the 2021 presentation. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | 3. Revenue Recognition Revenue by Service Line Three Months Ended March 31, (in thousands) 2021 2020 Functional neurosurgery navigation and therapy Disposable products $ 1,917 $ 1,742 Biologics and drug delivery Disposable products 914 173 Services 746 856 Subtotal – biologics and drug delivery revenue 1,660 1,029 Capital equipment and software Systems and software products 331 264 Services 122 81 Subtotal – capital equipment and software revenue 453 345 Total revenue $ 4,030 $ 3,116 Contract Balances · Contract assets · Contract liabilities – During the three months ended March 31, 2021, the Company recognized capital equipment and software-related service revenue of approximately $0.1 million, which was previously included in deferred revenue in the accompanying condensed consolidated balance sheet at December 31, 2020. In 2019, the Company entered into a Development Services Agreement with a customer under which the Company was entitled to bill the customer for an upfront payment of $0.13 million, of which approximately $0.06 million is included in deferred revenue in each of the accompanying March 31, 2021 and December 31, 2020 condensed consolidated balance sheets. Commencing in 2019, the Company was a party to a Letter of Intent and a related Statement of Work (together with the Letter of Intent, the “Project Documents”) with a customer who is a stockholder and a noteholder (see Note 5), and an officer of whom is a member of the Company’s Board of Directors, to commence a product development project. Under the terms of the Project Documents, the Company was entitled to bill the customer for: (a) an upfront, nonrefundable payment of $0.5 million which was received in 2019; and (b) quarterly service fees of $0.5 million. In February 2020, the Company entered into a Supply Agreement and a Statement of Work (the “European SOW”) with a European affiliate of the customer. Under the terms of the European SOW, the Company was entitled to bill the customer on a quarterly basis, commencing in the first quarter of 2020, for service fees of $0.25 million. During 2020, the clinical trials contemplated by the Project Documents and the European SOW were delayed as a result of the COVID-19 pandemic. As a result, the Company agreed to reduce such quarterly service fees by an aggregate of $0.25 million through September 30, 2020. In November 2020, the Company entered into an addendum to the Project Documents and the European SOW that, among other provisions, set the customer’s aggregate at $0.7 million per quarter, effective October 1, 2020. The Company recognized as revenue the upfront payment described in this paragraph ratably over the initial two years of the term of the Project Documents, corresponding to the estimated period in which the related performance obligations were expected to be satisfied, and recognizes as revenue the quarterly service fees described in this paragraph as stand-by services beginning in the quarter such services commenced. Based on the foregoing: (a) the Company recognized revenue of approximately $0.7 million for each of the three months ended March 31, 2021 and 2020; (b) there was no accounts receivable balance from the customer at March 31, 2021; accounts receivable from the customer at December 31, 2020 amounted to approximately $0.1 million; and (c) approximately $0.07 million and $0.1 million of the aggregate amount of all the payments described in this paragraph were included in deferred revenue in the accompanying condensed consolidated balance sheets at March 31, 2021 and December 31, 2020, respectively. The Company offers an upgraded version of its software at no additional charge to customers purchasing a three-year systems service agreement. The transaction prices of the software and the service agreement are determined through an allocation of the service agreement price based on the standalone prices of the software and the service agreements customarily charged by the Company. The transaction price of the software is recognized as revenue upon its installation and comprised approximately $0.1 million of unbilled accounts receivable at each of March 31, 2021 and December 31, 2020. Remaining Performance Obligations The Company’s contracts with customers, other than capital equipment and software-related service agreements discussed below, are predominantly of terms less than one year. Accordingly, the transaction prices of remaining performance obligations related to such contracts at March 31, 2021 are not material. Revenue with respect to remaining performance obligations related to capital equipment and software-related service agreements with original terms in excess of one year and the upfront payments discussed under the heading “Contract Balances” above amounted to approximately $0.6 million at March 31, 2021. The Company expects to recognize this revenue within the next three years. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | 4. Inventory Inventory consists of the following as of: (in thousands) March 31, December 31, Raw materials and work in process $ 1,630 $ 1,485 Software licenses 175 193 Finished goods 1,461 1,560 Inventory, net, included in current assets 3,266 3,238 Software licenses – non-current 589 589 Total $ 3,855 $ 3,827 |
Notes Payable
Notes Payable | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Notes Payable | 5. Notes Payable On January 29, 2020 (the “Closing Date”), the Company completed a financing transaction (the “2020 Financing Transaction”) with the 2020 Convertible Noteholders, whereby the Company issued an aggregate principal amount of $17,500,000 of the First Closing Notes pursuant to the SPA dated January 11, 2020. Unless earlier converted or redeemed, the First Closing Notes will mature on the fifth anniversary of the Closing Date, and bear interest at a rate equal to the sum of (i) the greater of (a) the three (3)-month London Interbank Offered Rate (“LIBOR”) and (b) two percent (2%), plus (ii) a margin of 2% on the outstanding balance of the First Closing Notes, payable quarterly on the first business day of each calendar quarter. The First Closing Notes may be converted at a price of $6.00 per share, subject to certain adjustments set forth in the SPA, and may not be pre-paid without the consent of the noteholder, provided that the Company must offer to pre-pay such other noteholder on the same terms and conditions. At the Closing Date, the SPA gave the Company the right, but not the obligation, to request at any time on or prior to January 11, 2022, that one of the 2020 Convertible Noteholders purchase an additional $5.0 million in aggregate principal amount of Second Closing Note and an additional $10.0 million in aggregate principal amount of Third Closing Note (as defined in the SPA; together, with the Second Closing Note, the “Additional Convertible Notes”), provided that such 2020 Convertible Noteholder has the right, but not the obligation, to purchase such notes. The Additional Convertible Notes would also mature on the fifth anniversary of the Closing Date. On December 29, 2020, the Company and the 2020 Convertible Noteholders entered into an amendment to the SPA (the “Amendment”), the terms of which, among other provisions, provided for: (a) an increase in the principal amount of the Second Closing Note to $7.5 million; (b) a revision of the interest rate to be borne by the Second Closing Note to consist of: (i) cash interest of 2% per annum, payable quarterly; and (ii) payment-in-kind interest of 5% per annum, accruable quarterly as an addition to the unpaid principal balance of the Second Closing Note; and (c) an increase in the conversion price of the Second Closing Notes to $10.14 per share, subject to certain adjustments set forth in the SPA. Upon execution of the Amendment, the Company issued the Second Closing Note. The aggregate carrying amount of the First Closing Notes in the accompanying March 31, 2021 and December 31, 2020 condensed consolidated balance sheets is presented net of: (a) financing costs, comprised of commissions and legal expenses, having an unamortized balance of $0.3 million and $0.4 million at those respective dates; and (b) a discount, comprised of a commitment fee paid to one of the 2020 Convertible Noteholders, having an unamortized balance amounting to $0.2 million at each of those respective dates. The unamortized balance of the financing costs and the discount are charged to interest expense over the term of the First Closing Notes under the effective interest method. The carrying amount of the Second Closing Note in the accompanying December 31, 2020 consolidated balance sheet is presented net of a discount, amounting to approximately $3.1 million at December 31, 2020, and representing the value of the deemed beneficial conversion feature embedded in the Second Closing Note. A beneficial conversion feature is deemed to be beneficial when the conversion price, discussed above, is lower than the closing price per share of the Company’s common stock, which was $14.34 on the date of issuance of the Second Closing Note. Under GAAP in existence at the date of issuance of the Second Closing Note, the resulting discount was calculated as the product of (i) the number of shares into which the Second Closing Note could be converted, multiplied by (ii) the difference between the closing price per share and the conversion price. Upon recordation of the discount, a corresponding amount was added to additional paid-in capital. As discussed in Note 2, effective January 1, 2021, the Company adopted the provisions of the ASU that no longer required such beneficial conversion features to be separately accounted for as previously described in this paragraph. As a result, the accompanying March 31, 2021 condensed consolidated balance sheet reflects the elimination of both the discount and the corresponding increase to additional paid-in capital previously described in this paragraph. Under the terms of the SPA, as amended, the Company retains the right, but not the obligation, to request the 2020 Convertible Noteholder to purchase the Third Closing Note, and the 2020 Convertible Noteholder has the right, but not the obligation, to purchase such note. As of March 31, 2021, the Company had not made such a request. The 2020 Secured Notes are secured by all the assets of the Company. An executive officer of one of the 2020 Convertible Noteholders is a member of the Company’s Board of Directors, and, pursuant to the terms of the SPA and a Board Observer Agreement entered into by the other 2020 Convertible Noteholder and the Company, the other 2020 Convertible Noteholder appointed a representative to attend and observe meetings of the Company’s Board of Directors. On February 25, 2021, such 2020 Convertible Noteholder terminated the Board Observer Agreement, thus precluding its representative from attending future meetings of the Company’s Board of Directors. On January 27, 2020, as a condition to completion of the 2020 Financing Transaction, the Company entered into the Fourth Omnibus Amendment to notes the 2010 Secured Notes, whereby the 2010 Secured Notes were subordinated to the Company’s obligations under the terms of the 2020 Secured Notes and the Additional Convertible Notes, as applicable. During the three months ended March 31, 2020, the Company repaid in full the aggregate outstanding principal amount of the 2010 Secured Notes, amounting to approximately $2.8 million, which, along with the Company’s payment of accrued interest amounting to approximately $0.9 million, resulted in the full retirement of the 2010 Secured Notes. Scheduled Notes Payable Maturities Scheduled principal payments as of March 31, 2021 with respect to notes payable are summarized as follows: Years ending December 31, (in thousands) 2025 $ 25,097 Total scheduled principal payments 25,097 Less: Unamortized financing costs and discount (582 ) Total $ 24,515 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2021 | |
Leases [Abstract] | |
Leases | 6. Leases The Company leases office space in Irvine, California that houses office space and manufacturing facility under a non-cancellable operating lease. The lease term commenced on October 1, 2018 and expires in September 2023. The Company has the option to renew the lease for two additional periods of five years each. The Company also leases office space in Solana Beach, California that houses certain management, and research and development personnel, and now serves as its corporate headquarters. The lease term commenced on December 15, 2020, is set to expire on December 31, 2026, and is renewable for an additional five-year period, at the Company’s option, provided that the Company’s landlord has entered into an extension of its lease for the office space that encompasses the Company’s office space for at least five years. Both office leases are classified as operating leases in conformity with GAAP. The lease cost, included in general and administrative expense, was $0.1 million and $0.03 million for the three months ended March 31, 2021 and 2020, respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' equity: | |
Stockholders' Equity | 7. Stockholders’ Equity 2021 Public Offering On February 23, 2021, the Company completed a public offering of 2,127,660 shares of its common stock, composed of 1,850,140 shares of common stock initially offered at a public offering price of $23.50 per share and an additional 277,520 shares of common stock sold pursuant to the exercise of the underwriters’ option to purchase additional shares at the price of $22.09 per share. Net proceeds from the offering totaled approximately $46.8 million after deducting underwriting discounts and commissions, and other offering expenses paid by the Company. The underwriting agreement contains representations, warranties, agreements and indemnification obligations by the Company that are customary for this type of transaction. Issuance of Common Stock in Lieu of Cash Payments Under the terms of the Amended and Restated Non-Employee Director Compensation Plan, each compensated non-employee member of the Company’s Board of Directors may elect to receive all or part of his or her director fees in shares of the Company’s common stock. Director fees, whether paid in cash or in shares of common stock, are payable quarterly on the last day of each fiscal quarter. The number of shares of common stock issued to directors is determined by dividing the product of: (i)(a) the fees otherwise payable to each director in cash, times (b) the percentage of fees the director elected to receive in shares of common stock, by (ii) the volume weighted average price per share of common stock over the last five trading days of the quarter. During the three months ended March 31, 2021 and 2020, 2,009 shares and 9,731 shares, respectively, were issued to directors as payment for director fees amounting to $0.04 million in each of the three-month periods ended March 31, 2021 and 2020. Stock Incentive Plans The Company has various share-based compensation plans and share-based compensatory contracts (collectively, the “Plans”) under which it has granted share-based awards, such as stock grants, and incentive and non-qualified stock options, to employees, directors, consultants and advisors. Awards may be subject to a vesting schedule as set forth in individual award agreements. Certain of the Plans also have provided for cash-based performance bonus awards. From October 2017 until June 2020, the Company granted share-based awards under the Company’s Second Amended and Restated 2013 Incentive Compensation Plan (the “Second Amended Plan”). On June 2, 2020, the Company’s stockholders approved the Company’s Third Amended and Restated 2013 Incentive Compensation Plan (the “Third Amended Plan” and, together with the Second Amended Plan, the “2013 Plan”), under which 1.0 million shares of the Company’s common stock were made available for future issuances under the 2013 Plan, resulting in a total of 2,956,250 shares of the Company’s common stock being reserved for issuance under the 2013 Plan. Of this amount, stock grants of 681,192 shares have been awarded and option grants, net of options terminated, expired or forfeited, of 1,269,947 shares were outstanding as of March 31, 2021. Accordingly, 1,005,111 shares remained available for grants under the 2013 Plan as of that date. Stock option activity under all of the Company’s Plans during the three months ended March 31, 2021 is summarized below: Shares Weighted- Intrinsic (1) (in thousands) Outstanding at January 1, 2021 1,806,092 $ 7.12 $ 20,760 Exercised (416,900 ) 2.60 Outstanding at March 31, 2021 1,389,192 $ 8.46 $ 21,516 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. As of March 31, 2021, there was unrecognized compensation expense of approximately $1.8 million related to outstanding stock options and shares of restricted stock, which is expected to be recognized over a weighted average period of 2.16 years. Warrants Warrants have generally been issued in connection with financing transactions and for terms of up to five years. Common stock warrant activity for the three months ended March 31, 2021 was as follows: Shares Weighted- Intrinsic (1) (in thousands) Outstanding at January 1, 2021 3,082,987 $ 3.82 $ 37,379 Exercised (1,150,647 ) 2.31 Outstanding at March 31, 2021 1,932,340 $ 4.72 $ 31,778 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates In the opinion of management, the accompanying unaudited condensed consolidated financial statements have been prepared on a basis consistent with the Company’s December 31, 2020 audited consolidated financial statements, and include all adjustments, consisting of only normal recurring adjustments, necessary to fairly state the information set forth therein. These condensed consolidated financial statements have been prepared in accordance with SEC rules for interim financial information, and, therefore, omit certain information and footnote disclosures necessary to present such statements in accordance with generally accepted accounting principles in the U.S. (“GAAP”). The preparation of these condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses and the related disclosures at the date of the financial statements and during the reporting period. Actual results could materially differ from these estimates. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s 2020 Form 10-K. The accompanying condensed consolidated balance sheet as of December 31, 2020 has been derived from the audited consolidated financial statements at that date but does not include all information and footnotes required by GAAP for a complete set of financial statements. The results of operations for the three months ended March 31, 2021 may not be indicative of the results to be expected for the entire year or any future periods. |
Inventory | Inventory Inventory is carried at the lower of cost (first-in, first-out method) or net realizable value. Items in inventory relate predominantly to the Company’s ClearPoint system. Software license inventory related to ClearPoint systems undergoing on-site customer evaluation is included in inventory in the accompanying condensed consolidated balance sheets. All other software license inventory is classified as a non-current asset. The Company periodically reviews its inventory for obsolete items and provides a reserve upon identification of potential obsolete items. |
Intangible Assets | Intangible Assets The Company is a party to certain license agreements that provide rights to the Company for the development and commercialization of products in the functional neurosurgery field. Under the terms of those license agreements, the Company made payments to the licensors upon execution of the license agreements for access to the underlying technologies and will make future payments based on the achievement of regulatory and commercialization milestones as defined in the license agreements. In conformity with Accounting Standards Codification Section 350, “Intangibles – Goodwill and Other,” the Company amortizes its investment in the license rights described above over an expected useful life of five years. In addition, the Company periodically evaluates the recoverability of its investment in the license rights and records an impairment charge in the event such evaluation indicates that the Company’s investment is not likely of being recovered. |
Revenue Recognition | Revenue Recognition The Company’s revenue is comprised primarily of: (1) product revenue resulting from the sale of functional neurosurgery, navigation, therapy, and biologics and drug delivery disposable products; (2) product revenue resulting from the sale of ClearPoint capital equipment and software; (3) revenue resulting from the service, installation, training and shipping related to ClearPoint capital equipment and software; and (4) clinical case support revenue in connection with customer-sponsored clinical trials. The Company recognizes revenue when control of the Company’s products and services is transferred to its customers in an amount that reflects the consideration the Company expects to receive from its customers in exchange for those products and services, in a process that involves identifying the contract with a customer, determining the performance obligations in the contract, determining the contract price, allocating the contract price to the distinct performance obligations in the contract, and recognizing revenue when the performance obligations have been satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. When a contract calls for the satisfaction of multiple performance obligations for a single contract price, the Company allocates the contract price among the performance obligations based on the relative stand-alone prices for each such performance obligation customarily charged by the Company. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Lines of Business; Timing of Revenue Recognition · Functional neurosurgery navigation product, biologics and drug delivery systems product, and therapy product sales: · Capital equipment and software sales o Capital equipment and software sales preceded by evaluation periods: o Capital equipment and software sales not preceded by evaluation periods: For both types of capital equipment and software sales described above, the Company’s determination of the point in time at which to recognize revenue represents that point at which the customer has legal title, physical possession, and the risks and rewards of ownership, and the Company has a present right to payment. · Therapy services: · Biologics and drug delivery services-Outsourced technical clinical support of cases performed pursuant to customer-sponsored clinical trials: o Service Access Fees: o Procedure-Based Fees · Capital equipment-related services: o Equipment service: o Installation, training and shipping: The Company operates in one industry segment, and substantially all its sales are to U.S.-based customers. Payment terms under contracts with customers generally are in a range of 30-60 days after the customers’ receipt of the Company’s invoices. The Company provides a one-year warranty on its functional neurosurgery navigation products, biologics and drug delivery products, and capital equipment and software products that are not otherwise covered by a third-party manufacturer’s warranty. The Company’s contracts with customers do not provide for a right of return other than for product defects. See Note 3 for additional information regarding revenue recognition. |
Net Loss Per Share | Net Loss Per Share The Company computes net loss per share using the weighted-average number of common shares outstanding during the period. Basic and diluted net loss per share are the same because the conversion, exercise or issuance of all potential common stock equivalents, which comprise the entire amount of the Company’s outstanding common stock options and warrants, as described in Note 7, and the potential conversion of the 2020 Secured Notes and the Second Closing Note, as described in Note 5, would be anti-dilutive. |
Concentration Risks and Other Risks and Uncertainties | Concentration Risks and Other Risks and Uncertainties Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. The Company holds substantially all its cash and cash equivalents on deposit with financial institutions in the U.S. insured by the Federal Deposit Insurance Corporation. At March 31, 2021, the Company had approximately $60 million in bank balances that were in excess of the insured limits. One customer accounted for 14% of accounts receivable at March 31, 2021, and one customer accounted for 11% of accounts receivable at December 31, 2020. One customer, a related party as discussed in Note 3, accounted for 17% and 28% of total sales in the three-month periods ended March 31, 2021 and 2020, respectively. Prior to granting credit, the Company performs credit evaluations of its customers’ financial condition, and generally does not require collateral from its customers. The Company will provide an allowance for doubtful accounts when collections become doubtful. The allowance for doubtful accounts at each of March 31, 2021 and December 31, 2020 was $0.06 million. The Company is subject to risks common to emerging companies in the medical device industry, including, but not limited to: new technological innovations; acceptance and competitiveness of its products; dependence on key personnel; dependence on key suppliers; changes in general economic conditions and interest rates; protection of proprietary technology; compliance with changing government regulations; uncertainty of widespread market acceptance of products; access to credit for capital purchases by customers; and product liability claims. Certain components used in manufacturing have relatively few alternative sources of supply and establishing additional or replacement suppliers for such components cannot be accomplished quickly. The inability of any of these suppliers to fulfill the Company’s supply requirements may negatively impact future operating results. |
Adoption of New Accounting Standard | Adoption of New Accounting Standard Effective January 1, 2021, the Company adopted, on a modified retrospective method of transition, the provisions of Accounting Standards Update No. 2020-06, “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40) – Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (the “ASU”). The ASU is effective for public companies, other than smaller reporting companies as defined by the SEC, for fiscal years beginning after December 15, 2021, and for smaller reporting companies, which is the Company’s current classification, for fiscal years beginning after December 31, 2023. However, the ASU permits early adoption no earlier than for fiscal years beginning after December 31, 2020, and the Company elected such early adoption. The ASU amends prior authoritative literature to reduce the number of accounting models for, among others, convertible debt instruments for which the embedded conversion features of such instruments had previously been required to be separated from the host contract. The Company determined that the conversion feature embedded in the Second Closing Note (see Note 5) was within the scope of the ASU. Accordingly, the discount originally recorded in connection with the issuance of the Second Closing Note and a corresponding amount recorded in additional paid-in capital, each in the amount of approximately $3.1 million at the date of issuance of the Second Closing Note, were reversed as of the date of adoption of the ASU. Reclassifications The accompanying consolidated statement of operations for the three months ended March 31, 2021 contains: (a) certain items formerly classified as service revenue that that have been reclassified to product revenue; (b) certain items formerly classified as general and administrative expenses, research and development expenses, and sales and marketing expenses that have been reclassified to cost of revenue; and (c) an item formerly classified as interest expense that has been reclassified as other expense. The accompanying condensed consolidated statement of operations for the three months ended March 31, 2020 has been conformed to the 2021 presentation. |
Reclassifications | Reclassifications The accompanying consolidated statement of operations for the three months ended March 31, 2021 contains: (a) certain items formerly classified as service revenue that that have been reclassified to product revenue; (b) certain items formerly classified as general and administrative expenses, research and development expenses, and sales and marketing expenses that have been reclassified to cost of revenue; and (c) an item formerly classified as interest expense that has been reclassified as other expense. The accompanying condensed consolidated statement of operations for the three months ended March 31, 2020 has been conformed to the 2021 presentation. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue Recognition [Abstract] | |
Schedule of revenue recognition | Three Months Ended March 31, (in thousands) 2021 2020 Functional neurosurgery navigation and therapy Disposable products $ 1,917 $ 1,742 Biologics and drug delivery Disposable products 914 173 Services 746 856 Subtotal – biologics and drug delivery revenue 1,660 1,029 Capital equipment and software Systems and software products 331 264 Services 122 81 Subtotal – capital equipment and software revenue 453 345 Total revenue $ 4,030 $ 3,116 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | (in thousands) March 31, December 31, Raw materials and work in process $ 1,630 $ 1,485 Software licenses 175 193 Finished goods 1,461 1,560 Inventory, net, included in current assets 3,266 3,238 Software licenses – non-current 589 589 Total $ 3,855 $ 3,827 |
Notes Payable (Tables)
Notes Payable (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable maturities | Years ending December 31, (in thousands) 2025 $ 25,097 Total scheduled principal payments 25,097 Less: Unamortized financing costs and discount (582 ) Total $ 24,515 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Stockholders' equity: | |
Schedule of Stock Options Issued by the Company | Shares Weighted- Intrinsic (1) (in thousands) Outstanding at January 1, 2021 1,806,092 $ 7.12 $ 20,760 Exercised (416,900 ) 2.60 Outstanding at March 31, 2021 1,389,192 $ 8.46 $ 21,516 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. |
Schedule of Common Stock Warrant Activity | Shares Weighted- Intrinsic (1) (in thousands) Outstanding at January 1, 2021 3,082,987 $ 3.82 $ 37,379 Exercised (1,150,647 ) 2.31 Outstanding at March 31, 2021 1,932,340 $ 4.72 $ 31,778 (1) Intrinsic value is calculated as the estimated fair value of the Company’s stock at the end of the related period less the option exercise price of in-the-money options. |
Description of the Business a_2
Description of the Business and Financial Condition (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Cumulative net loss | $ (122,060) | $ (119,522) | |
Net cash used in operations | $ (2,131) | $ (2,331) | (7,800) |
Sale of stock, number of shares issued | 2,127,660 | ||
Proceeds from issuance of stock | $ 46,800 | ||
Secured convertible notes | $ 24,515 | 21,280 | |
Proceeds from issuance of Paycheck Protection Program loan | 900 | ||
Security Purchase Agreement | The "2020 Convertible Noteholders" | |||
Secured convertible notes | 17,500 | ||
Proceeds from debt, net | $ 16,800 | ||
Term of secured notes | 5 years | ||
Security Purchase Agreement | the "2020 Secured Notes" | |||
Sale of stock, additional information | The SPA gave the Company the right, but not the obligation, to request one of the 2020 Noteholders to purchase an additional $5.0 million in principal amount of a note (the “Second Closing Note”, and, together with the First Closing Note, the “2020 Secured Notes”). | ||
Secured convertible notes | $ 7,500 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Details Narrative) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021USD ($)Number | Mar. 31, 2020 | Dec. 31, 2020USD ($) | |
Bank balances in excess of insured limits, approximate | $ 60,000 | ||
Allowance for doubtful accounts | $ 60 | $ 60 | |
Payment terms under contracts with customers | A range of 30-60 days after the customers' receipt of the Company's invoices. | ||
Operating segments | Number | 1 | ||
Adoption of ASU 2020-06 | $ (3,107) | ||
Accounts Receivable | Customer | |||
Concentration risk, percentage | 14.00% | 11.00% | |
Sales | Customer | |||
Concentration risk, percentage | 17.00% | 28.00% | |
Minimum | |||
Term of service agreements (in years) | 1 year | ||
Maximum | |||
Term of service agreements (in years) | 3 years |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Total revenues | $ 4,030 | $ 3,116 | $ 12,829 |
Functional Neurosurgery Navigation and Therapy - Disposable Products | |||
Total revenues | 1,917 | 1,742 | |
Biologics and Drug Delivery - Disposable Products | |||
Total revenues | 914 | 173 | |
Biologics and Drug Delivery - Services | |||
Total revenues | 746 | 856 | |
Biologics and Drug Delivery Revenue | |||
Total revenues | 1,660 | 1,029 | |
Capital Equipment and Software - Systems and Software Products | |||
Total revenues | 331 | 264 | |
Capital Equipment and Software - Services | |||
Total revenues | 122 | 81 | |
Capital Equipment and Software Revenue | |||
Total revenues | $ 453 | $ 345 |
Revenue Recognition (Details Na
Revenue Recognition (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Total revenues | $ 4,030 | $ 3,116 | $ 12,829 | |
Unbilled accounts receivable, approximate | 100 | 100 | ||
Development Services Agreement | ||||
Upfront payment commitment | $ 130 | |||
Deferred revenue | 60 | 60 | ||
Letter of Intent | Investor | ||||
Total revenues | 700 | $ 700 | 500 | |
Accounts receivable | 100 | |||
Deferred revenue | 70 | 100 | ||
Service fees receivable, quarterly | 700 | 500 | ||
Reduction of service fees receivable | $ 250 | |||
Letter of Intent | Investor | Non-Refundable Payment | ||||
Upfront payment commitment | $ 500 | |||
Capital Equipment-Related Service Revenue | ||||
Total revenues | 100 | |||
Remaining Performance Obligation Related to Capital Equipment and Software-Related Service Agreements | ||||
Total revenues | $ 600 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials and work in process | $ 1,630 | $ 1,485 |
Software licenses | 175 | 193 |
Finished goods | 1,461 | 1,560 |
Inventory included in current assets | 3,266 | 3,238 |
Software licenses - non-current | 589 | 589 |
Total inventory | $ 3,855 | $ 3,827 |
Notes Payable - Schedule of Not
Notes Payable - Schedule of Notes Payable Maturities (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Debt Disclosure [Abstract] | |
2025 | $ 25,097 |
Total scheduled principal payments | 25,097 |
Less: Unamortized financing costs and discount | (582) |
Total | $ 24,515 |
Notes Payable (Details Narrativ
Notes Payable (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | ||
Secured notes | $ 24,515 | $ 21,280 |
2010 Junior Secured Notes Payable | ||
Debt Instrument [Line Items] | ||
Repayment of secured debt | 2,800 | |
Payments for accrued interest | 900 | |
Security Purchase Agreement | The "2020 Convertible Noteholders" | ||
Debt Instrument [Line Items] | ||
Secured notes | $ 17,500 | |
Term of secured notes | 5 years | |
Interest rate terms | Bears interest at a rate equal to the sum of (i) the greater of (a) the three (3)-month London Interbank Offered Rate and (b) two percent (2%), plus (ii) a margin of 2% on the outstanding balance of the First Closing Notes, payable quarterly on the first business day of each calendar quarter. | |
Conversion price, per share | $ 6 | |
Secured convertible notes, terms and conditions | At the Closing Date, the SPA gave the Company the right, but not the obligation, to request, at any time on or prior to January 11, 2022, that one of the 2020 Convertible Noteholders purchase an additional $5,000,000 in aggregate principal amount of the Second Closing Note and an additional $10,000,000 in aggregate principal amount of the Third Closing Note (as defined in the SPA; together, with the Second Closing Note, the “Additional Closing Notes”), provided that such 2020 Convertible Noteholder has the right, but not the obligation, to purchase such notes. The Additional Closing Notes would also mature on the fifth anniversary of the Closing Date. | |
Security Purchase Agreement | The "2020 Convertible Noteholders" Amendment | ||
Debt Instrument [Line Items] | ||
Conversion price, per share | $ 10.14 | |
Secured convertible notes, terms and conditions | The Company and the 2020 Convertible Noteholders entered into an amendment to the SPA (the “Amendment”), the terms of which, among other provisions, provided for: (a) an increase in the principal amount of the Second Closing Note to $7.5 million; (b) a revision of the interest rate to be borne by the Second Closing Note to consist of: (i) cash interest of 2% per annum, payable quarterly; and (ii) payment-in-kind interest of 5% per annum, accruable quarterly as an addition to the unpaid principal balance of the Second Closing Note; and (c) an increase in the conversion price of notes issued under the terms of the SPA, as amended, to $10.14 per share, subject to certain adjustments set forth in the SPA. Upon execution of the Amendment, the Company issued the Second Closing Note. | |
Security Purchase Agreement | First Closing Notes | ||
Debt Instrument [Line Items] | ||
Secured notes | 300 | $ 400 |
Unamortized financing costs | $ 200 | 200 |
Security Purchase Agreement | Second Closing Note | ||
Debt Instrument [Line Items] | ||
Secured notes | $ 3,100 | |
Conversion price, per share | $ 14.34 |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Lease cost (included in general and administrative expense) | $ 100 | $ 30 |
Office Lease - Irvine, California | ||
Commenced date | Oct. 1, 2018 | |
Lease expiration date | Sep. 30, 2023 | |
Lease term | 5 years | |
Lease renewal term | 5 years | |
Office Lease - Solana Beach, California | ||
Commenced date | Dec. 15, 2020 | |
Lease expiration date | Dec. 31, 2026 | |
Lease term | 5 years | |
Lease renewal term | 5 years |
Stockholders' Equity - Schedule
Stockholders' Equity - Schedule of Stock Options Issued by the Company (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)$ / sharesshares | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Outstanding at beginning | shares | 1,806,092 | |
Exercised | shares | (416,900) | |
Outstanding at ending | shares | 1,389,192 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | ||
Outstanding at beginning | $ / shares | $ 7.12 | |
Exercised | $ / shares | 2.60 | |
Outstanding at ending | $ / shares | $ 8.46 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Intrinsic Value [Abstract] | ||
Outstanding at beginning | $ | $ 20,760 | [1] |
Outstanding at ending | $ | $ 21,516 | [1] |
[1] | Intrinsic value is calculated as the estimated fair value of the Company's stock at the end of the related period less the option exercise price of in-the-money options. |
Stockholders' Equity - Schedu_2
Stockholders' Equity - Schedule of Common Stock Warrant Activity (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Outstanding at beginning | shares | 3,082,987 |
Exercised | shares | (1,150,647) |
Outstanding at ending | shares | 1,932,340 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |
Outstanding at beginning | $ / shares | $ 3.82 |
Exercised | $ / shares | 2.31 |
Outstanding at ending | $ / shares | $ 4.72 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Aggregate Intrinsic Value [Abstract] | |
Outstanding at beginning | $ | $ 37,379 |
Outstanding at ending | $ | $ 31,778 |
Stockholders' Equity (Details N
Stockholders' Equity (Details Narrative) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | Jun. 02, 2020 | ||
Number of awards outstanding | 1,389,192 | 1,806,092 | |||
Unrecognized compensation expense | $ 1,800 | ||||
Compensation expense, period for recognition | 2 years 2 months | ||||
Number of shares issued for services | 2,009 | 9,731 | |||
Number of shares issued for services in lieu of cash | $ 40 | $ 40 | |||
Sale of stock, number of shares issued | 2,127,660 | ||||
Proceeds from issuance of stock | $ 46,800 | ||||
Amended and Restated 2013 Incentive Compensation Plan | |||||
Common stock reserved for issuance | 2,956,250 | ||||
Number of share available for grant | 1,005,111 | ||||
Number of awards outstanding | 1,269,947 | ||||
Number of awards granted | 681,192 | ||||
Third Amended and Restated 2013 Incentive Compensation Plan | |||||
Common stock reserved for issuance | 1,000,000 | ||||
Public Offering | |||||
Sale of stock, number of shares issued | [1] | 2,127,660 | |||
Proceeds from issuance of stock | $ 46,800 | ||||
[1] | Composed of 1,850,140 shares of common stock initially offered at a public offering price of $23.50 per share and an additional 277,520 shares of common stock sold pursuant to the exercise of the underwriters' option to purchase additional shares at the price of $22.09 per share. |