Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Mar. 25, 2019 | Jun. 29, 2018 | |
Document And Entity Information [Abstract] | |||
Entity Registrant Name | Alphatec Holdings, Inc. | ||
Entity Central Index Key | 0001350653 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Document Type | 10-K | ||
Trading Symbol | ATEC | ||
Document Period End Date | Dec. 31, 2018 | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | FY | ||
Amendment Flag | false | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Common Stock, Shares Outstanding | 46,847,652 | ||
Entity Public Float | $ 70.2 | ||
Entity Emerging Growth Company | false | ||
Entity Small Business | true | ||
Entity Shell Company | false |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 29,054 | $ 22,466 |
Accounts receivable, net | 15,095 | 14,822 |
Inventories, net | 28,765 | 27,292 |
Prepaid expenses and other current assets | 2,030 | 1,767 |
Withholding tax receivable from officer | 350 | |
Current assets of discontinued operations | 242 | 131 |
Total current assets | 75,536 | 66,478 |
Property and equipment, net | 13,235 | 12,670 |
Goodwill | 13,897 | |
Intangibles, net | 26,408 | 5,248 |
Other assets | 347 | 208 |
Noncurrent assets of discontinued operations | 54 | 56 |
Total assets | 129,477 | 84,660 |
Current liabilities: | ||
Accounts payable | 4,399 | 3,878 |
Accrued expenses | 22,316 | 22,246 |
Current portion of long-term debt | 3,276 | 3,306 |
Current liabilities of discontinued operations | 621 | 312 |
Total current liabilities | 30,612 | 29,742 |
Long-term debt, less current portion | 42,299 | 37,767 |
Other long-term liabilities | 15,389 | 20,206 |
Redeemable preferred stock, $0.0001 par value; 20,000 authorized at December 31, 2018 and 2017; 3,319 shares issued and outstanding at both December 31, 2018 and 2017 | 23,603 | 23,603 |
Commitments and contingencies | ||
Stockholders’ equity (deficit): | ||
Common stock, $0.0001 par value; 200,000 authorized; 43,368 and 19,857 shares issued and outstanding at December 31, 2018 and 2017, respectively | 4 | 2 |
Treasury stock, 2 shares, at cost | (97) | (97) |
Additional paid-in capital | 523,525 | 436,803 |
Shareholder note receivable | (5,000) | (5,000) |
Accumulated other comprehensive income | 1,064 | 1,093 |
Accumulated deficit | (501,922) | (459,459) |
Total stockholders’ equity (deficit) | 17,574 | (26,658) |
Total liabilities and stockholders’ equity (deficit) | 129,477 | 84,660 |
Series A Convertible Preferred Stock | ||
Stockholders’ equity (deficit): | ||
Convertible preferred stock | ||
Series B Convertible Preferred Stock | ||
Stockholders’ equity (deficit): | ||
Convertible preferred stock |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Redeemable preferred stock, par value (dollars per share) | $ 0.0001 | $ 0.0001 |
Redeemable preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Redeemable preferred stock, shares issued | 3,319,000 | 3,319,000 |
Redeemable preferred stock, shares outstanding | 3,319,000 | 3,319,000 |
Common stock, par value (dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 200,000,000 | 200,000,000 |
Common stock, shares issued | 43,368,000 | 19,857,000 |
Common stock, shares outstanding | 43,368,000 | 19,857,000 |
Treasury stock, shares | 2,000 | 2,000 |
Series A Convertible Preferred Stock | ||
Convertible preferred stock, par value (dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 15,000 | 15,000 |
Convertible preferred stock, shares issued | 4,000 | |
Convertible preferred stock, shares outstanding | 4,000 | |
Series B Convertible Preferred Stock | ||
Convertible preferred stock, par value (dollars per share) | $ 0.0001 | $ 0.0001 |
Convertible preferred stock, shares authorized | 45,000 | 0 |
Convertible preferred stock, shares issued | 0 | |
Convertible preferred stock, shares outstanding | 0 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues: | ||
Revenues | $ 91,694 | $ 101,739 |
Cost of revenues | 28,457 | 33,517 |
Gross profit | 63,237 | 68,222 |
Operating expenses: | ||
Research and development | 9,984 | 4,920 |
Sales, general and administrative | 72,509 | 69,959 |
Litigation-related expenses | 5,683 | 308 |
Amortization of intangible assets | 738 | 688 |
Transaction-related expenses | 1,550 | |
Gain on settlement | (6,168) | |
Restructuring expenses | 1,381 | 2,206 |
Gain on sale of assets | (856) | |
Total operating expenses | 85,677 | 77,225 |
Operating loss | (22,440) | (9,003) |
Other income (expense): | ||
Interest and other expense, net | (7,139) | (7,615) |
Loss on debt extinguishment | (590) | |
Gain on change of fair value of warrants | 12,044 | |
Total other income (expense) | (7,729) | 4,429 |
Loss from continuing operations before taxes | (30,169) | (4,574) |
Income tax (benefit) | (1,361) | (34) |
Loss from continuing operations | (28,808) | (4,540) |
Income (loss) from discontinued operations, net of applicable taxes | (167) | 2,246 |
Net loss | (28,975) | (2,294) |
Recognition of beneficial conversion feature - Series B Preferred Stock | (13,488) | |
Net loss attributable to common shareholders | $ (42,463) | $ (2,294) |
(Loss) income per share, basic: | ||
Continuing operations | $ (0.82) | $ (0.36) |
Discontinued operations | 0 | 0.18 |
Net loss per share, basic | (1.20) | (0.18) |
(Loss) income per share, diluted: | ||
Continuing operations | (0.82) | (1.25) |
Discontinued operations | 0 | 0.17 |
Net loss per share, diluted | $ (1.20) | $ (1.08) |
Shares used in calculating basic net loss per share | 35,315 | 12,788 |
Shares used in calculating diluted net loss per share | 35,315 | 13,282 |
United States Product | ||
Revenues: | ||
Revenues | $ 83,656 | $ 86,925 |
International Supply Agreement | ||
Revenues: | ||
Revenues | $ 8,038 | $ 14,814 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss | $ (28,975) | $ (2,294) |
Foreign currency translation adjustments related to continuing operations | (29) | 123 |
Comprehensive loss | $ (29,004) | $ (2,171) |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Total | SafeOp Surgical, Inc. | Series A Convertible Preferred Stock | Common stock | Common stockSafeOp Surgical, Inc. | Additional paid-in capital | Additional paid-in capitalSafeOp Surgical, Inc. | Shareholder note receivable | Treasury stock | Accumulated other comprehensive income (loss) | Accumulated deficit |
Balance beginning, value at Dec. 31, 2016 | $ (41,504) | $ 1 | $ 419,787 | $ (5,000) | $ (97) | $ 970 | $ (457,165) | ||||
Balance beginning, shares at Dec. 31, 2016 | 9,049 | ||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation | 3,902 | 3,902 | |||||||||
Common and preferred stock and warrants issued in private placement, net of offering costs of $1.7 million | 17,118 | $ 1 | 17,117 | ||||||||
Common and preferred stock and warrants issued in private placement, net of offering costs, shares | 15 | 1,810 | |||||||||
Issuance and conversion of preferred stock into common stock, net of offering costs, shares | (10) | 4,964 | |||||||||
Issuance of common stock for employee stock purchase plan | 231 | 231 | |||||||||
Issuance of common stock for employee stock purchase plan, shares | 128 | ||||||||||
Shares issued for acquisition of intangible assets | 473 | 473 | |||||||||
Shares issued for acquisition of intangible assets, shares | 285 | ||||||||||
Common stock issued for vesting of restricted stock awards, net of shares repurchased for tax liability, shares | 183 | ||||||||||
Common stock issued for warrant exercises, net of issuance costs | 3,337 | 3,337 | |||||||||
Common stock issued for warrant exercises, shares | 1,668 | ||||||||||
Warrant derivative liability reclassified to equity due to exercise of warrants | 2,311 | 2,311 | |||||||||
Issuance of common stock and warrants to board members | 4,000 | 4,000 | |||||||||
Issuance of common stock and warrants to board members, shares | 1,770 | ||||||||||
Net change from reclassification of warrants to and from liability | (14,355) | (14,355) | |||||||||
Foreign currency translation adjustments | 123 | 123 | |||||||||
Net loss | (2,294) | (2,294) | |||||||||
Balance ending, value at Dec. 31, 2017 | (26,658) | $ 2 | 436,803 | (5,000) | (97) | 1,093 | (459,459) | ||||
Balance ending, shares at Dec. 31, 2017 | 5 | 19,857 | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||
Stock-based compensation | 5,649 | 5,649 | |||||||||
Issuance of warrants in conjunction with Squadron Term Loan | 1,708 | 1,708 | |||||||||
Issuance and conversion of preferred stock into common stock, net of offering costs | 42,610 | $ 2 | 42,608 | ||||||||
Issuance and conversion of preferred stock into common stock, net of offering costs, shares | (1) | 14,986 | |||||||||
Recognition of beneficial conversion feature - Series B Preferred Stock | 13,488 | (13,488) | |||||||||
Common stock issued for employee stock purchase plan and stock option exercises | 666 | 666 | |||||||||
Common stock issued for employee stock purchase plan and stock option exercises, shares | 258 | ||||||||||
Common stock issued for vesting of restricted stock awards, net of shares repurchased for tax liability, shares | 248 | ||||||||||
Common stock issued for warrant exercises, net of issuance costs | 8,628 | 8,628 | |||||||||
Common stock issued for warrant exercises, shares | 4,311 | ||||||||||
Issuance of common stock and warrants for the acquisition of SafeOp | Milestone 1 | $ 12,529 | $ 12,529 | |||||||||
Issuance of common stock and warrants for the acquisition of SafeOp, shares | Milestone 1 | $ 3,265 | ||||||||||
Issuance of common stock for acquisition of SafeOp -Milestone 1 | Milestone 1 | $ 1,446 | $ 1,446 | |||||||||
Issuance of common stock for acquisition of SafeOp - Milestone 1, shares | Milestone 1 | 443 | ||||||||||
Foreign currency translation adjustments | (29) | (29) | |||||||||
Net loss | (28,975) | (28,975) | |||||||||
Balance ending, value at Dec. 31, 2018 | $ 17,574 | $ 4 | $ 523,525 | $ (5,000) | $ (97) | $ 1,064 | $ (501,922) | ||||
Balance ending, shares at Dec. 31, 2018 | 4 | 43,368 |
CONSOLIDATED STATEMENTS OF ST_2
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Statement Of Stockholders Equity [Abstract] | ||
Common and preferred stock and warrants offering costs | $ 1.7 | |
Common And Preferred Stock Offering Costs | $ 2.6 | |
Warrants issuance cost | $ 0.1 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Operating activities: | ||
Net loss | $ (28,975) | $ (2,294) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 6,789 | 7,481 |
Stock-based compensation | 5,304 | 3,981 |
Amortization of debt discount and debt issuance costs | 2,087 | 2,761 |
Provision (recovery) for doubtful accounts | 164 | (164) |
(Recovery) provision for excess and obsolete inventory | 4,743 | 2,542 |
Deferred income tax benefit | (1,405) | (36) |
Gain on settlement | (6,168) | |
Gain on sale of assets | (856) | |
Loss on extinguishment of debt | 590 | |
Gain from change in estimated fair value of warrants | (12,044) | |
Loss on disposal of instruments | 130 | 281 |
Accretion to contingent consideration | 846 | |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | (396) | 4,153 |
Inventories, net | (6,024) | 258 |
Prepaid expenses and other current assets | (268) | 3,080 |
Other assets | (90) | 348 |
Accrued expenses and other | 1,677 | (6,327) |
Accounts payable | 16 | (2,592) |
Deferred revenue | (261) | 223 |
Other long-term liabilities | (4,367) | (9,524) |
Net cash used in operating activities | (25,608) | (8,729) |
Investing activities: | ||
Purchases of property and equipment | (6,514) | (7,596) |
Cash paid for acquisition of SafeOp Surgical, Inc. | (15,103) | |
Cash paid for acquisition of intangible assets | (400) | |
Cash received from sale of equipment | 348 | 1,101 |
Net cash used in investing activities | (21,669) | (6,495) |
Financing activities: | ||
Proceeds from sale of stock, net | 51,902 | 24,386 |
Borrowings under lines of credit | 90,459 | 96,244 |
Repayments under lines of credit | (89,993) | (98,443) |
Principal payments on capital lease obligations | (96) | (572) |
Proceeds from issuance of term debt, net | 34,077 | |
Principal payments on term loan and notes payable | (32,464) | (3,794) |
Net cash provided by financing activities | 53,885 | 17,821 |
Effect of exchange rate changes on cash | (20) | 276 |
Net increase in cash | 6,588 | 2,873 |
Cash at beginning of year | 22,466 | 19,593 |
Cash at end of year | 29,054 | 22,466 |
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 5,141 | 4,695 |
Cash paid for income taxes | 134 | 107 |
Supplemental disclosure of noncash investing and financing activities: | ||
Issuance of warrants upon execution of term loan | 1,708 | |
Purchases of property and equipment in accounts payable | 940 | 436 |
Reclassification of warrant liabilities to equity | 14,355 | |
Common stock issued for acquisition of intangible assets | 473 | |
Capital lease additions included in property and equipment | 156 | |
Subscription receivable | $ 300 | |
SafeOp Surgical, Inc. | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Accretion to contingent consideration | 800 | |
Supplemental disclosure of noncash investing and financing activities: | ||
Common stock and warrants issued for the acquisition of SafeOp | 12,529 | |
Common stock issued for achievement of SafeOp contingent consideration | $ 1,446 |
The Company and Basis of Presen
The Company and Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
The Company and Basis of Presentation | 1. The Company and Basis of Presentation The Company Alphatec Holdings, Inc. (the “Company”), through its wholly owned subsidiaries, Alphatec Spine, Inc. (“Alphatec Spine”) and SafeOp Surgical, Inc. (“SafeOp”), is a medical technology company that designs, develops, and markets technology for the treatment of spinal disorders associated with disease and degeneration, congenital deformities, and trauma. The Company markets its products in the U.S. via independent sales agents and a direct sales force. On March 6, 2018, the Company and its newly-created wholly-owned subsidiary, Safari Merger Sub, Inc. (“Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with SafeOp, a Delaware corporation, certain Key Stockholders of SafeOp and a Stockholder Representative. Pursuant to the Merger Agreement, a reverse triangular merger (the “Merger”) was consummated on March 8, 2018, in which Sub was merged into SafeOp, with SafeOp being the surviving corporation and a wholly-owned subsidiary of the Company. See Note 8 for further information. On September 1, 2016, the Company completed the sale of its international distribution operations and agreements (collectively, the “International Business”) to Globus Medical Ireland, Ltd., a subsidiary of Globus Medical, Inc., and its affiliated entities (collectively “Globus”). As a result of this transaction, the International Business has been excluded from continuing operations for all periods presented in this Annual Report on Form 10-K and is reported as discontinued operations. See Note 4 for additional information on the divestiture of the International Business. Basis of Presentation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America ("GAAP") and include the accounts of the Company, Alphatec Spine and SafeOp. All intercompany balances and transactions have been eliminated in consolidation. The Company operates in one reportable business segment. Liquidity The Company’s existing working capital at December 31, 2018 is $44.9 million (including cash of $29.1 million) which includes the net proceeds of $51.9 million received as of December 31, 2018 from the equity offering that closed on March 8, 2018 (see Note 10), warrant, employee stock purchase plan and stock option exercises, as well as the amendments to its debt facilities (see Note 5). The Company has incurred significant net losses since inception and has relied on its ability to fund its operations through revenues from the sale of its products, equity financings and debt financings. As the Company has historically incurred losses, successful transition to profitability is dependent upon achieving a level of revenues adequate to support the Company’s cost structure. This may not occur and, unless and until it does, the Company will continue to need to raise additional capital. Operating losses and negative cash flows may continue for at least the next year as the Company continues to incur costs related to the execution of its operating plan and introduction of new products. Should the Company be unable to raise additional capital from outside sources, this will have a material adverse impact on its operations. The Company’s Board approved annual operating plan projects that its existing working capital at December 31, 2018 along with the use of the Expanded Credit Facility with Squadron of $30.0 million that closed on March 27, 2019 (see Note 16), allows the Company to fund its operations through at least one year subsequent to the date the financial statements are issued. As more fully described in Note 5, the Company’s debt agreements include traditional lending and reporting covenants, including a financial covenant that requires the Company to maintain a minimum fixed charge coverage ratio beginning in April 2020 and a minimum liquidity covenant of $5.0 million effective through March 2020. Should at any time the Company fail to maintain compliance with these covenants, the Company will need to seek waivers or amendments to the debt agreements. If the Company is unable to secure such waivers or amendments, it may be required to classify its obligations under the debt agreements in current liabilities on its consolidated balance sheet. The Company may also be required to repay all or a portion of outstanding indebtedness under the debt agreements, which would require the Company to obtain further financing. There is no assurance that the Company will be able to obtain further financing, or do so on reasonable terms. Reclassification Certain amounts in the consolidated financial statements included in our Form 10-K for the year ended December 31, 2017 have been reclassified to conform to current period's presentation. These reclassifications include the depreciation expense for surgical instruments, which was reclassified, to be consistent with industry practice, out of cost of revenues and into sales, general and administrative expense on the Company’s consolidated statements of operations. This resulted in a reclassification of $5.3 million and $5.9 million of depreciation expense for the year ended December 31, 2018 and 2017, which was approximately 15% of total cost of revenues for each year. In addition, general and administrative expense for 2017 was combined into a single line item with sales and marketing expense for a new expense line titled “Sales, general and administrative expense” and litigation-related expenses primarily pertaining to the ongoing litigation with NuVasive, Inc. were classified out of selling, general and administrative expense on the Company’s consolidated statement of operations for the years ended December 31, 2018 and 2017 and onto its own expense line item. None of the adjustments had any effect on the prior period net losses. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property and equipment, intangibles, allowances for doubtful accounts, the valuation of share based liabilities, deferred tax assets, inventory, stock-based compensation, revenues, restructuring liabilities, income tax uncertainties, the acquired value of the SafeOp assets and liability acquired, contingent consideration related to the SafeOp acquisition and other contingencies. Concentrations of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and accounts receivable. The Company limits its exposure to credit loss by depositing its cash with established financial institutions. As of December 31, 2018, a substantial portion of the Company’s available cash funds is held in business accounts. Although the Company deposits its cash with multiple financial institutions, its deposits, at times, may exceed federally insured limits. The Company’s customers are primarily hospitals, surgical centers and distributors, and no one single customer represented greater than 10 percent of consolidated revenues and accounts receivable for any of the periods presented. Credit to customers is granted based on an analysis of the customers’ credit worthiness. Credit losses have not been significant. Revenue Recognition The Company recognizes revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. The Company derives its revenues primarily from the sale of spinal surgery implants used in the treatment of spine disorders. The Company sells its products primarily through its direct sales force and independent distributors. Revenue is recognized when control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Transfer of control generally occurs when the Company receives the written acknowledgment that the product has been used in a surgical procedure or upon shipment to third-party customers who immediately accept title to such product. The Company’s accounts year Accounts Receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Company makes judgments as to its ability to collect outstanding receivables and provides allowances for a portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. In determining the provision for invoices not specifically reviewed, the Company analyzes historical collection experience. If the historical data used to calculate the allowance provided for doubtful accounts does not reflect the Company’s future ability to collect outstanding receivables or if the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, an increase in the provision for doubtful accounts may be required. Inventories, net Inventories are stated at the lower of cost or net realizable value, with cost primarily determined under the first-in, first-out method. The Company reviews the components of inventory on a periodic basis for excess, obsolete and impaired inventory, and records a reserve for the identified items. The Company calculates an inventory reserve for estimated excess and obsolete inventory based upon historical turnover and assumptions about future demand for its products and market conditions. The Company’s biologics inventories have an expiration based on shelf life and are subject to demand fluctuations based on the availability and demand for alternative implant products. The Company’s estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. Increases in the reserve for excess and obsolete inventory result in a corresponding increase to cost of revenues and establish a new cost basis for the part. Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally ranging from three to seven years. Leasehold improvements and assets acquired under capital leases are amortized over the shorter of their useful lives or the remaining terms of the related leases. Goodwill and Intangible Assets The Company’s goodwill represents the excess of the cost over the fair value of net assets acquired from its business combination with SafeOp. The determination of the value of goodwill and intangible assets arising from its business combination and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including capitalized Intangible assets acquired in a business combination that are used for in-process research and development activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project, the Company will amortize the acquired IPR&D over its estimated useful life or expense the acquired in-process research and development should the research and development project be unsuccessful with no future alternative use. Goodwill and IPR&D are not amortized; however, they are assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstance warrant such a review. The goodwill or IPR&D are considered to be impaired if the Company determines that the carrying value of the reporting unit or IPR&D exceeds its respective fair value. The Company performs its annual impairment analysis by comparing the Company’s estimated fair value, calculated from t he Company’s market capitalization, The Company completed its most recent annual evaluation for impairment as of December 31, 2018 and determined that no impairment existed and, consequently, no impairment charge has been recorded during the year Intangible assets with a finite life, such as acquired technology, customer relationships, manufacturing know-how, licensed technology, supply agreements and certain trade names and trademarks, are amortized on a straight-line basis over their estimated useful life, ranging from one to twenty-year period. In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, changes in surgical techniques, market influences and other economic factors. For technology based intangible assets, the Company considers the expected life cycles of products which incorporate the corresponding technology. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, the Company reduces the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for indicators of impairment. The Company amortizes its intangible assets on a straight-line basis over a one to twenty-year period. Impairment of Long-Lived Assets The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the carrying amount of the long-lived assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. There were no impairment charges in 2018 or 2017. Warrants to Purchase Common Stock Warrants are accounted for in accordance with the applicable accounting guidance as either derivative liabilities or as equity instruments depending on the specific terms of the agreements. Liability-classified instruments are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations. The Company estimated liability classified instruments using the Black Scholes model, which required management to develop assumptions and inputs that have significant impact on such valuations. The Company periodically evaluates changes in facts and circumstances that could impact the classification of warrants. in the event of a Fundamental Transaction, as defined in such warrants (other than a Fundamental Transaction not approved by the Company’s Board of Directors). From March 29, 2017, the issuance date, to September 30, 2017, the warrant holders did not control the Company’s Board of Directors, and therefore, the Company’s control, the warrants As of December 31, 2018 and throughout the year ended December 31, 2018, all warrants are classified within stockholders’ equity. Fair Value Measurements The carrying amount of financial instruments consisting of cash, trade accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, accrued compensation and current portion of long-term debt included in the Company’s consolidated financial statements are reasonable estimates of fair value due to their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, management believes the fair value of long-term debt approximates its carrying value. Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Level 2: Level 3: The Company does not maintain any financial assets that are considered to be Level 1, Level 2 or Level 3 instruments as of December 31, 2018. The fair value of the contingent consideration liability assumed in the SafeOp acquisition is recorded as part of the purchase price consideration of the acquisition. using a probability-weighted income approach, utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate related to the risks of the expected cash flows attributable to the milestones. The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2017 and 2018 (in thousands): Level 3 Liabilities Balance at December 31, 2016 $ — Transfer from equity 29,413 Changes in fair value (12,044 ) Exercises (2,311 ) Transfer to equity (15,058 ) Balance at December 31, 2017 — Contingent consideration liability recorded upon acquisition of SafeOp 3,200 Settlement of milestone #1 (1,446 ) Change in fair value measurement 846 Balance at December 31, 2018 $ 2,600 The common stock warrant liabilities for the year ended December 31, 2017 were measured at fair value using the Black-Scholes option pricing valuation model. The assumptions used in the Black-Scholes option pricing valuation model for the common stock warrant liabilities were: (a) a risk-free interest rate based on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the remaining contractual term of the warrants; (b) an assumed dividend yield of zero based on the Company’s expectation that it will not pay dividends in the foreseeable future; (c) an expected term based on the remaining contractual term of the warrants; and (d) an expected volatility based upon the Company's historical volatility over the remaining contractual term of the warrants. Research and Development Research and development expense consists of costs associated with the design, development, testing, and enhancement of the Company’s products. Research and development costs also include salaries and related employee benefits, research-related overhead expenses, fees paid to external service providers. Research and development costs are expensed as incurred. Transaction-related Expenses The Company expensed certain costs related to the SafeOp acquisition, which primarily include third-party advisory and legal fees . Litigation-related Expenses Litigation-related expenses are costs incurred for the ongoing litigation, primarily with NuVasive, Inc . See Note 6 for further information. Leases The Company leases its facilities and certain equipment and vehicles under operating leases, and certain equipment under capital leases. For facility leases that contain rent escalation or rent concession provisions, the Company records the total rent payable during the lease term on a straight-line basis over the term of the lease. The Company records the difference between the rent paid and the straight-line rent within accrued expenses in the accompanying consolidated balance sheets. Product Shipment Cost Product shipment costs are included in sales and marketing expense in the accompanying consolidated statements of operations. Product shipment costs totaled $2.5 million and $2.3 million for the years ended December 31, 2018 and 2017, respectively. Stock-Based Compensation The Company accounts for stock-based compensation under provisions which require that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the vesting period. The amount of expense recognized during the period is affected by subjective assumptions, including estimates of the future volatility of the Company’s stock price, the expected term for its stock options, the number of options expected to ultimately vest, and the timing of vesting for the Company’s share-based awards. The Company uses a Black-Scholes option pricing valuation model to estimate the fair value of its stock option awards. The calculation of the fair value of the awards using the Black-Scholes option pricing model is affected by the Company’s common stock price on the date of grant as well as assumptions regarding the following: • Estimated volatility is a measure of the amount by which the Company’s common stock price is expected to fluctuate each year during the expected life of the award. The Company’s estimated volatility through December 31, 2018 was based on a weighted-average volatility of its actual historical volatility over a period equal to the expected life of the awards. • The expected term represents the period of time that awards granted are expected to be outstanding. Through December 31, 2018, the Company calculated the expected term using a weighted-average term based on historical exercise patterns and the term from option date to full exercise for the options granted within the specified date range. • The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award is granted with a maturity equal to the expected term of the stock option award. • The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company used historical data to estimate the number of future stock option forfeitures. Stock-based compensation recorded in the Company’s consolidated statement of operations is based on awards expected to ultimately vest and has been reduced for estimated forfeitures. The Company’s estimated forfeiture rates may differ from its actual forfeitures which would affect the amount of expense recognized during the period. The Company accounts for stock option grants to non-employees in accordance with provisions which require that the fair value of these instruments be recognized as an expense over the period in which the related services are rendered. Stock-based compensation expense of awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. Determining the likelihood and timing of achieving performance conditions is a subjective judgment made by management which may affect the amount and timing of expense related to these share-based awards. Share-based compensation is adjusted to reflect the value of options which ultimately vest as such amounts become known in future periods. Stock-based awards with market conditions are valued using the Monte Carlo valuation technique which requires management to make significant estimates and assumptions that are not observable from the market. Stock based compensation for awards with both service and market conditions are recognized on a straight line basis over the longer of the derived service period or the requisite service period. Valuation of Stock Option Awards The weighted average assumptions used to compute the stock-based compensation costs for the stock options granted during the years ended December 31, 2018 and 2017 are as follows: Year Ended December 31, 2018 2017 Risk-free interest rate 2.85 % 2.01 % Expected dividend yield — — Weighted average expected life (years) 6.08 6.02 Volatility 78.54 % 78.52 % Stock-Based Compensation Costs The compensation cost that has been included in the Company’s consolidated statement of operations for all stock-based compensation arrangements is detailed as follows (in thousands): Year Ended December 31, 2018 2017 Cost of revenues $ 73 $ 40 Research and development 482 206 Sales, general and administrative 4,749 3,735 Total $ 5,304 $ 3,981 Income Taxes The Company accounts for income taxes in accordance with provisions which set forth an asset and liability approach that requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In making such determination, a review of all available positive and negative evidence must be considered, including scheduled reversal of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. Beneficial Conversion Feature – Series B Preferred Stock In March 2018, the Company completed a private placement of equity securities to certain institutional and accredited investors, providing for the sale by the Company of newly designated Series B Convertible Preferred Stock, which shares of preferred stock were automatically converted into 14.3 million shares of our common stock upon approval by the Company’s stockholders. As the Series B Convertible Preferred Stock provided the holder the benefit to convert to shares of common stock, a beneficial conversion feature (“BCF”) with a calculated intrinsic fair value at issuance of $13.5 million existed as of the date the shares of Series B Convertible Preferred Stock were able to be converted into shares of common stock. This one-time, non-cash deemed dividend impacts net loss attributable to common stockholders and net loss per share on the Company’s consolidated statement of operations for the year ended December 31, 2018 Net Loss per Share Basic earnings per share (“EPS”) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, common stock subject to repurchase by the Company, common stock issuable upon conversion of preferred shares, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share data): Year Ended December 31, 2018 2017 Net loss attributable to common shareholders Continuing operations Discontinued operations Numerator: Net (loss) income, basic $ (42,463 ) $ (4,540 ) $ 2,246 Change in fair value of warrants — 12,044 — Net (loss) income, diluted $ (42,463 ) $ (16,584 ) $ 2,246 Denominator: Weighted average common shares outstanding 35,402 12,827 12,827 Weighted average unvested common shares subject to repurchase (87 ) (39 ) (39 ) Weighted average common shares outstanding - basic 35,315 12,788 12,788 Dilutive impact of warrants — 494 494 Weighted average common shares outstanding - diluted 35,315 13,282 13,282 Basic net (loss) income per share $ (1.20 ) $ (0.36 ) $ 0.18 Diluted net (loss) income per share $ (1.20 ) $ (1.25 ) $ 0.17 The anti-dilutive securities not included in diluted net loss per share were as follows calculated on a weighted average basis Year Ended December 31, 2018 2017 Options to purchase common stock 330 3,156 Warrants to purchase common stock 1,860 1,204 Series A convertible preferred stock 2,141 3,829 Unvested restricted stock awards 87 39 Convertible notes 761 — 5,179 8,228 Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , as modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20 (collectively “ASU 2014-09”). ASU 2014-09 superseded existing revenue recognition standards with a single model unless those contracts are within the scope of other standards. The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. The adoption of ASU 2014-09 did not have a material cumulative impact on the Company’s consolidated financial statements as of January 1, 2018. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments The adoption did not have a material cumulative impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation , to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The amendments in ASU 2017-09 are effective for fiscal and interim reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The adoption did not have a material cumulative impact on the Company’s consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception. The ASU allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company early adopted the guidance in conjunction with the 2018 Private Placement. As no instruments with down round protection were held prior to the 2018 Private Placement, a cumulative effect change was not recognized upon adoption. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Company early adopted the guidance during the second quarter of 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 , Leases (Topic 842) the Company will elect the optional transition method to account for the impact of the adoption with a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The Company expects to elect certain practical expedients permitted under the transition guidance. The Company will record a right-of-use asset and liability upon adoption of the guidance pertaining to its long-term real estate lease for its corporate facilities. The Company is currently finalizing its review of contracts and may identify additional embedded leases and additional amounts to be recorded. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other |
Balance Sheet Details
Balance Sheet Details | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | 3. Balance Sheet Details Accounts Receivable, net Accounts receivable consist of the following (in thousands): December 31, 2018 2017 Accounts receivable $ 15,291 $ 15,328 Less allowance for doubtful accounts (196 ) (506 ) Accounts receivable, net $ 15,095 $ 14,822 Inventories, net Inventories consist of the following (in thousands): December 31, 2018 2017 Raw materials $ 5,813 $ 4,969 Work-in-process 952 502 Finished goods 40,165 37,933 46,930 43,404 Less reserve for excess and obsolete (18,165 ) (16,112 ) Inventories, net $ 28,765 $ 27,292 Property and Equipment, net Property and equipment consist of the following (in thousands except for useful lives): Useful lives December 31, (in years) 2018 2017 Surgical instruments 4 $ 54,848 $ 53,198 Machinery and equipment 7 5,971 5,503 Computer equipment 3 3,104 3,500 Office furniture and equipment 5 1,155 2,794 Leasehold improvements various 1,765 1,714 Construction in progress n/a 92 336 66,935 67,045 Less accumulated depreciation and amortization (53,700 ) (54,375 ) Property and equipment, net $ 13,235 $ 12,670 Total depreciation expense was $6.0 million and $6.6 million for the years ended December 31, 2018 and 2017, respectively. At December 31, 2018 and 2017, assets recorded under capital leases of $0.4 million were included in the machinery and equipment balance. Amortization of assets under capital leases is included in depreciation expense. Intangible Assets, net In conjunction with the acquisition of SafeOp in March 2018, the Company recorded $21.6 million of new intangible assets. See Note 8 for further information regarding the acquisition. Intangible assets, net consist of the following (in thousands, except as indicated): Remaining Avg. Useful lives December 31, (in years) 2018 2017 Developed product technology 10 $ 26,976 $ 13,876 Intellectual property — 1,004 1,004 License agreements 1 5,064 5,738 Trademarks and trade names — 792 732 Customer-related 5 7,458 7,458 Distribution network 4 4,027 4,027 In process research and development 19 8,800 — 54,121 32,835 Less accumulated amortization (27,713 ) (27,587 ) Intangible assets, net $ 26,408 $ 5,248 Total expense related to amortization of intangible assets was $0.8 million and $0.9 million for the years ended December 31, 2018 and 2017, respectively. Future amortization expense related to intangible assets as of December 31, 2018 is as follows (in thousands): Year Ending December 31, 2019 $ 1,566 2020 1,890 2021 1,890 2022 1,890 2023 1,890 Thereafter 17,282 Total $ 26,408 Accrued Expenses Accrued expenses consist of the following (in thousands): December 31, 2018 2017 Commissions and sales milestones $ 3,594 $ 3,360 Payroll and payroll related 3,222 2,968 Litigation settlement obligation 4,400 4,400 Professional fees 2,637 1,484 Royalties 1,354 1,269 Restructuring and severance accruals 710 520 Taxes (3 ) 246 Guaranteed collaboration compensation, current — 4,485 Interest 261 376 Acquisition related - contingent consideration 2,600 — Other 3,541 3,138 Total accrued expenses $ 22,316 $ 22,246 |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Discontinued Operations | 4. Discontinued Operations In connection with the sale of the International Business, the Company entered into a product manufacture and supply agreement (the “Supply Agreement”) with Globus, pursuant to which the Company supplies to Globus certain of its implants and instruments (the “Products”), previously offered for sale by the Company in international markets at agreed-upon prices for a minimum term of three years, with the option for Globus to extend the term for up to two additional twelve month periods subject to Globus meeting specified purchase requirements. In accordance with authoritative guidance, sales to Globus are reported under continuing operations as the Company has continuing involvement under the Supply Agreement. During the year ended December 31, 2018, the Company recorded $8.0 million in revenue and $7.5 million in cost of revenue from the Supply Agreement in continuing operations and during the year ended December 31, 2017, the Company recorded $14.4 million in revenue and $12.1 million in cost of revenue in the continuing operations. General and administrative expenses pertaining to discontinued operations on the Company’s consolidated statements of operations were immaterial for the years ended December 31, 2018 and 2017. In addition, on September 1, 2016, the Company entered into a five-year term credit, security and guaranty agreement with Globus (the “Globus Facility Agreement”), as further described in Note 5, pursuant to which Globus agreed to loan the Company up to $30 million, subject to the terms and conditions set forth in the Globus Facility Agreement, as amended. In November 2018, the Globus facility was paid in full. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 5. Debt MidCap Facility Agreement The Company’s Amended Credit Facility with MidCap provides for a revolving credit commitment up to $22.5 million and provided for a term loan commitment up to $5 million. As of December 31, 2018, $11.0 million was outstanding under the revolving line of credit and the term loan was paid in full. The principal balance outstanding under the revolving line of credit is due in December 2022. Amounts outstanding under the revolving line of credit accrues interest at the London Interbank Offered Rate As collateral for the Amended Credit Facility, MidCap has a first lien security interest in and a second lien on substantially all other assets. At December 31, 2018, $1.3 million remains as unamortized debt discount related to the Amended Credit Facility on the consolidated balance sheet, which will be amortized over the remaining term of the Amended Credit Facility. The Amended Credit Facility also includes several event of default provisions, such as payment default, insolvency conditions and a material adverse effect clause, which could cause interest to be charged at a rate which is up to five percentage points above the rate effective immediately before the event of default or result in MidCap’s right to declare all outstanding obligations immediately due and payable. On March 8, 2018, the Company entered into a Seventh Amendment to the Amended Credit Facility to extend the date that the financial covenants of the Amended Credit Facility are effective from April 2018 to April 2019, and established a minimum liquidity covenant of $5.0 million effective through March 2019. On November 6, 2018, the Company entered into the Eighth Amendment to the Amended Credit Facility to extend the date that the financial covenants of the Amended Credit Facility are effective from April 2019 to April 2020, and extended the minimum liquidity covenant through March 2020. The Company was in compliance with the covenants under the Amended Credit Facility at December 31, 2018. Globus Facility Agreement On September 1, 2016, the Company and Globus entered into the Globus Facility Agreement, pursuant to which Globus loaned the Company $30 million, subject to the terms and conditions set forth in the Globus Facility Agreement. On November 7, 2018, the Company repaid in full all amounts outstanding and due under the Globus Facility Agreement. The Company made a final payment of $29.2 million to Globus, consisting of outstanding principal and accrued interest. All amounts previously recorded as debt issuance costs were recorded as a loss on debt extinguishment on the Company’s consolidated statement of operations for the year ended December 31, 2018. Squadron Credit Agreement On November 6, 2018, the Company closed a $35 million Term Loan with Squadron, a provider of debt financing to growing companies in the orthopedic industry. Net proceeds of approximately $34.1 million were used to retire the Company’s existing $29.2 million term debt with Globus. The remainder of the proceeds will be used for general corporate purposes. The debt has a five-year maturity and bears interest at LIBOR plus 8% (10.5% as of December 31, 2018) per annum. The Agreement specifies a minimum interest rate of 10% and a maximum of 13% per year. Interest-only payments are due monthly through May 2021, followed by $10 million in principal payable in 29 equal monthly installments beginning June 2021 and a $25 million lump-sum payment payable at maturity in November 2023. As collateral for the Term Loan, Squadron has a first lien security interest in substantially all assets except for . The credit agreement also includes several event of default provisions, such as payment default, insolvency conditions and a material adverse effect clause, which could cause interest to be charged at a rate which is up to five percentage points above the rate effective immediately before the event of default or result in Squadron’s right to declare all outstanding obligations immediately due and payable. Furthermore, the credit agreement contains various covenants, including monthly compliance certifications and compliance with government regulations and maintenance of insurance, and prohibitions against certain specified actions, including acquiring any new equipment financings over a specified amount. The credit agreement also contains various negative covenants including a $5 million minimum liquidity requirement through March 31, 2020. The minimum liquidity covenant will be replaced by a fixed charge ratio, pursuant to which operating cash to fixed charges (as defined) must equal at least 1:1 on a rolling 12-month basis, beginning April 2020. The Company was in compliance with the covenants under the credit agreement at December 31, 2018. In connection with the financing, the Company issued warrants to Squadron to purchase 845,000 shares of common stock at an exercise price of $3.15 per share. The warrants have a seven-year term and are immediately exercisable. See Note 10 for further detail on the warrants. The debt is recorded at its carrying value of $32.4 million, net of issuance costs, including all amounts paid to third parties to secure the debt and the fair value of the warrants issued. The debt issuance costs are being amortized into interest expense over the five-year term utilizing the effective interest rate method. In March 2019, the Company closed on an Expanded Credit Facility with Squadron for up to $30 million in additional secured financing. See Note 16 for further information. Other Debt Agreements The Company has one outstanding capital lease arrangement as of December 31, 2018. The lease bears interest at an annual rate of 6.4% and is due in monthly principal and interest installments, collateralized by the related equipment, and matures in December 2022. Long-term debt consists of the following (in thousands): December 31, 2018 2017 Amended Credit Facility and Term Loan with MidCap $ 11,010 $ 12,674 Globus Facility Agreement — 30,000 Squadron Term Loan 35,000 — Notes payable 296 200 Convertible note 3,000 — Total 49,306 42,874 Add: capital leases 126 222 Less: debt discount (3,857 ) (2,023 ) Total 45,575 41,073 Less: current portion of long-term debt (3,276 ) (3,306 ) Total long-term debt, net of current portion $ 42,299 $ 37,767 Principal payments on debt are as follows as of December 31, 2018 (in thousands): Year Ending December 31, 2019 $ 3,250 2020 47 2021 2,414 2022 15,148 2023 and thereafter 28,447 Total 49,306 Add: capital lease principal payments 126 Less: debt discount (3,857 ) Total 45,575 Less: current portion of long-term debt (3,276 ) Long-term debt, net of current portion $ 42,299 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 6. Commitments and Contingencies Leases The Company occupies approximately 76,000 square feet of office, engineering, and research and development space in Carlsbad, California. Monthly rent is approximately $111,000 per month for the year ended December 31, 2018 and increases by approximately $3,000 per month each year through expiration of the lease on July 31, 2021. The Company also leases certain equipment under operating leases which expire on various dates through 2021, and certain equipment under a capital lease that expires in 2022. Future minimum annual lease payments under the Company’s operating and capital leases are as follows (in thousands): Year ending December 31, Operating Capital 2019 $ 1,684 $ 34 2020 1,688 37 2021 1,009 37 2022 — 37 2023 and thereafter — — 4,381 145 Less: amount representing interest (19 ) Present value of minimum lease payments 126 Current portion of capital leases (34 ) Capital leases, less current portion $ 92 Rent expense under operating leases for each of the years ended December 31, 2018 and 2017 was $1.4 million. Litigation The Company is and may become involved in various legal proceedings arising from its business activities. While management is not aware of any litigation matter that in and of itself would have a material adverse impact on the Company’s consolidated results of operations, cash flows or financial position, litigation is inherently unpredictable, and depending on the nature and timing of a proceeding, an unfavorable resolution could materially affect the Company’s future consolidated results of operations, cash flows or financial position in a particular period. The Company assesses contingencies to determine the degree of probability and range of possible loss for potential accrual or disclosure in the Company’s consolidated financial statements. An estimated loss contingency is accrued in the Company’s consolidated financial statements if it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Because litigation is inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments about future events. When evaluating contingencies, the Company may be unable to provide a meaningful estimate due to a number of factors, including the procedural status of the matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information important to the matters. In addition, damage amounts claimed in litigation against the Company may be unsupported, exaggerated or unrelated to reasonably possible outcomes, and as such are not meaningful indicators of the Company’s potential liability. On February 13, 2018, NuVasive, Inc. filed suit against the Company in the United States District Court for the Southern District of California, alleging that certain of the Company’s products (including components of the Battalion™ Lateral System), infringe, or contribute to the infringement of, U.S. Patent Nos. 7,819,801, 8,355,780, 8,439,832, 8,753,270, 9,833,227 (entitled “Surgical access system and related methods”), U.S. Patent No. 8,361,156 (entitled “Systems and methods for spinal fusion”), and U.S. Design Patent Nos. D652,519 (“Dilator”) and D750,252 (“Intervertebral Implant”). NuVasive is seeking unspecified monetary damages and a court injunction against future infringement by the Company. On March 8, 2018, the Company moved to dismiss NuVasive’s claims of infringement of its design patents on the grounds that those allegations fail to state a cognizable legal claim. On May 14, 2018, the Court ruled that NuVasive had failed to state a plausible claim for infringement of the asserted design patents and granted the Company’s motion to dismiss those claims with prejudice, as any further amendment would be futile. The Company filed its answer, affirmative defenses and counterclaims to NuVasive’s remaining claims on May 21, 2018. On March 26, 2018, NuVasive moved for a preliminary injunction, which, on March 27, 2018, the Court denied without prejudice for failure to comply with the Court’s chambers rules. On April 5, 2018, NuVasive again moved for a preliminary injunction. The Court held a hearing on the matter, having been fully briefed, on June 21, 2018. On July 10, 2018, the Court ruled that NuVasive had failed to establish either likelihood of success on the merits of its remaining claims or that it would suffer irreparable harm in the absence of a preliminary injunction. Accordingly, the Court denied NuVasive’s motion for preliminary injunction. On September 13, 2018, NuVasive filed an Amended Complaint for Patent Infringement, asserting additional infringement claims of U.S. Patent Nos. 9,924,859, 9,974,531 and 8,187,334. The Company filed its answer, affirmative defenses and counterclaims to NuVasive’s claims on October 12, 2018. On October 26, 2018, NuVasive moved to dismiss the Company’s counterclaims that NuVasive intentionally had misled the Patent Office as a means of obtaining certain patents asserted against the Company . On January 30, 2019, the Court denied NuVasive’s motion as to all but one of the Company’s counterclaims. The Court granted NuVasive’s motion with respect to one counterclaim, but granted the Company leave to amend its counterclaim to cure the dismissal. The Company amended that counterclaim on February 14, 2019. On February 28, 2019, NuVasive moved to dismiss the amended counterclaim. A hearing on the matter is set for April 4, 2019. On December 13, 2018, the Company filed a petition with the Patent Trial and Appeal Board (“PTAB”) challenging the validity of certain claims of U.S. Patent No. 8,361,156. U.S. Patent No. 8,187,334 On February 6, 2019, upon joint motion of the parties, the Court stayed all proceedings in this matter pending PTAB’s determination of whether to institute inter partes of the asserted claims of the two patents at issue and vacated the trial date. The Company anticipates that the stay of proceedings will remain in effect until at least July 2019. The Company believes that the allegations lack merit and intends to vigorously defend all claims asserted. in accordance with authoritative accounting guidance, Indemnifications In the normal course of business, the Company enters into agreements under which it occasionally indemnifies third-parties for intellectual property infringement claims or claims arising from breaches of representations or warranties. In addition, from time to time, the Company provides indemnity protection to third-parties for claims relating to past performance arising from undisclosed liabilities, product liabilities, environmental obligations, representations and warranties, and other claims. In these agreements, the scope and amount of remedy, or the period in which claims can be made, may be limited. It is not possible to determine the maximum potential amount of future payments, if any, due under these indemnities due to the conditional nature of the obligations and the unique facts and circumstances involved in each agreement. In October 2017, NuVasive filed a lawsuit in Delaware Chancery Court against Mr. Miles, the Company’s Chairman and CEO, who was a former officer and board member of NuVasive. The Company itself was not initially a named defendant in this lawsuit; however, on June 28, 2018, NuVasive amended its complaint to add the Company as a defendant. As of December 31, 2018, the Company has not recorded any liability on the consolidated balance sheet related to this matter. On October 12, 2018, the Delaware Court ordered that NuVasive begin advancing legal fees for Mr. Miles’ defense in the lawsuit, as well as Mr. Miles’ legal fees incurred in pursuing advancement of his fees, pursuant to an indemnification agreement between NuVasive and Mr. Miles. Royalties The Company has entered into various intellectual property agreements requiring the payment of royalties based on the sale of products that utilize such intellectual property. These royalties primarily relate to products sold by Alphatec Spine and are based on fixed fees or calculated either as a percentage of net sales or on a per-unit sold basis. Royalties are included on the accompanying consolidated statements of operations as a component of cost of revenues. As of December 31, 2018, the Company is obligated to pay guaranteed minimum royalty payments under these agreements of approximately $5.9 million through 2023 and beyond |
Orthotec Settlement
Orthotec Settlement | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Orthotec Settlement | 7. Orthotec Settlement On September 26, 2014, the Company entered into a Settlement and Release Agreement, dated as of August 13, 2014, by and among the Company and its direct subsidiaries, including Alphatec Spine, Inc., Alphatec Holdings International C.V., Scient'x S.A.S. and Surgiview S.A.S.; HealthpointCapital, LLC, HealthpointCapital Partners, L.P., HealthpointCapital Partners II, L.P., John H. Foster and Mortimer Berkowitz III; and Orthotec, LLC and Patrick Bertranou, (the “Settlement Agreement”). Pursuant to the Settlement Agreement, the Company agreed to pay Orthotec, LLC $49.0 million in cash, including initial cash payments totaling $1.75 million, which the Company previously paid in March 2014, and an additional lump sum payment of $15.75 million, which the Company previously paid in April 2014. The Company agreed to pay the remaining $31.5 million in 28 quarterly installments of $1.1 million and one additional quarterly installment of $0.7 million, commencing October 1, 2014. The payments set forth above are guaranteed by Stipulated Judgments held against the Company, HealthpointCapital Partners, L.P., HealthpointCapital Partners II, L.P., HealthpointCapital, LLC, John H. Foster and Mortimer Berkowitz III and, in the event of a default, will be entered and enforced against these entities and/or individuals in that order. In September 2014, the Company and HealthpointCapital entered into an agreement for joint payment of settlement whereby HealthpointCapital has agreed to contribute $5 million to the $49 million settlement amount. The $5 million is classified within stockholders’ equity on the Company’s consolidated balance sheet due to the related party nature with HealthpointCapital and its affiliates. See Note 13 for further information. As of December 31, 2018, the Company has made installment payments in the aggregate of $36.2 million, with a remaining outstanding balance of $21.6 million (including interest). The Company has the right to prepay the amounts due without penalty. The unpaid amounts due accrue interest at the rate of 7% per year until paid in full. The accrued but unpaid interest will be paid in quarterly installments of $1.1 million (or the full amount of the accrued but unpaid interest if less than $1.1 million) following the full payment of the $31.5 million in quarterly installments described above. No interest will accrue on the accrued interest. The Settlement Agreement provides for mutual releases of all claims in the Orthotec, LLC v. Surgiview, S.A.S, et al. matter in the Superior Court of California, Los Angeles County and all other related litigation matters involving the Company and its directors and affiliates. |
Acquisition of SafeOp Surgical,
Acquisition of SafeOp Surgical, Inc. | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisition of SafeOp Surgical, Inc. | 8. Acquisition of SafeOp Surgical, Inc. On March 8, 2018, the Company acquired SafeOp, a privately-held provider of neuromonitoring technology designed to enable effective intra-operative nerve health assessment. At the time of acquisition SafeOp had FDA 510(k) approval for a somatosensory evoked potential (“SSEP”) monitoring technology. The Company has developed a product that will allow for both free run and triggered specific recording of muscle activity, also known as Electromyography (“EMG”). The Company received FDA clearance for SafeOp’s EMG technology in February 2019 to complement the SSEP solution, and anticipates commercialization of the combined technology solution in mid-2019. In addition to expanding the Company’s market presence in lateral spine surgery, the Company believes that the SafeOp solution will allow it to integrate neuromonitoring into its broader product portfolio and accelerate the transition to procedural integration of the entire portfolio. The Merger was accounted for using the acquisition method of accounting. The following unaudited pro forma results of operations assume that the Company acquired SafeOp on January 1, 2018 and 2017, respectively (in thousands). Year Ended December 31, 2018 2017 Revenue $ 91,694 $ 101,981 Loss from continuing operations (29,493 ) (8,776 ) Net loss $ (28,975 ) $ (6,530 ) Net loss per share, basic and diluted $ (0.69 ) $ (0.35 ) The unaudited pro forma information presented above is not necessarily indicative of either the results of operations that would have occurred had the acquisition of SafeOp been effective on January 1, 2018 or 2017, respectively, or of the Company’s future results of operations. The results of operations for SafeOp have been included in the Company’s financial results since the acquisition date. For the year ended December 31, 2018, the Company’s total net revenues were not materially impacted from the Merger and net loss increased by $2.8 million due to SafeOp’s operating expenses. Under the term of the definitive merger agreement, the Company agreed to pay $15.1 million in cash and agreed to issue 3,265,132 shares of common stock. The Company paid the full $15.1 million in cash consideration during the year ended December 31, 2018. On March 8, 2018, the Company issued 2,975,209 shares of common stock valued at $9.8 million, based on the closing share price of $3.30, and issued an additional 115,621 shares of common stock during the second quarter of 2018 and the remaining 174,302 shares of common stock during the third quarter of 2018. The Company also issued $3 million in convertible notes that were convertible into a total of 987,578 shares, which included total interest incurred, of common stock and issued warrants to purchase 2.2 million shares of common stock at an exercise price of $3.50 per share. The convertible notes matured on March 9, 2019 and were settled in cash. Shares of common stock are issuable upon achievement of post-closing milestones as described further below. The total purchase price is presented below (in thousands): Cash paid $ 15,103 Common stock issued 10,879 Note 3,000 Warrants 1,650 Contingent consideration issued or issuable 3,200 Total $ 33,832 The Company has measured the identifiable assets and liabilities assumed at their acquisition date fair values separately from goodwill. The intangible assets acquired includes the EPAD tradename, in-process research and development (“IPR&D”) for the EMG technology, and the developed technology for SSEP. The fair value of the EPAD tradename was determined to be $60,000 with an estimated useful life of one year. The IPR&D for the EMG technology is considered to have an indefinite life until the development is completed (i.e. once FDA clearance is obtained), at which point the Company will determine the intangible asset’s estimate useful life. The developed SSEP technology has an estimated fair value of $13.1 million with an estimated useful life of 20 years. The Company has not presented any measurement period adjustments to the purchase price or the allocation detailed below for the year ended December 31, 2018 due to their immaterial nature. The allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values, is as follows (in thousands): Assets acquired: Accounts receivable $ 40 Inventory 192 Prepaid expenses and other current assets 89 Total current assets $ 321 Property and equipment, net 20 Other long-term assets 5 IPR&D 8,400 EPAD Tradename 60 Developed Technology 13,100 Total assets $ 21,906 Liabilities assumed: Accounts payable $ 55 Accrued expenses 148 Deferred tax liability 1,768 Total liabilities $ 1,971 Goodwill 13,897 Total consideration transferred $ 33,832 The purchase price exceeded the fair value of the net tangible and identifiable intangible assets acquired from SafeOp. As a result, the Company recorded goodwill in connection with the Merger. Specifically, the goodwill recorded as part of the Merger includes the assembled workforce and synergies associated with the combined entity. The goodwill is not expected to be deductible for tax purposes. As a result of the Merger, for the year ended December 31, 2018, the Company incurred $1.6 million in total transaction costs which, in accordance with authoritative accounting guidance, were expensed as incurred. The Company agreed to issue additional shares of common stock for up to $4.3 million upon achievement of post-closing milestones (the “Contingent Consideration”). The first milestone included payment of up to $1.4 million due 10 days after submission of an application for Regulatory Approval (as that term is defined in the Merger Agreement) for an indication for regulatory clearance for use of a product that includes specifically recording of muscle activity (EMG). During the third quarter of 2018, the first milestone was achieved and the Company issued 443,421 shares of common stock as payment. The second milestone includes a payment of up to $2.9 million in common stock due 10 days after the receipt of Regulatory Approval from any Regulatory Authority (as those terms are defined in the Merger Agreement) for an indication for use of a product that includes specifically EMG. During the first quarter of 2019, the second milestone was achieved and the Company issued 886,843 shares of common stock as payment. The Contingent Consideration is recorded as a liability and measured at fair value using a probability-weighted income approach, utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate related to the risks of the expected cash flows attributable to the milestones. The material factors that may impact the fair value of the Contingent Consideration, and therefore, this liability, are the probabilities of achieving the related milestones and the discount rate. Significant increases or decreases in any of the probabilities of success would result in a significantly higher or lower fair value, respectively. The fair value of the Contingent Consideration, and the associated liability relating to the Contingent Consideration at each reporting date, will be re-assessed with the changes in fair value reflected in earnings. For the year ended December 31 |
Sale of Assets
Sale of Assets | 12 Months Ended |
Dec. 31, 2018 | |
Discontinued Operations And Disposal Groups [Abstract] | |
Sale of Assets | 9. Sale of Assets On May 5, 2017, the Company entered into an agreement to sell certain inventory and intellectual property to a third party for $1.0 million in consideration, payable via a credit to future minimum royalties owed to the third party under an existing exclusive license agreement between the parties. The Company recorded a net gain on sale of assets of $0.9 million which is included under operating expenses on the Company’s consolidated statement of operations. |
Equity
Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Equity | 10. Equity Redeemable preferred stock The Company issued shares of redeemable preferred stock in connection with its initial public offering in June 2006. As of December 31, 2018 and 2017, the redeemable preferred stock carrying value was $23.6 million and there were 20 million shares of redeemable preferred stock authorized. The redeemable preferred stock is not convertible into common stock but is redeemable at $9.00 per share, (i) upon the Company’s liquidation, dissolution or winding up, or the occurrence of certain mergers, consolidations or sales of all or substantially all of the Company’s assets, before any payment to the holders of the Company’s common stock, or (ii) at the Company’s option at any time. Holders of redeemable preferred stock are generally not entitled to vote on matters submitted to the stockholders, except with respect to certain matters that will affect them adversely as a class, and are not entitled to receive dividends. The carrying value of the redeemable preferred stock was $7.11 per share at December 31, 2018 and 2017. The redeemable preferred stock is presented separately from stockholders’ deficit in the consolidated balance sheets and any adjustments to its carrying value up to its redemption value of $9.00 per share are reported as a dividend. Series A Convertible Preferred Stock In March 2017, the Company completed a private placement (the “2017 Private Placement”) with certain institutional and accredited investors, including certain directors, executive officers and employees of the Company (collectively, the “Purchasers”), providing for the sale by the Company of 1,809,628 shares of the Company’s common stock at a purchase price of $2.00 per share and 15,245 shares of newly designated Series A Convertible Preferred Stock at a purchase price of $1,000 per share (which shares were convertible into approximately 7,622,372 shares of common stock). The 2017 Private Placement generated aggregate gross proceeds to the Company of approximately $18.9 million. The Series A Convertible Preferred Stock are entitled to dividends on an as-if-converted basis in the same form as any dividends actually paid on shares of common stock or other securities. Except as otherwise required by law, the holders of Series A Convertible Preferred Stock have no right to vote on matters submitted to a vote of the Company’s stockholders. Without the prior written consent of 75% of the outstanding shares of Series A Convertible Preferred Stock, the Company may not: (a) alter or change adversely the powers, preferences or rights given to the Series A Convertible Preferred Stock or alter or amend the Certificate of Designation for the Series A Convertible Preferred Stock, (b) amend the Company’s certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders of Series A Convertible Preferred Stock, (c) increase the number of authorized shares of Series A Convertible Preferred Stock, or (d) enter into any agreement with respect to any of the foregoing. In the event of the dissolution and winding up of the Company, the proceeds available for distribution to the Company’s stockholders shall be distributed pari passu among the holders of the shares of common stock and Series A Convertible Preferred Stock, pro rata based upon the number of shares held by each such holder, as if the outstanding shares of Series A Convertible Preferred Stock were convertible, and were converted, into shares of common stock. During the years ended December 31, 2018 and 2017, 1,274 and 9,927 shares of Series A Preferred Stock were converted into 636,997 and 4,963,702 shares of common stock. As of December 31, 2018, there were 4,043 shares of Series A Convertible Preferred Stock outstanding, which are convertible into 2,021,673 shares of common stock. See Note 16 for information regarding Series A conversions that occurred during the first quarter of 2019. 2017 Warrants In connection with the 2017 Private Placement, the Company issued warrants to purchase up to 9,432,000 shares of the Company’s common stock at an exercise price of $2.00 per share (the “2017 Common Stock Warrants”). The Company also issued warrants to purchase common stock to the exclusive placement agents for the issuance (“the 2017 Banker Warrants”). The 2017 Banker Warrants were for the purchase of up to an aggregate of 471,600 shares of the Company’s common stock with substantially the same terms as the 2017 Common Stock Warrants, except that they have an exercise price equal $2.50 per share. The 2017 Common Stock Warrants and the 2017 Banker Warrants (collectively, the “2017 Warrants”) expire on June 15, 2022. The 2017 Warrants, are exercisable for cash. The exercise price is subject to adjustment in the case of stock dividends or other distributions on shares of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock, and also, subject to limitations, upon any distribution of assets, including cash, stock or other property to the Company’s stockholders. Prior to exercise, holders of the 2017 Warrants do not have any of the rights of holders of the common stock purchasable upon exercise, including voting rights; however, the holders of the 2017 Warrants have certain rights to participate in distributions or dividends paid on the Company’s common stock to the extent set forth in the respective warrant agreements. The 2017 Warrants may not be exercised by the holder to the extent that the holder, together with its affiliates, would beneficially own, after such exercise more than 4.99% of the shares of the Company’s common stock then outstanding (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided that such limitation cannot exceed 9.99%) and provided that any increase in the beneficial ownership limitation shall not be effective until 61 days after such notice is delivered. If the Company effects a fundamental transaction, then upon any subsequent exercise of any 2017 Warrants, the holder thereof shall have the right to receive, for each share of common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number of shares of the successor’s or acquiring corporation’s common stock or of the Company’s common stock, if the Company is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of common stock into which the 2017 Warrants were exercisable immediately prior to such fundamental transaction. In addition, in the event of a fundamental transaction (other than a fundamental transaction not approved by the Company’s Board of Directors), the Company or any successor entity shall, at the holder’s option, purchase the holder’s 2017 Warrants for an amount of cash equal to the value of the 2017 Warrants as determined in accordance with the Black Scholes option pricing model. A fundamental transaction as described in the 2017 Warrants generally includes any merger with or into another entity, sale of all or substantially all of the Company’s assets, tender offer or exchange offer, reclassification of the Company’s common stock or the consummation of a transaction whereby another entity acquires more than 50% of the Company’s outstanding voting stock. Based on the terms of the 2017 Warrants, the Company may be required to settle such warrants with cash upon a fundamental transaction, as defined. Since potential future cash settlement is deemed to be within the Company’s control, the 2017 Warrants are classified in stockholders’ equity in accordance with the authoritative accounting guidance. In conjunction with the 2018 Private Placement described further below, a holder of 2.4 million 2017 Warrants exercised all of its 2017 During the year Common Stock Warrants. During the year ended December 31, 2017, the Company received proceeds of approximately $3.3 million in connection with the exercise of approximately 1.7 million of Common Stock Warrants. As of December 31, 2018, there were 3,757,000 shares of 2017 Common Stock Warrants outstanding. During the year ended December 31, 2018, 304,182 of the 2017 Banker Warrants were exercised for total cash proceeds upon exercise of $0.8 million during the period. No 2017 Banker Warrants were exercised during the year ended December 31, 2017. A total of 167,418 of the 2017 Banker Warrants remained outstanding as of December 31, 2018. Series B Convertible Preferred Stock On March 8, 2018, the Company completed the 2018 Private Placement to certain institutional and accredited investors, including certain directors and executive officers of the Company, at a purchase price of $1,000 per share, 45,200 of newly designated Series B Convertible Preferred Stock, which shares of preferred stock were automatically converted into 14,349,236 shares of the Company’s common stock upon approval by the Company’s stockholders at the 2018 annual meeting of stockholders held in May 2018, and warrants to purchase up to 12,196,851 shares of common stock at an exercise price of $3.50 per share (the “2018 Common Stock Warrants”). The 2018 Common Stock Warrants became exercisable following stockholder approval at the 2018 annual meeting of stockholders, are subject to certain ownership limitations in certain cases, and expire five years after the date of such stockholder approval. The gross proceeds from the 2018 Private Placement were approximately $45.2 million. Pursuant to the terms of the purchase agreement entered into in connection with the 2018 Private Placement, from the date of the stockholder approval of the 2018 Private Placement, or May 17, 2018, through the first anniversary of the effective date of the resale registration statement related to the 2018 Private Placement, or May 11,2019, if the Company issues any shares of common stock or common stock equivalents, subject to certain permitted exceptions, at a price below the conversion price on the date stockholder approval was obtained (a “Dilutive Issuance”), the Company is required to issue an additional number of shares of common stock to the purchasers in the 2018 Private Placement in amount equal the number of shares of common stock such purchasers would have received if the Dilutive Issuance occurred prior to the date the Company’s stockholders approved the 2018 Private Placement. 2018 Warrants The 2018 Common Stock Warrants (the “2018 Warrants”), are exercisable for cash or by cashless exercise. The exercise price of the 2018 Warrants is subject to adjustment in the case of stock dividends or other distributions on shares of common stock or any other equity or equity equivalent securities payable in shares of common stock, stock splits, stock combinations, reclassifications or similar events affecting the Company’s common stock, and also, subject to limitations, upon any distribution of assets, including cash, stock or other property to the Company’s stockholders. Prior to the exercise, holders of the 2018 Warrants do not have any of the rights of holders of the common stock purchasable upon exercise, including voting rights; however, the holders of the 2018 Warrants have certain rights to participate in distributions or dividends paid on the Company’s common stock to the extent set forth in the 2018 Warrants. Some of the 2018 Warrants may not be exercised by the holder to the extent that the holder, together with its affiliates, would beneficially own, after such exercise more than 4.99% of the shares of the Company’s common stock then outstanding (subject to the right of the holder to increase or decrease such beneficial ownership limitation upon notice to us, provided that such limitation cannot exceed 9.99%) and provided that any increase in the beneficial ownership limitation shall not be effective until 61 days after such notice is delivered. If the Company effects a fundamental transaction, then upon any subsequent exercise of any 2018 Warrants, the holder thereof shall have the right to receive, for each share of common stock that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number of shares of the successor’s or acquiring corporation’s common stock or of the Company’s common stock, if the Company is the surviving corporation, and any additional consideration receivable as a result of such fundamental transaction by a holder of the number of shares of common stock into which the 2018 Warrants were exercisable immediately prior to such fundamental transaction. A fundamental transaction as described in the 2018 Warrants generally includes any merger with or into another entity, sale of all or substantially all of the Company’s assets, tender offer or exchange offer, reclassification of the Company’s common stock or the consummation of a transaction whereby another entity acquires more than 50% of the Company’s outstanding voting stock. In addition to the 12,196,851 warrants issued in the 2018 Private Placement, the Company issued 1,800,000 warrants to an existing holder with identical terms to the 2018 Warrants, including the exercise price of $3.50. All the 2018 Warrants were deemed to qualify for equity classification under authoritative accounting guidance. Warrants A summary of all outstanding warrants is as follows: Number of Warrants Strike Price 2017 Common Stock Warrants 3,757,000 $ 2.00 2017 Banker Warrants 167,418 $ 2.50 2018 Common Stock Warrants 13,996,851 $ 3.50 Merger Warrants 2,200,000 $ 3.50 Executive 1,327,434 $ 5.00 Squadron Capital 845,000 $ 3.15 Other 7,812 $ 19.20 Total 22,301,515 In December 2011, in connection with the third amendment to the Company’s former credit facility with the Silicon Valley Bank ("SVB"), finance charges totaling $0.2 million were waived in exchange for the issuance to SVB of warrants to purchase 7,812 shares of the Company’s common stock. The warrants are immediately exercisable, can be exercised through a cashless exercise, have an exercise price of $19.20 per share and have a 10-year term. As mentioned above, the Company issued Common Stock Warrants in connection with the private placement financing in March 2017 and March 2018. The warrants expire on the fifth anniversary of the date on which they were first exercisable. Further, as described in Note 8, the Company issued warrants in conjunction with the acquisition of SafeOp. In December 2017 the Company issued warrants to Mr. Miles, the Company’s Chairman and Chief Executive Officer, to purchase 1,327,434 shares of the Company’s common stock for $5 per share. The warrants have a five-year term. The warrants issued to Mr. Miles were accounted for as share based compensation, and the fair value of the warrants of approximately $1.4 million were recognized in full in the statement of operations for the year ended December 31, 2017 as the warrants were immediately vested upon issuance. The following inputs were used to estimate the fair value of warrants issued to Mr. Miles: risk free interest rate of 1.9%, volatility of 99.5%, expected term of 2.3 years and dividend yield of 0%. As further described in Note 5, in connection with the debt financing with Squadron, the Company issued warrants to purchase 845,000 shares of common stock at an exercise price of $3.15 per share. The warrants have a seven-year term and are immediately exercisable. In accordance with authoritative accounting guidance, the warrants classified for equity treatment upon issuance and were recorded as a debt discount to the face of the debt liability based on a relative fair value basis to be amortized into interest expense over the life of the debt agreement. As the warrants provide for partial price protection that allow for a reduction in the price in the event of a lower per share priced issuance, the warrants were valued utilizing a Monte Carlo simulation that considers the probabilities of future financings. The Monte Carlo model simulates the present value of the potential outcomes of future stock prices of the Company over the seven-year life of the warrants. The projection of stock prices is based on the risk-free rate of return and the volatility of the stock price of the Company and correlates future equity raises based on the probabilities provided |
Stock Benefit Plans and Stock-B
Stock Benefit Plans and Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Benefit Plans and Stock-Based Compensation | 11. Stock Benefit Plans and Stock-Based Compensation In the third quarter of 2016, the Company adopted its 2016 Equity Incentive Plan (the “2016 Plan”), which replaced the Company’s 2005 Employee, Director and Consultant Stock Plan. On October 25, 2018, the Company’s Board of Directors adopted an amendment to the Company’s 2016 Equity Incentive Award Plan. The 2016 Plan allows for the grant of options, restricted stock, restricted stock unit awards and performance unit awards to employees, directors, and consultants of the Company. Upon its adoption, the 2016 Plan had 1,083,333 shares of common stock reserved for issuance. The Board of Directors determines the terms of the grants made under the 2016 Plan. Options granted under the 2016 Plan expire no later than ten years from the date of grant (five years for incentive stock options granted to holders of more than 10% of the Company’s voting stock). Options generally vest over a four-year period and may be immediately exercisable upon a change of control of the Company. The exercise price of incentive stock options may not be less than 100% of the fair value of the Company’s common stock on the date of grant. The exercise price of any option granted to a 10% stockholder may be no less than 110% of the fair value of the Company’s common stock on the date of grant. At December 31, 2018, 711,933 shares of common stock remained available for issuance under the 2016 Plan. The 2016 Plan will expire in May 2026. On October 4, 2016, the Company’s Board of Directors adopted the 2016 Employment Inducement Award Plan (the “Inducement Plan”). The Inducement Plan allows for the grant of options, restricted stock, restricted stock unit awards and performance unit awards to new employees of the Company by granting an award to such new employee as an inducement for such new employee to begin employment with the Company. As of December 31, 2018 the Inducement Plan had 188,356 shares of common stock reserved for issuance, which may only be granted to an employee who has not previously been an employee or member of the board of directors of the Company. The terms of the Inducement Plan are substantially similar to the terms of the Company’s 2016 Plan with two principal exceptions: (i) incentive stock options may not be granted under the Inducement Plan; and (ii) the annual compensation paid by the Company to specified executives will be deductible only to the extent that it does not exceed $1.0 million. Under the Inducement Plan, the Company granted $0.8 million of value Performance Restricted Share Units ("PRSUs") in 2016. The PRSUs will vest in a dollar amount representing between 0% to 250% of the target value upon the earlier of September 14, 2019 or a change in control of the Company. The actual payout amount will be based on the Company’s market capitalization on the vesting date and the fair-market value of the Company’s common stock on such vesting date and will be paid in shares of the Company's common stock. The 2016 Plan and the Inducement Plan are collectively referred to as the Plans. Stock Options A summary of the Company’s stock option activity under the Plans and related information is as follows (in thousands, except as indicated and per share data): Shares Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at December 31, 2017 3,156 $ 4.31 8.28 $ 1,841 Granted 2,298 $ 2.88 Exercised (14 ) $ 1.81 Forfeited (758 ) $ 4.12 Outstanding at December 31, 2018 4,682 $ 3.64 8.46 $ 919 Options vested and exercisable at December 31, 2018 1,249 $ 6.34 6.77 $ 341 Options vested and expected to vest at December 31, 2018 4,230 $ 3.73 8.40 $ 861 The weighted-average grant-date fair value per share of stock options granted during the years ended December 31, 2018 and 2017 was $2.00 and $1.36, respectively. The aggregate intrinsic value of options at December 31, 2018 is based on the Company’s closing stock price on the last business day of 2018 of $2.29 per share. As of December 31, 2018, there was $5.1 million of unrecognized compensation expense for stock options which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.98 years. Restricted Stock Awards and Units The following table summarizes information about the restricted stock awards, restricted stock units and performance-based restricted units activity (in thousands, except as indicated and per share data): Shares Weighted average grant date fair value Weighted average remaining recognition period (in years) Unvested at December 31, 2017 2,000 $ 3.41 2.78 Awarded 1,924 $ 2.87 Vested (278 ) $ 4.00 Forfeited (376 ) $ 4.31 Unvested at December 31, 2018 3,270 $ 2.94 2.55 The weighted average fair value per share of awards granted during the years ended December 31, 2018 and 2017 was $2.87 and $2.96, respectively. As of December 31, 2018, there was $7.2 million of unrecognized compensation expense for restricted stock awards and units which is expected to be recognized on a straight-line basis over a weighted average period of approximately 2.55 years. Termination and Settlement of Elite Medical Holdings and Pac 3 Surgical Collaboration Agreement In February 2018, the Company reached a settlement agreement with Elite Medical Holdings and Pac 3 Surgical, pursuant to which the Company made a cash payment of $0.4 million as the final and total compensation under the original agreement. In addition, the parties agreed to release each other and waive any and all rights and claims arising from the original agreement. The Company recorded a gain of approximately $6.2 million during the year ended December 31, 2018, reflecting the reversal of accrued obligations previously recorded under the collaboration. 2017 Distributor Inducement Plan In December 2017, the Board of Directors approved and adopted the 2017 Distributor Inducement Plan which authorizes the Company to issue to distributors restricted shares of common stock of the Company and/or warrants to purchase the Company’s common stock. The warrants are issuable with an exercise price equal to the fair market value of the common stock on the date of issuance. Each warrant and common stock issuance is subject to a time-based or net sales-based vesting provision. The Board of Directors authorized the grant of up to 1,000,000 shares of common stock under the 2017 Distributor Inducement Plan. As of December 31, 2018, 0.3 million warrants and 17,000 shares of common stock were earned under the 2017 Distributor Inducement Plan. Total expense for the plan was $0.2 million for the year ended December 31, 2018. In December 2017, the Board of Directors also authorized grant of warrants to purchase 50,000 of the Company’s common stock, and 75,000 restricted stock units to a distributor. These warrants and restricted stock units are subject to time based and net sales based vesting conditions. 2017 Development Services Plan In December 2017, the Board of Directors approved and adopted the 2017 Development Services Plan which authorizes the Company to enter into Development Services Agreements with third-party individuals or entities whereby, upon the achievement of certain Company financial and commercial revenue milestones, future royalty payments for product and/or intellectual property development work may be paid in either cash or restricted shares of Company common stock at the option of the developer. Each common stock issuance would be subject to net sales-based vesting provisions and satisfaction of applicable laws and market regulations regarding the issuance of restricted shares to such developers. The Board of Directors authorized the grant of up to 3,000,000 shares of common stock under the 2017 Development Services Plan. As of December 31, 2018, 2.3 million have been designated under the 2017 Development Services Plan, but no common stock elections, grants or cash payouts have been made as of December 31, 2018. Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following (in thousands): December 31, 2018 Stock options outstanding 4,682 Unvested restricted stock awards 3,270 Employee stock purchase plan 226 Series A convertible preferred stock 2,022 Convertible notes 988 Warrants outstanding 22,302 Distributor and Development Services plans 4,000 Merger contingently issuable 887 Authorized for future grant under the Plans 1,061 39,438 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 12. Income Taxes The components of the pretax income (loss) from continuing operations are presented in the following table (in thousands): Year Ended December 31, 2018 2017 U.S. Domestic $ (30,169 ) $ (4,536 ) Foreign — (38 ) Pretax loss from operations $ (30,169 ) $ (4,574 ) The components of the (benefit) provision for income taxes from continuing operations are presented in the following table (in thousands): Year Ended December 31, 2018 2017 Current income tax (benefit) provision: Federal $ (64 ) $ (102 ) State 86 101 Foreign 4 3 Total current 26 2 Deferred income tax benefit: Federal (1,140 ) (36 ) State (247 ) — Total deferred (1,387 ) (36 ) Total income tax benefit $ (1,361 ) $ (34 ) The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income (loss) from continuing operations as a result of the following differences: December 31, 2018 2017 Federal statutory rate 21.00 % 35.00 % Adjustments for tax effects of: State taxes, net 0.47 % 7.40 % Stock-based compensation (4.29 )% (16.10 )% Foreign taxes — (1.20 )% Tax law change — (459.10 )% Fair market value adjustments (0.59 )% 92.10 % Other permanent adjustments (0.56 )% (1.30 )% Tax rate adjustment — 19.10 % Uncertain tax positions 0.30 % 4.90 % NOL expiration — (21.80 )% Other (1.57 )% — Valuation allowance (10.25 )% 341.80 % Effective income tax rate 4.51 % 0.80 % Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Accruals and reserves $ 1,133 $ 1,783 Income tax credit carryforwards 3,150 3,182 Interest 1,351 (126 ) Inventory 4,959 4,302 Legal settlement 4,693 6,881 Net operating losses 45,092 34,376 Stock-based compensation 1,182 1,542 Total deferred tax assets 61,560 51,940 Valuation allowance (46,578 ) (42,236 ) Total deferred tax assets, net of valuation allowance 14,982 9,704 Deferred tax liabilities: Property and equipment (21 ) 1,249 Goodwill and intangibles (1,972 ) 3,945 Investment in foreign partnership (13,370 ) (14,859 ) Total deferred tax liabilities (15,363 ) (9,665 ) Net deferred tax assets (liabilities) $ (381 ) $ 39 The realization of deferred tax assets is dependent on the Company’s ability to generate sufficient taxable income in future years in the associated jurisdiction to which the deferred tax assets relate. As of December 31, 2018, a valuation allowance of $46.6 million has been established against the net deferred tax assets as realization is uncertain. During the years ended December 31, 2018 and 2017, the federal and state valuation allowances collectively increased by $4.3 million and decreased by $13.8 million, respectively. In determining the need for a valuation allowance, the Company considers all available positive and negative evidence, including scheduled reversals of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. Based on the review of all positive and negative evidence, including a three-year cumulative pre-tax loss, the Company determined that a full valuation allowance should be recorded against its definite life deferred tax assets. As a result of the acquisition of SafeOp, the Company recorded an indefinite life deferred tax liability reduced to the extent of indefinite life deferred tax assets related to net operating loss and interest expense carryforward. At December 31, 2018, the Company has unrecognized tax benefits of $4.3 million of which $3.9 million will affect the effective tax rate if recognized when the Company no longer has a valuation allowance offsetting its deferred tax assets. The following table summarizes the changes to unrecognized tax benefits (in thousands): Year ended December 31, 2018 2017 Unrecognized tax benefit at the beginning of the year 4,440 9,331 (Deduction) additions based on tax positions related to the current year — (1,981 ) Additions based on tax positions related to the prior year — — Reductions as a result of lapse of applicable statute of limitations (106 ) (551 ) Reductions as a result of tax rate changes — (236 ) Reductions as a result of foreign exchange rates and other — (2,123 ) Unrecognized tax benefits at the end of the year $ 4,334 $ 4,440 The Company and its subsidiaries are subject to federal income tax as well as income tax of multiple state and foreign jurisdictions. With few exceptions, the Company is no longer subject to income tax examination by tax authorities in major jurisdictions for years prior to 2014. However, to the extent allowed by law, the taxing authorities may have the right to examine prior periods where net operating losses and tax credits were generated and carried forward and make adjustments up to the amount of the carryforwards. The Company is not currently under examination by the Internal Revenue Service, foreign or state and local tax authorities. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. As of December 31, 2018, there were no accrued interest and penalties. At December 31, 2018, the Company had federal and state net operating loss carryforwards of $172.2 million and $106.7 million, respectively, expiring at various dates beginning in 2018 through 2038. Net operating losses generated in years ending after December 31, 2017 can be carried forward indefinitely for federal and some states. At December 31, 2018, the Company had federal and state research and development tax credit carryforwards of $3.4 million and $3.1 million, respectively. The federal research and development tax credits expire at various dates beginning in 2018 through 2038, while the state credits do not expire. Utilization of the net operating loss and tax credit carryforwards may become subject to annual limitations due to ownership change limitations that could occur in the future as provided by Section 382 of the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”), as well as similar state provisions. These ownership changes may limit the amount of the net operating loss and tax credit carryforwards that can be utilized annually to offset future taxable income. The Tax Cuts and Jobs Act ("Act") was enacted on December 22, 2017. The tax impact of the Act was estimated in the year ended December 31, 2017. This mainly included the corporate tax rate reduction from 35% to 21% which resulted in a remeasurement of deferred tax assets which was fully offset by a full valuation allowance. The tax impact of the Act has not materially changed in the year ending December 31, 2018. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 13. Related Party Transactions In July 2016, the Company entered into a forbearance agreement with HealthpointCapital, LLC, HealthpointCapital Partners, L.P., and HealthpointCapital Partners II, L.P. (collectively, "HealthpointCapital"), pursuant to which HealthpointCapital, on behalf of the Company, paid $1.0 million of the $1.1 million payment due and payable by the Company to Orthotec on July 1, 2016 and agreed to not exercise its contractual rights to seek an immediate repayment of such amount. Pursuant to this forbearance agreement, the Company repaid this amount in September 2016. The Company and HealthpointCapital also entered into an agreement for joint payment of settlement whereby HealthpointCapital has agreed to contribute $5 million to the $49 million Orthotec settlement amount. During the second quarter of 2018, HealthpointCapital Partners, L.P., and HealthpointCapital Partners II, L.P. distributed its holdings in the Company’s common stock to its limited partners. As a result, the fund is no longer a shareholder of the Company as of December 31, 2018. The $5 million receivable from HealthpointCapital, LLC continues to be classified within stockholders’ equity on the Company’s consolidated balance sheet due to the related party nature with HealthpointCapital affiliates. Certain of the Company’s board of directors and senior management participated in the March 2017 and 2018 private placem Included on the consolidated balance sheet as of December 31, 2018 is a $0.3 million officer receivable for settlement of a tax liability related to the vesting of restricted common stock. A corresponding liability for the same amount is also included on the consolidated balance sheet within the accrued expenses line item. Subsequent to December 31, 2018, the amounts were settled and remitted to settle the tax liability. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2018 | |
Compensation And Retirement Disclosure [Abstract] | |
Retirement Plan | 14. Retirement Plan The Company maintains an employee savings plan that qualifies as a deferred salary arrangement under Section 401(k) of the Internal Revenue Code. Under the savings plan, participating employees may contribute a portion of their pre-tax earnings, up to the Internal Revenue Service annual contribution limit. Additionally, the Company may elect to make matching contributions into the savings plan at its sole discretion of up to 4% of each individual’s compensation. Matching contributions vest after one year of service. The Company’s total contributions to the 401(k) plan were $0.6 million and $0.2 million for the years ended December 31, 2018 and 2017, respectively. |
Restructuring Activities
Restructuring Activities | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Activities | 15. Restructuring Activities In connection with the sale of the International Business (described in Note 4), the Company terminated employment agreements with several executive officers, including the chief executive officer and the chief financial officer, and commenced an employee headcount reduction program. In conjunction with the restructuring program, the Company recorded restructuring expenses related to severance liabilities and post-employment benefits. A rollforward of the accrued restructuring liability is presented below (in thousands): Balance at January 1, 2018 $ 520 Accrued restructuring charges 1,381 Payments (1,191 ) Balance at December 31, 2018 $ 710 All activities and costs are expected to be completed during 2019. Additionally, on July 6, 2015, the Company announced a restructuring of its manufacturing operations in California in an effort to improve its cost structure. The restructuring included a reduction in workforce and closing the California manufacturing facility in 2017. Additionally, the Company recorded restructuring expenses related to severance and post-employment benefits in the year ended December 31, 2017 related to its U.S. workforce reduction in connection with the Globus Transaction. |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | 16. Subsequent Event Series A Conversions During the first quarter of 2019, an additional 3,715 shares of Series A Convertible Preferred Stock were converted into 1,857,586 shares of common stock. As of March 1, 2019, there were 328 shares of Series A Convertible Preferred Stock outstanding, which are convertible into 164,087 shares of common stock Expanded Credit Facility with Squadron On March 27, 2019, the Company closed on an Expanded Credit Facility with Squadron for up to $30 million in additional secured financing. This additional financing will be made available under the Company’s existing credit facility with Squadron. At such time as the Company makes its first draw under the Expanded Credit Facility, the Company will issue to Squadron warrants to purchase 4.8 million shares of the Company’s common stock at an exercise price of $2.17 per share . |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to such estimates and assumptions include the useful lives of property and equipment, intangibles, allowances for doubtful accounts, the valuation of share based liabilities, deferred tax assets, inventory, stock-based compensation, revenues, restructuring liabilities, income tax uncertainties, the acquired value of the SafeOp assets and liability acquired, contingent consideration related to the SafeOp acquisition and other contingencies. |
Concentrations of Credit Risk and Significant Customers | Concentrations of Credit Risk and Significant Customers Financial instruments, which potentially subject the Company to concentrations of credit risk, consist primarily of cash and accounts receivable. The Company limits its exposure to credit loss by depositing its cash with established financial institutions. As of December 31, 2018, a substantial portion of the Company’s available cash funds is held in business accounts. Although the Company deposits its cash with multiple financial institutions, its deposits, at times, may exceed federally insured limits. The Company’s customers are primarily hospitals, surgical centers and distributors, and no one single customer represented greater than 10 percent of consolidated revenues and accounts receivable for any of the periods presented. Credit to customers is granted based on an analysis of the customers’ credit worthiness. Credit losses have not been significant. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue from product sales in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements. The Company derives its revenues primarily from the sale of spinal surgery implants used in the treatment of spine disorders. The Company sells its products primarily through its direct sales force and independent distributors. Revenue is recognized when control of the promised goods is transferred to the customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods. Transfer of control generally occurs when the Company receives the written acknowledgment that the product has been used in a surgical procedure or upon shipment to third-party customers who immediately accept title to such product. The Company’s accounts year |
Accounts Receivable, net | Accounts Receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Company makes judgments as to its ability to collect outstanding receivables and provides allowances for a portion of receivables when collection becomes doubtful. Provisions are made based upon a specific review of all significant outstanding invoices and the overall quality and age of those invoices not specifically reviewed. In determining the provision for invoices not specifically reviewed, the Company analyzes historical collection experience. If the historical data used to calculate the allowance provided for doubtful accounts does not reflect the Company’s future ability to collect outstanding receivables or if the financial condition of customers were to deteriorate, resulting in impairment of their ability to make payments, an increase in the provision for doubtful accounts may be required. |
Inventories, net | Inventories, net Inventories are stated at the lower of cost or net realizable value, with cost primarily determined under the first-in, first-out method. The Company reviews the components of inventory on a periodic basis for excess, obsolete and impaired inventory, and records a reserve for the identified items. The Company calculates an inventory reserve for estimated excess and obsolete inventory based upon historical turnover and assumptions about future demand for its products and market conditions. The Company’s biologics inventories have an expiration based on shelf life and are subject to demand fluctuations based on the availability and demand for alternative implant products. The Company’s estimates and assumptions for excess and obsolete inventory are reviewed and updated on a quarterly basis. Increases in the reserve for excess and obsolete inventory result in a corresponding increase to cost of revenues and establish a new cost basis for the part. |
Property and Equipment, net | Property and Equipment, net Property and equipment are stated at cost, net of accumulated depreciation and amortization. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets, generally ranging from three to seven years. Leasehold improvements and assets acquired under capital leases are amortized over the shorter of their useful lives or the remaining terms of the related leases. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The Company’s goodwill represents the excess of the cost over the fair value of net assets acquired from its business combination with SafeOp. The determination of the value of goodwill and intangible assets arising from its business combination and asset acquisitions requires extensive use of accounting estimates and judgments to allocate the purchase price to the fair value of the net tangible and intangible assets acquired, including capitalized Intangible assets acquired in a business combination that are used for in-process research and development activities are considered indefinite lived until the completion or abandonment of the associated research and development efforts. Upon reaching the end of the relevant research and development project, the Company will amortize the acquired IPR&D over its estimated useful life or expense the acquired in-process research and development should the research and development project be unsuccessful with no future alternative use. Goodwill and IPR&D are not amortized; however, they are assessed for impairment using fair value measurement techniques on an annual basis or more frequently if facts and circumstance warrant such a review. The goodwill or IPR&D are considered to be impaired if the Company determines that the carrying value of the reporting unit or IPR&D exceeds its respective fair value. The Company performs its annual impairment analysis by comparing the Company’s estimated fair value, calculated from t he Company’s market capitalization, The Company completed its most recent annual evaluation for impairment as of December 31, 2018 and determined that no impairment existed and, consequently, no impairment charge has been recorded during the year Intangible assets with a finite life, such as acquired technology, customer relationships, manufacturing know-how, licensed technology, supply agreements and certain trade names and trademarks, are amortized on a straight-line basis over their estimated useful life, ranging from one to twenty-year period. In determining the useful lives of intangible assets, the Company considers the expected use of the assets and the effects of obsolescence, demand, competition, anticipated technological advances, changes in surgical techniques, market influences and other economic factors. For technology based intangible assets, the Company considers the expected life cycles of products which incorporate the corresponding technology. Trademarks and trade names that are related to products are assigned lives consistent with the period in which the products bearing each brand are expected to be sold. The Company evaluates its intangible assets with finite lives for indications of impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Factors that could trigger an impairment review include significant under-performance relative to expected historical or projected future operating results, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business or significant negative industry or economic trends. If this evaluation indicates that the value of the intangible asset may be impaired, the Company makes an assessment of the recoverability of the net carrying value of the asset over its remaining useful life. If this assessment indicates that the intangible asset is not recoverable, based on the estimated undiscounted future cash flows of the technology over the remaining amortization period, the Company reduces the net carrying value of the related intangible asset to fair value and may adjust the remaining amortization period. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for indicators of impairment. The Company amortizes its intangible assets on a straight-line basis over a one to twenty-year period. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company assesses potential impairment to its long-lived assets when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when the carrying amount of the long-lived assets is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Any required impairment loss is measured as the amount by which the carrying amount of a long-lived asset exceeds its fair value and is recorded as a reduction in the carrying value of the related asset and a charge to operating results. There were no impairment charges in 2018 or 2017. |
Warrants to Purchase Common Stock | Warrants to Purchase Common Stock Warrants are accounted for in accordance with the applicable accounting guidance as either derivative liabilities or as equity instruments depending on the specific terms of the agreements. Liability-classified instruments are recorded at fair value at each reporting period with any change in fair value recognized as a component of change in fair value of derivative liabilities in the consolidated statements of operations. The Company estimated liability classified instruments using the Black Scholes model, which required management to develop assumptions and inputs that have significant impact on such valuations. The Company periodically evaluates changes in facts and circumstances that could impact the classification of warrants. in the event of a Fundamental Transaction, as defined in such warrants (other than a Fundamental Transaction not approved by the Company’s Board of Directors). From March 29, 2017, the issuance date, to September 30, 2017, the warrant holders did not control the Company’s Board of Directors, and therefore, the Company’s control, the warrants As of December 31, 2018 and throughout the year ended December 31, 2018, all warrants are classified within stockholders’ equity. |
Fair Value Measurements | Fair Value Measurements The carrying amount of financial instruments consisting of cash, trade accounts receivable, prepaid expenses and other current assets, accounts payable, accrued expenses, accrued compensation and current portion of long-term debt included in the Company’s consolidated financial statements are reasonable estimates of fair value due to their short maturities. Based on the borrowing rates currently available to the Company for loans with similar terms, management believes the fair value of long-term debt approximates its carrying value. Authoritative guidance establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: Level 1: Level 2: Level 3: The Company does not maintain any financial assets that are considered to be Level 1, Level 2 or Level 3 instruments as of December 31, 2018. The fair value of the contingent consideration liability assumed in the SafeOp acquisition is recorded as part of the purchase price consideration of the acquisition. using a probability-weighted income approach, utilizing significant unobservable inputs including the probability of achieving each of the potential milestones and an estimated discount rate related to the risks of the expected cash flows attributable to the milestones. The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2017 and 2018 (in thousands): Level 3 Liabilities Balance at December 31, 2016 $ — Transfer from equity 29,413 Changes in fair value (12,044 ) Exercises (2,311 ) Transfer to equity (15,058 ) Balance at December 31, 2017 — Contingent consideration liability recorded upon acquisition of SafeOp 3,200 Settlement of milestone #1 (1,446 ) Change in fair value measurement 846 Balance at December 31, 2018 $ 2,600 The common stock warrant liabilities for the year ended December 31, 2017 were measured at fair value using the Black-Scholes option pricing valuation model. The assumptions used in the Black-Scholes option pricing valuation model for the common stock warrant liabilities were: (a) a risk-free interest rate based on the rates for U.S. Treasury zero-coupon bonds with maturities similar to those of the remaining contractual term of the warrants; (b) an assumed dividend yield of zero based on the Company’s expectation that it will not pay dividends in the foreseeable future; (c) an expected term based on the remaining contractual term of the warrants; and (d) an expected volatility based upon the Company's historical volatility over the remaining contractual term of the warrants. |
Research and Development | Research and Development Research and development expense consists of costs associated with the design, development, testing, and enhancement of the Company’s products. Research and development costs also include salaries and related employee benefits, research-related overhead expenses, fees paid to external service providers. Research and development costs are expensed as incurred. |
Transaction-related Expenses | Transaction-related Expenses The Company expensed certain costs related to the SafeOp acquisition, which primarily include third-party advisory and legal fees . |
Litigation-related Expenses | Litigation-related Expenses Litigation-related expenses are costs incurred for the ongoing litigation, primarily with NuVasive, Inc . See Note 6 for further information. |
Leases | Leases The Company leases its facilities and certain equipment and vehicles under operating leases, and certain equipment under capital leases. For facility leases that contain rent escalation or rent concession provisions, the Company records the total rent payable during the lease term on a straight-line basis over the term of the lease. The Company records the difference between the rent paid and the straight-line rent within accrued expenses in the accompanying consolidated balance sheets. |
Product Shipment Cost | Product Shipment Cost Product shipment costs are included in sales and marketing expense in the accompanying consolidated statements of operations. Product shipment costs totaled $2.5 million and $2.3 million for the years ended December 31, 2018 and 2017, respectively. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation under provisions which require that share-based payment transactions with employees be recognized in the financial statements based on their fair value and recognized as compensation expense over the vesting period. The amount of expense recognized during the period is affected by subjective assumptions, including estimates of the future volatility of the Company’s stock price, the expected term for its stock options, the number of options expected to ultimately vest, and the timing of vesting for the Company’s share-based awards. The Company uses a Black-Scholes option pricing valuation model to estimate the fair value of its stock option awards. The calculation of the fair value of the awards using the Black-Scholes option pricing model is affected by the Company’s common stock price on the date of grant as well as assumptions regarding the following: • Estimated volatility is a measure of the amount by which the Company’s common stock price is expected to fluctuate each year during the expected life of the award. The Company’s estimated volatility through December 31, 2018 was based on a weighted-average volatility of its actual historical volatility over a period equal to the expected life of the awards. • The expected term represents the period of time that awards granted are expected to be outstanding. Through December 31, 2018, the Company calculated the expected term using a weighted-average term based on historical exercise patterns and the term from option date to full exercise for the options granted within the specified date range. • The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond on the date the stock option award is granted with a maturity equal to the expected term of the stock option award. • The assumed dividend yield is based on the Company’s expectation of not paying dividends in the foreseeable future. The Company used historical data to estimate the number of future stock option forfeitures. Stock-based compensation recorded in the Company’s consolidated statement of operations is based on awards expected to ultimately vest and has been reduced for estimated forfeitures. The Company’s estimated forfeiture rates may differ from its actual forfeitures which would affect the amount of expense recognized during the period. The Company accounts for stock option grants to non-employees in accordance with provisions which require that the fair value of these instruments be recognized as an expense over the period in which the related services are rendered. Stock-based compensation expense of awards with performance conditions is recognized over the period from the date the performance condition is determined to be probable of occurring through the time the applicable condition is met. Determining the likelihood and timing of achieving performance conditions is a subjective judgment made by management which may affect the amount and timing of expense related to these share-based awards. Share-based compensation is adjusted to reflect the value of options which ultimately vest as such amounts become known in future periods. Stock-based awards with market conditions are valued using the Monte Carlo valuation technique which requires management to make significant estimates and assumptions that are not observable from the market. Stock based compensation for awards with both service and market conditions are recognized on a straight line basis over the longer of the derived service period or the requisite service period. |
Valuation of Stock Option Awards | Valuation of Stock Option Awards The weighted average assumptions used to compute the stock-based compensation costs for the stock options granted during the years ended December 31, 2018 and 2017 are as follows: Year Ended December 31, 2018 2017 Risk-free interest rate 2.85 % 2.01 % Expected dividend yield — — Weighted average expected life (years) 6.08 6.02 Volatility 78.54 % 78.52 % |
Stock-Based Compensation Costs | Stock-Based Compensation Costs The compensation cost that has been included in the Company’s consolidated statement of operations for all stock-based compensation arrangements is detailed as follows (in thousands): Year Ended December 31, 2018 2017 Cost of revenues $ 73 $ 40 Research and development 482 206 Sales, general and administrative 4,749 3,735 Total $ 5,304 $ 3,981 |
Income Taxes | Income Taxes The Company accounts for income taxes in accordance with provisions which set forth an asset and liability approach that requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. In making such determination, a review of all available positive and negative evidence must be considered, including scheduled reversal of deferred tax liabilities, projected future taxable income, tax planning strategies, and recent financial performance. The Company recognizes interest and penalties related to uncertain tax positions as a component of the income tax provision. |
Beneficial Conversion Feature - Series B Preferred Stock | Beneficial Conversion Feature – Series B Preferred Stock In March 2018, the Company completed a private placement of equity securities to certain institutional and accredited investors, providing for the sale by the Company of newly designated Series B Convertible Preferred Stock, which shares of preferred stock were automatically converted into 14.3 million shares of our common stock upon approval by the Company’s stockholders. As the Series B Convertible Preferred Stock provided the holder the benefit to convert to shares of common stock, a beneficial conversion feature (“BCF”) with a calculated intrinsic fair value at issuance of $13.5 million existed as of the date the shares of Series B Convertible Preferred Stock were able to be converted into shares of common stock. This one-time, non-cash deemed dividend impacts net loss attributable to common stockholders and net loss per share on the Company’s consolidated statement of operations for the year ended December 31, 2018 |
Net Loss per Share | Net Loss per Share Basic earnings per share (“EPS”) is calculated by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period without consideration for common stock equivalents. Diluted EPS is computed by dividing the net income or loss available to common stockholders by the weighted average number of shares of common stock outstanding for the period and the weighted average number of dilutive common stock equivalents outstanding for the period determined using the treasury-stock method. For purposes of this calculation, common stock subject to repurchase by the Company, common stock issuable upon conversion of preferred shares, options and warrants are considered to be common stock equivalents and are only included in the calculation of diluted earnings per share when their effect is dilutive. The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share data): Year Ended December 31, 2018 2017 Net loss attributable to common shareholders Continuing operations Discontinued operations Numerator: Net (loss) income, basic $ (42,463 ) $ (4,540 ) $ 2,246 Change in fair value of warrants — 12,044 — Net (loss) income, diluted $ (42,463 ) $ (16,584 ) $ 2,246 Denominator: Weighted average common shares outstanding 35,402 12,827 12,827 Weighted average unvested common shares subject to repurchase (87 ) (39 ) (39 ) Weighted average common shares outstanding - basic 35,315 12,788 12,788 Dilutive impact of warrants — 494 494 Weighted average common shares outstanding - diluted 35,315 13,282 13,282 Basic net (loss) income per share $ (1.20 ) $ (0.36 ) $ 0.18 Diluted net (loss) income per share $ (1.20 ) $ (1.25 ) $ 0.17 The anti-dilutive securities not included in diluted net loss per share were as follows calculated on a weighted average basis Year Ended December 31, 2018 2017 Options to purchase common stock 330 3,156 Warrants to purchase common stock 1,860 1,204 Series A convertible preferred stock 2,141 3,829 Unvested restricted stock awards 87 39 Convertible notes 761 — 5,179 8,228 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Recently Adopted Accounting Pronouncements In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , as modified by subsequently issued ASUs 2015-14, 2016-08, 2016-10, 2016-12 and 2016-20 (collectively “ASU 2014-09”). ASU 2014-09 superseded existing revenue recognition standards with a single model unless those contracts are within the scope of other standards. The revenue recognition principle in ASU 2014-09 is that an entity should recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company adopted the new standard effective January 1, 2018 using the modified retrospective approach applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported in accordance with the historic accounting under ASC 605. The adoption of ASU 2014-09 did not have a material cumulative impact on the Company’s consolidated financial statements as of January 1, 2018. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments The adoption did not have a material cumulative impact on the Company’s consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Clarifying the Definition of a Business In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation , to provide clarity and reduce both 1) diversity in practice and 2) cost and complexity when applying the guidance in Topic 718 to a change in the terms or conditions of a share-based payment award. ASU 2017-09 provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting under Topic 718. The amendments in ASU 2017-09 are effective for fiscal and interim reporting periods in fiscal years beginning after December 15, 2017. Early adoption is permitted, including adoption in any interim period. The amendments in ASU 2017-09 should be applied prospectively to an award modified on or after the adoption date. The adoption did not have a material cumulative impact on the Company’s consolidated financial statements. In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260); Distinguishing Liabilities from Equity (Topic 480); Derivatives and Hedging (Topic 815): (Part I) Accounting for Certain Financial Instruments with Down Round Features, (Part II) Replacement of the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Non-Controlling Interests with a Scope Exception. The ASU allows companies to exclude a down round feature when determining whether a financial instrument (or embedded conversion feature) is considered indexed to the entity’s own stock. As a result, financial instruments (or embedded conversion features) with down round features may no longer be required to be classified as liabilities. A company will recognize the value of a down round feature only when it is triggered and the strike price has been adjusted downward. For equity-classified freestanding financial instruments, such as warrants, an entity will treat the value of the effect of the down round, when triggered, as a dividend and a reduction of income available to common shareholders in computing basic earnings per share. For convertible instruments with embedded conversion features containing down round provisions, entities will recognize the value of the down round as a beneficial conversion discount to be amortized to earnings. The guidance in ASU 2017-11 is effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. Early adoption is permitted, and the guidance is to be applied using a full or modified retrospective approach. The Company early adopted the guidance in conjunction with the 2018 Private Placement. As no instruments with down round protection were held prior to the 2018 Private Placement, a cumulative effect change was not recognized upon adoption. In June 2018, the FASB issued ASU 2018-07, Compensation-Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting The Company early adopted the guidance during the second quarter of 2018. The adoption did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02 , Leases (Topic 842) the Company will elect the optional transition method to account for the impact of the adoption with a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The Company expects to elect certain practical expedients permitted under the transition guidance. The Company will record a right-of-use asset and liability upon adoption of the guidance pertaining to its long-term real estate lease for its corporate facilities. The Company is currently finalizing its review of contracts and may identify additional embedded leases and additional amounts to be recorded. In January 2017, the FASB issued ASU 2017-04, Intangibles – Goodwill and Other |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Reconciliation of liabilities measured at fair value using significant unobservable inputs | The following table provides a reconciliation of liabilities measured at fair value using significant unobservable inputs (Level 3) for the year ended December 31, 2017 and 2018 (in thousands): Level 3 Liabilities Balance at December 31, 2016 $ — Transfer from equity 29,413 Changes in fair value (12,044 ) Exercises (2,311 ) Transfer to equity (15,058 ) Balance at December 31, 2017 — Contingent consideration liability recorded upon acquisition of SafeOp 3,200 Settlement of milestone #1 (1,446 ) Change in fair value measurement 846 Balance at December 31, 2018 $ 2,600 |
Summary of weighted average assumptions used to compute stock-based compensation costs for stock options granted | The weighted average assumptions used to compute the stock-based compensation costs for the stock options granted during the years ended December 31, 2018 and 2017 are as follows: Year Ended December 31, 2018 2017 Risk-free interest rate 2.85 % 2.01 % Expected dividend yield — — Weighted average expected life (years) 6.08 6.02 Volatility 78.54 % 78.52 % |
Summary of compensation cost for stock-based compensation arrangements | The compensation cost that has been included in the Company’s consolidated statement of operations for all stock-based compensation arrangements is detailed as follows (in thousands): Year Ended December 31, 2018 2017 Cost of revenues $ 73 $ 40 Research and development 482 206 Sales, general and administrative 4,749 3,735 Total $ 5,304 $ 3,981 |
Computation of Basic and Diluted Loss Per Share | The following table sets forth the computation of basic and diluted loss per share (in thousands, except per share data): Year Ended December 31, 2018 2017 Net loss attributable to common shareholders Continuing operations Discontinued operations Numerator: Net (loss) income, basic $ (42,463 ) $ (4,540 ) $ 2,246 Change in fair value of warrants — 12,044 — Net (loss) income, diluted $ (42,463 ) $ (16,584 ) $ 2,246 Denominator: Weighted average common shares outstanding 35,402 12,827 12,827 Weighted average unvested common shares subject to repurchase (87 ) (39 ) (39 ) Weighted average common shares outstanding - basic 35,315 12,788 12,788 Dilutive impact of warrants — 494 494 Weighted average common shares outstanding - diluted 35,315 13,282 13,282 Basic net (loss) income per share $ (1.20 ) $ (0.36 ) $ 0.18 Diluted net (loss) income per share $ (1.20 ) $ (1.25 ) $ 0.17 |
Weighted-average anti-dilutive securities not included in diluted net loss per share | The anti-dilutive securities not included in diluted net loss per share were as follows calculated on a weighted average basis Year Ended December 31, 2018 2017 Options to purchase common stock 330 3,156 Warrants to purchase common stock 1,860 1,204 Series A convertible preferred stock 2,141 3,829 Unvested restricted stock awards 87 39 Convertible notes 761 — 5,179 8,228 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Balance Sheet Related Disclosures [Abstract] | |
Accounts receivable, net | Accounts receivable consist of the following (in thousands): December 31, 2018 2017 Accounts receivable $ 15,291 $ 15,328 Less allowance for doubtful accounts (196 ) (506 ) Accounts receivable, net $ 15,095 $ 14,822 |
Inventories, net | Inventories consist of the following (in thousands): December 31, 2018 2017 Raw materials $ 5,813 $ 4,969 Work-in-process 952 502 Finished goods 40,165 37,933 46,930 43,404 Less reserve for excess and obsolete (18,165 ) (16,112 ) Inventories, net $ 28,765 $ 27,292 |
Property and equipment, net | Property and equipment consist of the following (in thousands except for useful lives): Useful lives December 31, (in years) 2018 2017 Surgical instruments 4 $ 54,848 $ 53,198 Machinery and equipment 7 5,971 5,503 Computer equipment 3 3,104 3,500 Office furniture and equipment 5 1,155 2,794 Leasehold improvements various 1,765 1,714 Construction in progress n/a 92 336 66,935 67,045 Less accumulated depreciation and amortization (53,700 ) (54,375 ) Property and equipment, net $ 13,235 $ 12,670 |
Intangible assets, net | In conjunction with the acquisition of SafeOp in March 2018, the Company recorded $21.6 million of new intangible assets. See Note 8 for further information regarding the acquisition. Intangible assets, net consist of the following (in thousands, except as indicated): Remaining Avg. Useful lives December 31, (in years) 2018 2017 Developed product technology 10 $ 26,976 $ 13,876 Intellectual property — 1,004 1,004 License agreements 1 5,064 5,738 Trademarks and trade names — 792 732 Customer-related 5 7,458 7,458 Distribution network 4 4,027 4,027 In process research and development 19 8,800 — 54,121 32,835 Less accumulated amortization (27,713 ) (27,587 ) Intangible assets, net $ 26,408 $ 5,248 |
Schedule of intangible assets, future expected amortization expense | Future amortization expense related to intangible assets as of December 31, 2018 is as follows (in thousands): Year Ending December 31, 2019 $ 1,566 2020 1,890 2021 1,890 2022 1,890 2023 1,890 Thereafter 17,282 Total $ 26,408 |
Accrued expenses | Accrued expenses consist of the following (in thousands): December 31, 2018 2017 Commissions and sales milestones $ 3,594 $ 3,360 Payroll and payroll related 3,222 2,968 Litigation settlement obligation 4,400 4,400 Professional fees 2,637 1,484 Royalties 1,354 1,269 Restructuring and severance accruals 710 520 Taxes (3 ) 246 Guaranteed collaboration compensation, current — 4,485 Interest 261 376 Acquisition related - contingent consideration 2,600 — Other 3,541 3,138 Total accrued expenses $ 22,316 $ 22,246 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-term debt consists of the following (in thousands): December 31, 2018 2017 Amended Credit Facility and Term Loan with MidCap $ 11,010 $ 12,674 Globus Facility Agreement — 30,000 Squadron Term Loan 35,000 — Notes payable 296 200 Convertible note 3,000 — Total 49,306 42,874 Add: capital leases 126 222 Less: debt discount (3,857 ) (2,023 ) Total 45,575 41,073 Less: current portion of long-term debt (3,276 ) (3,306 ) Total long-term debt, net of current portion $ 42,299 $ 37,767 |
Principal Payments on Debt | Principal payments on debt are as follows as of December 31, 2018 (in thousands): Year Ending December 31, 2019 $ 3,250 2020 47 2021 2,414 2022 15,148 2023 and thereafter 28,447 Total 49,306 Add: capital lease principal payments 126 Less: debt discount (3,857 ) Total 45,575 Less: current portion of long-term debt (3,276 ) Long-term debt, net of current portion $ 42,299 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future minimum annual lease payments | Future minimum annual lease payments under the Company’s operating and capital leases are as follows (in thousands): Year ending December 31, Operating Capital 2019 $ 1,684 $ 34 2020 1,688 37 2021 1,009 37 2022 — 37 2023 and thereafter — — 4,381 145 Less: amount representing interest (19 ) Present value of minimum lease payments 126 Current portion of capital leases (34 ) Capital leases, less current portion $ 92 |
Acquisition of SafeOp Surgica_2
Acquisition of SafeOp Surgical, Inc. (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Business Combinations [Abstract] | |
Schedule of Unaudited Pro Forma Operations | The Merger was accounted for using the acquisition method of accounting. The following unaudited pro forma results of operations assume that the Company acquired SafeOp on January 1, 2018 and 2017, respectively (in thousands). Year Ended December 31, 2018 2017 Revenue $ 91,694 $ 101,981 Loss from continuing operations (29,493 ) (8,776 ) Net loss $ (28,975 ) $ (6,530 ) Net loss per share, basic and diluted $ (0.69 ) $ (0.35 ) |
Schedule of Total Purchase Price | The total purchase price is presented below (in thousands): Cash paid $ 15,103 Common stock issued 10,879 Note 3,000 Warrants 1,650 Contingent consideration issued or issuable 3,200 Total $ 33,832 |
Schedule of Allocation of Purchase Price | The allocation of the purchase price to the assets acquired and liabilities assumed based on their fair values, is as follows (in thousands): Assets acquired: Accounts receivable $ 40 Inventory 192 Prepaid expenses and other current assets 89 Total current assets $ 321 Property and equipment, net 20 Other long-term assets 5 IPR&D 8,400 EPAD Tradename 60 Developed Technology 13,100 Total assets $ 21,906 Liabilities assumed: Accounts payable $ 55 Accrued expenses 148 Deferred tax liability 1,768 Total liabilities $ 1,971 Goodwill 13,897 Total consideration transferred $ 33,832 |
Equity (Tables)
Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Summary of Outstanding Warrants | A summary of all outstanding warrants is as follows: Number of Warrants Strike Price 2017 Common Stock Warrants 3,757,000 $ 2.00 2017 Banker Warrants 167,418 $ 2.50 2018 Common Stock Warrants 13,996,851 $ 3.50 Merger Warrants 2,200,000 $ 3.50 Executive 1,327,434 $ 5.00 Squadron Capital 845,000 $ 3.15 Other 7,812 $ 19.20 Total 22,301,515 A summary of all outstanding warrants is as follows: Number of Warrants Strike Price 2017 Common Stock Warrants 3,757,000 $ 2.00 2017 Banker Warrants 167,418 $ 2.50 2018 Common Stock Warrants 13,996,851 $ 3.50 Merger Warrants 2,200,000 $ 3.50 Executive 1,327,434 $ 5.00 Squadron Capital 845,000 $ 3.15 Other 7,812 $ 19.20 Total 22,301,515 A summary of all outstanding warrants is as follows: Number of Warrants Strike Price 2017 Common Stock Warrants 3,757,000 $ 2.00 2017 Banker Warrants 167,418 $ 2.50 2018 Common Stock Warrants 13,996,851 $ 3.50 Merger Warrants 2,200,000 $ 3.50 Executive 1,327,434 $ 5.00 Squadron Capital 845,000 $ 3.15 Other 7,812 $ 19.20 Total 22,301,515 |
Stock Benefit Plans and Stock_2
Stock Benefit Plans and Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Stock Option Activity | A summary of the Company’s stock option activity under the Plans and related information is as follows (in thousands, except as indicated and per share data): Shares Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value Outstanding at December 31, 2017 3,156 $ 4.31 8.28 $ 1,841 Granted 2,298 $ 2.88 Exercised (14 ) $ 1.81 Forfeited (758 ) $ 4.12 Outstanding at December 31, 2018 4,682 $ 3.64 8.46 $ 919 Options vested and exercisable at December 31, 2018 1,249 $ 6.34 6.77 $ 341 Options vested and expected to vest at December 31, 2018 4,230 $ 3.73 8.40 $ 861 |
Summary of Information about Restricted Stock Awards, Restricted Stock Units and Performance-Based Restricted Units Activity (Detail) | The following table summarizes information about the restricted stock awards, restricted stock units and performance-based restricted units activity (in thousands, except as indicated and per share data): Shares Weighted average grant date fair value Weighted average remaining recognition period (in years) Unvested at December 31, 2017 2,000 $ 3.41 2.78 Awarded 1,924 $ 2.87 Vested (278 ) $ 4.00 Forfeited (376 ) $ 4.31 Unvested at December 31, 2018 3,270 $ 2.94 2.55 |
Summary of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance consists of the following (in thousands): December 31, 2018 Stock options outstanding 4,682 Unvested restricted stock awards 3,270 Employee stock purchase plan 226 Series A convertible preferred stock 2,022 Convertible notes 988 Warrants outstanding 22,302 Distributor and Development Services plans 4,000 Merger contingently issuable 887 Authorized for future grant under the Plans 1,061 39,438 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Components of Pretax Income (Loss) from Continuing Operations | The components of the pretax income (loss) from continuing operations are presented in the following table (in thousands): Year Ended December 31, 2018 2017 U.S. Domestic $ (30,169 ) $ (4,536 ) Foreign — (38 ) Pretax loss from operations $ (30,169 ) $ (4,574 ) |
Components of (Benefit) Provision for Income Taxes from Continuing Operations | The components of the (benefit) provision for income taxes from continuing operations are presented in the following table (in thousands): Year Ended December 31, 2018 2017 Current income tax (benefit) provision: Federal $ (64 ) $ (102 ) State 86 101 Foreign 4 3 Total current 26 2 Deferred income tax benefit: Federal (1,140 ) (36 ) State (247 ) — Total deferred (1,387 ) (36 ) Total income tax benefit $ (1,361 ) $ (34 ) |
Schedule of Effective Income Tax Rate Reconciliation | The provision for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory federal income tax rate to pretax income (loss) from continuing operations as a result of the following differences: December 31, 2018 2017 Federal statutory rate 21.00 % 35.00 % Adjustments for tax effects of: State taxes, net 0.47 % 7.40 % Stock-based compensation (4.29 )% (16.10 )% Foreign taxes — (1.20 )% Tax law change — (459.10 )% Fair market value adjustments (0.59 )% 92.10 % Other permanent adjustments (0.56 )% (1.30 )% Tax rate adjustment — 19.10 % Uncertain tax positions 0.30 % 4.90 % NOL expiration — (21.80 )% Other (1.57 )% — Valuation allowance (10.25 )% 341.80 % Effective income tax rate 4.51 % 0.80 % |
Significant Components of Company's Deferred Tax Assets and Liabilities | Significant components of the Company’s deferred tax assets and liabilities as of December 31, 2018 and 2017 are as follows (in thousands): December 31, 2018 2017 Deferred tax assets: Accruals and reserves $ 1,133 $ 1,783 Income tax credit carryforwards 3,150 3,182 Interest 1,351 (126 ) Inventory 4,959 4,302 Legal settlement 4,693 6,881 Net operating losses 45,092 34,376 Stock-based compensation 1,182 1,542 Total deferred tax assets 61,560 51,940 Valuation allowance (46,578 ) (42,236 ) Total deferred tax assets, net of valuation allowance 14,982 9,704 Deferred tax liabilities: Property and equipment (21 ) 1,249 Goodwill and intangibles (1,972 ) 3,945 Investment in foreign partnership (13,370 ) (14,859 ) Total deferred tax liabilities (15,363 ) (9,665 ) Net deferred tax assets (liabilities) $ (381 ) $ 39 |
Summary of Changes to Unrecognized Tax Benefits | The following table summarizes the changes to unrecognized tax benefits (in thousands): Year ended December 31, 2018 2017 Unrecognized tax benefit at the beginning of the year 4,440 9,331 (Deduction) additions based on tax positions related to the current year — (1,981 ) Additions based on tax positions related to the prior year — — Reductions as a result of lapse of applicable statute of limitations (106 ) (551 ) Reductions as a result of tax rate changes — (236 ) Reductions as a result of foreign exchange rates and other — (2,123 ) Unrecognized tax benefits at the end of the year $ 4,334 $ 4,440 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Restructuring And Related Activities [Abstract] | |
Rollforward of accrued restructuring liability | A rollforward of the accrued restructuring liability is presented below (in thousands): Balance at January 1, 2018 $ 520 Accrued restructuring charges 1,381 Payments (1,191 ) Balance at December 31, 2018 $ 710 |
The Company and Basis of Pres_2
The Company and Basis of Presentation - Additional Information (Details) $ in Thousands | Mar. 08, 2018USD ($) | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($) | Mar. 27, 2019USD ($) | Nov. 06, 2018USD ($) |
Company And Basis Of Presentation [Line Items] | |||||
Number of reportable segments | segment | 1 | ||||
Working capital | $ 44,900 | ||||
Cash | 29,054 | $ 22,466 | |||
Net proceeds from equity offering | $ 51,900 | ||||
Minimum liquidity covenant amount | $ 5,000 | ||||
Latest effective date of minimum liquidity covenant | 2020-03 | ||||
Depreciation | $ 6,000 | 6,600 | |||
Reclassification | Surgical instruments | |||||
Company And Basis Of Presentation [Line Items] | |||||
Depreciation | $ 5,300 | $ 5,900 | |||
Percentage of total cost of revenues | 15.00% | 15.00% | |||
Term Loan | Squadron Credit Agreement | |||||
Company And Basis Of Presentation [Line Items] | |||||
Secured debt agreement | $ 35,000 | $ 35,000 | |||
Term Loan | Squadron Credit Agreement | Subsequent Event | |||||
Company And Basis Of Presentation [Line Items] | |||||
Secured debt agreement | $ 30,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) shares in Millions | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2018USD ($)shares | Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer | |
Significant Accounting Policies [Line Items] | |||
Accounts receivable payment terms | 30 days | ||
Accounts receivable related to products and services | $ 15,095,000 | $ 14,822,000 | |
Goodwill and intangible asset impairment charge | 0 | ||
Impairment charges of Long-lived assets disposition | 0 | 0 | |
Impairment charges of Long-lived assets held for use | 0 | 0 | |
Sales, general and administrative | 72,509,000 | 69,959,000 | |
Preferred stock convertible to common stock | shares | 14.3 | ||
Recognition of beneficial conversion feature series B preferred stock | $ 13,500,000 | 13,488,000 | |
Product Shipment | |||
Significant Accounting Policies [Line Items] | |||
Sales, general and administrative | $ 2,500,000 | $ 2,300,000 | |
Minimum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 3 years | ||
Intangible assets, amortization period | 1 year | ||
Minimum | Acquired Technology, Customer Relationships, Manufacturing Know-how, Licensed Technology, Supply Agreements and Certain Trade Names and Trademarks | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets, amortization period | 1 year | ||
Maximum | |||
Significant Accounting Policies [Line Items] | |||
Estimated useful lives of property and equipment | 7 years | ||
Intangible assets, amortization period | 20 years | ||
Maximum | Acquired Technology, Customer Relationships, Manufacturing Know-how, Licensed Technology, Supply Agreements and Certain Trade Names and Trademarks | |||
Significant Accounting Policies [Line Items] | |||
Intangible assets, amortization period | 20 years | ||
Sales | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, number of customers | customer | 0 | 0 | |
Accounts Receivable | Customer Concentration Risk | |||
Significant Accounting Policies [Line Items] | |||
Concentration risk, number of customers | customer | 0 | 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Reconciliation of Liabilities (Details) - Fair value, inputs, level 3 - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Transfer from equity | $ 29,413 | |
Settlement of milestone #1 | $ (1,446) | |
Changes in fair value | 846 | (12,044) |
Exercises | (2,311) | |
Transfer to equity | $ (15,058) | |
Ending balance | 2,600 | |
SafeOp Surgical, Inc. | ||
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Roll Forward] | ||
Contingent consideration liability recorded upon acquisition of SafeOp | $ 3,200 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Summary of Weighted Average Assumptions Used to Compute Stock-Based Compensation Costs for Stock Options Granted (Detail) - Options to purchase common stock | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Risk-free interest rate | 2.85% | 2.01% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average expected life | 6 years 29 days | 6 years 7 days |
Volatility | 78.54% | 78.52% |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Summary of Compensation Cost for Stock-Based Compensation Arrangements (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 5,304 | $ 3,981 |
Cost of revenues | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 73 | 40 |
Research and development | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 482 | 206 |
Sales, General and Administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 4,749 | $ 3,735 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Computation of Basic and Diluted Loss Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator: | ||
Net (loss) income, basic | $ (42,463) | $ (2,294) |
Net (loss) income, diluted | (42,463) | |
Loss from continuing operations | (28,808) | (4,540) |
Change in fair value of warrants | 12,044 | |
Net (loss) income, diluted, continuing operations | (16,584) | |
Net (loss) income, basic, Discontinuing operations | $ (167) | 2,246 |
Net (loss) income, diluted, Discontinuing operations | $ 2,246 | |
Denominator: | ||
Weighted average common shares outstanding | 35,402 | 12,827 |
Weighted average unvested common shares subject to repurchase | (87) | (39) |
Weighted average common shares outstanding - basic | 35,315 | 12,788 |
Dilutive impact of warrants | 494 | |
Weighted average common shares outstanding - diluted | 35,315 | 13,282 |
Basic net (loss) income per share | $ (1.20) | $ (0.18) |
Diluted net (loss) income per share | (1.20) | (1.08) |
Basic net (loss) income per share, Continuing operations | (0.82) | (0.36) |
Diluted net (loss) income per share, Continuing operations | (0.82) | (1.25) |
Basic net (loss) income per share, Discontinued operations | 0 | 0.18 |
Diluted net (loss) income per share, Discontinued operations | $ 0 | $ 0.17 |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - Weighted-Average Anti-Dilutive Securities Not Included in Diluted Net Loss Per Share (Detail) - shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in diluted net loss per share (in shares) | 5,179 | 8,228 |
Options to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in diluted net loss per share (in shares) | 330 | 3,156 |
Warrants to purchase common stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in diluted net loss per share (in shares) | 1,860 | 1,204 |
Unvested restricted share awards | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in diluted net loss per share (in shares) | 87 | 39 |
Series A convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in diluted net loss per share (in shares) | 2,141 | 3,829 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities not included in diluted net loss per share (in shares) | 761 |
Balance Sheet Details - Account
Balance Sheet Details - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Accounts receivable | $ 15,291 | $ 15,328 |
Less allowance for doubtful accounts | (196) | (506) |
Accounts receivable, net | $ 15,095 | $ 14,822 |
Balance Sheet Details - Invento
Balance Sheet Details - Inventories, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 5,813 | $ 4,969 |
Work-in-process | 952 | 502 |
Finished goods | 40,165 | 37,933 |
Inventory, gross, total | 46,930 | 43,404 |
Less reserve for excess and obsolete | (18,165) | (16,112) |
Inventories, net | $ 28,765 | $ 27,292 |
Balance Sheet Details - Propert
Balance Sheet Details - Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 66,935 | $ 67,045 |
Less accumulated depreciation and amortization | (53,700) | (54,375) |
Property and equipment, net | $ 13,235 | 12,670 |
Surgical instruments | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 4 years | |
Property and equipment, gross | $ 54,848 | 53,198 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 7 years | |
Property and equipment, gross | $ 5,971 | 5,503 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 3 years | |
Property and equipment, gross | $ 3,104 | 3,500 |
Office furniture and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful lives | 5 years | |
Property and equipment, gross | $ 1,155 | 2,794 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Various useful lives of leasehold improvements | various | |
Property and equipment, gross | $ 1,765 | 1,714 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 92 | $ 336 |
Balance Sheet Details - Intangi
Balance Sheet Details - Intangible Assets - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Depreciation | $ 6 | $ 6.6 | |
Amortization of intangible assets | 0.8 | 0.9 | |
SafeOp Surgical, Inc. | |||
Property, Plant and Equipment [Line Items] | |||
Business acquisition, intangible assets recorded | $ 21.6 | ||
Machinery and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Capital Leased Assets Gross | $ 0.4 | $ 0.4 |
Balance Sheet Details - Intan_2
Balance Sheet Details - Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 54,121 | $ 32,835 |
Less accumulated amortization | (27,713) | (27,587) |
Intangible assets, net | $ 26,408 | 5,248 |
Developed product technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 10 years | |
Intangible assets, Gross | $ 26,976 | 13,876 |
Intellectual property | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 1,004 | 1,004 |
License agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 1 year | |
Intangible assets, Gross | $ 5,064 | 5,738 |
Trademarks and trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Intangible assets, Gross | $ 792 | 732 |
Customer-related | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 5 years | |
Intangible assets, Gross | $ 7,458 | 7,458 |
Distribution network | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 4 years | |
Intangible assets, Gross | $ 4,027 | $ 4,027 |
In process research and development | ||
Finite-Lived Intangible Assets [Line Items] | ||
Useful lives | 19 years | |
Intangible assets, Gross | $ 8,800 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Intangible Assets, Future Expected Amortization Expense (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Balance Sheet Related Disclosures [Abstract] | |
2019 | $ 1,566 |
2020 | 1,890 |
2021 | 1,890 |
2022 | 1,890 |
2023 | 1,890 |
Thereafter | 17,282 |
Total | $ 26,408 |
Balance Sheet Details - Accrued
Balance Sheet Details - Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Balance Sheet Related Disclosures [Abstract] | ||
Commissions and sales milestones | $ 3,594 | $ 3,360 |
Payroll and payroll related | 3,222 | 2,968 |
Litigation settlement obligation | 4,400 | 4,400 |
Professional fees | 2,637 | 1,484 |
Royalties | 1,354 | 1,269 |
Restructuring and severance accruals | 710 | 520 |
Taxes | (3) | 246 |
Guaranteed collaboration compensation, current | 4,485 | |
Interest | 261 | 376 |
Acquisition related - contingent consideration | 2,600 | |
Other | 3,541 | 3,138 |
Total accrued expenses | $ 22,316 | $ 22,246 |
Discontinued Operations - Addit
Discontinued Operations - Additional Information (Details) | Sep. 01, 2016USD ($)option | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Contracts revenue | $ 91,694,000 | $ 101,739,000 | |
Cost of revenues | 28,457,000 | 33,517,000 | |
Globus facility agreement | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Maximum borrowing capacity | $ 30,000,000 | 30,000,000 | |
Globus facility agreement | Line of credit | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Line of credit, expiration period | 5 years | ||
Supply agreement [Member] | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Contracts revenue | 8,000,000 | 14,400,000 | |
Cost of revenues | $ 7,500,000 | $ 12,100,000 | |
Discontinued operations, disposed of by sale | International Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Supply commitment term | 3 years | ||
Supply agreement, number of annual options to extend | option | 2 |
Debt - MidCap Facility Agreemen
Debt - MidCap Facility Agreement (Details) - USD ($) | Nov. 06, 2018 | Mar. 08, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | ||||
Unamortized debt discount | $ 3,857,000 | $ 2,023,000 | ||
Minimum liquidity covenant amount | $ 5,000,000 | |||
Latest effective date of minimum liquidity covenant | 2020-03 | |||
Amended credit facility with MidCap | ||||
Line of Credit Facility [Line Items] | ||||
Unamortized debt discount | $ 1,300,000 | |||
Minimum liquidity covenant amount | $ 5,000,000 | |||
Latest effective date of minimum liquidity covenant | 2020-03 | 2019-03 | ||
Amended credit facility with MidCap | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Effective date of financial covenants of amended credit facility | 2020-04 | 2019-04 | ||
Amended credit facility with MidCap | Minimum | ||||
Line of Credit Facility [Line Items] | ||||
Effective date of financial covenants of amended credit facility | 2019-04 | 2018-04 | ||
Amended credit facility with MidCap | Line of credit | Maximum | ||||
Line of Credit Facility [Line Items] | ||||
Debt default, interest rate increase | 5.00% | |||
Amended credit facility with MidCap | Revolving credit facility | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 22,500,000 | |||
Line of credit | $ 11,000,000 | |||
Line of credit, expiration month and year | 2022-12 | |||
Interest rate | 8.35% | |||
Amended credit facility with MidCap | Revolving credit facility | LIBOR | ||||
Line of Credit Facility [Line Items] | ||||
Interest rate description | ("LIBOR") plus 6.0% | |||
Basis spread | 6.00% | |||
Amended credit facility with MidCap | Term Loan | ||||
Line of Credit Facility [Line Items] | ||||
Maximum borrowing capacity | $ 5,000,000 |
Debt - Globus Facility Agreemen
Debt - Globus Facility Agreement (Details) - USD ($) | Nov. 07, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | Sep. 01, 2016 |
Debt Instrument [Line Items] | ||||
Final settlement under agreement | $ 29,200,000 | $ 89,993,000 | $ 98,443,000 | |
Globus facility agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 30,000,000 | $ 30,000,000 |
Debt - Squadron Credit Agreemen
Debt - Squadron Credit Agreement (Details) - USD ($) | Mar. 27, 2019 | Nov. 06, 2018 | Sep. 01, 2016 | Dec. 31, 2018 | Dec. 31, 2017 |
Line of Credit Facility [Line Items] | |||||
Minimum liquidity covenant amount | $ 5,000,000 | ||||
Squadron Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Current interest rate | 10.50% | ||||
Debt instrument, aggregate principal to be paid on installments | $ 10,000,000 | ||||
Debt instrument, frequency of periodic payment | 29 equal monthly installments | ||||
Debt instrument payment at maturity | $ 25,000,000 | ||||
Debt instrument, maturity date | Nov. 30, 2023 | ||||
Debt carrying amount, net of issuance cost | $ 32,400,000 | ||||
Debt issuance cost, amortization period | 5 years | ||||
Squadron Credit Agreement | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, frequency of periodic payment | 29 equal monthly installments | ||||
Debt instrument, maturity date | Nov. 30, 2023 | ||||
Squadron Credit Agreement | Expanded Credit Facility | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 30,000,000 | ||||
Squadron Credit Agreement | Common Stock | |||||
Line of Credit Facility [Line Items] | |||||
Number of warrants issued (in shares) | 845,000 | ||||
Exercise price of warrants | $ 3.15 | ||||
Warrants term | 7 years | ||||
Squadron Credit Agreement | Common Stock | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Number of warrants issued (in shares) | 4,800,000 | ||||
Exercise price of warrants | $ 2.17 | ||||
Warrants term | 7 years | ||||
Squadron Credit Agreement | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Current interest rate | 10.00% | ||||
Squadron Credit Agreement | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Current interest rate | 13.00% | ||||
Globus facility agreement | |||||
Line of Credit Facility [Line Items] | |||||
Maximum borrowing capacity | $ 30,000,000 | $ 30,000,000 | |||
Term Loan | Squadron Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Secured debt agreement | $ 35,000,000 | $ 35,000,000 | |||
Proceeds from secured term loan | 34,100,000 | ||||
Term Loan | Squadron Credit Agreement | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Secured debt agreement | $ 30,000,000 | ||||
Line of credit | Squadron Credit Agreement | |||||
Line of Credit Facility [Line Items] | |||||
Minimum liquidity covenant amount | $ 5,000,000 | ||||
Fixed Charge Coverage Ratio | 100.00% | ||||
Line of credit | Squadron Credit Agreement | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit | $ 0 | ||||
Line of credit | Squadron Credit Agreement | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Debt default, interest rate increase | 5.00% | ||||
Line of credit | Squadron Credit Agreement | LIBOR | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit, expiration period | 5 years | ||||
Interest rate description | LIBOR plus 8% | ||||
Line of credit | Squadron Credit Agreement | LIBOR | Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate description | LIBOR plus 8% | ||||
Line of credit | Globus facility agreement | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit | $ 29,200,000 | ||||
Line of credit, expiration period | 5 years |
Debt - Other Debt Agreements (D
Debt - Other Debt Agreements (Details) | 12 Months Ended |
Dec. 31, 2018Agreement | |
Debt Disclosure [Abstract] | |
Capital leases interest percentage | 6.40% |
Number of capital lease agreement | 1 |
Debt - Long-Term Debt (Detail)
Debt - Long-Term Debt (Detail) - USD ($) | Dec. 31, 2018 | Nov. 06, 2018 | Dec. 31, 2017 | Sep. 01, 2016 |
Debt Instrument [Line Items] | ||||
Notes payable | $ 296,000 | $ 200,000 | ||
Convertible note | 3,000,000 | |||
Total | 49,306,000 | 42,874,000 | ||
Add: capital leases | 126,000 | 222,000 | ||
Less: debt discount | (3,857,000) | (2,023,000) | ||
Total | 45,575,000 | 41,073,000 | ||
Less: current portion of long-term debt | (3,276,000) | (3,306,000) | ||
Total long-term debt, net of current portion | 42,299,000 | 37,767,000 | ||
Globus facility agreement | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 30,000,000 | $ 30,000,000 | ||
Term Loan | Squadron Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Squadron Term Loan | 35,000,000 | $ 35,000,000 | ||
Amended Credit Facility And Term Loan With Mid Cap | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 11,010,000 | $ 12,674,000 |
Debt - Principal Payments on De
Debt - Principal Payments on Debt (Detail) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Debt Disclosure [Abstract] | ||
2019 | $ 3,250 | |
2020 | 47 | |
2021 | 2,414 | |
2022 | 15,148 | |
2023 and thereafter | 28,447 | |
Total | 49,306 | |
Add: capital lease principal payments | 126 | $ 222 |
Less: debt discount | (3,857) | (2,023) |
Total | 45,575 | 41,073 |
Less: current portion of long-term debt | (3,276) | (3,306) |
Long-term debt, net of current portion | $ 42,299 | $ 37,767 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2018USD ($)ft² | Dec. 31, 2017USD ($) | |
Loss Contingencies [Line Items] | ||
Rent expense | $ 1,400,000 | $ 1,400,000 |
Liability in connection with lawsuit | 0 | |
Alphatec Spine, Inc. | ||
Loss Contingencies [Line Items] | ||
Guaranteed obligated minimum royalty payments through 2022 and beyond | $ 5,900,000 | |
Building lease | ||
Loss Contingencies [Line Items] | ||
Area for facility of office, engineering and research and development space | ft² | 76,000 | |
Lease agreement expiry date | Jul. 31, 2021 | |
First year | Building lease | ||
Loss Contingencies [Line Items] | ||
Lease rent payable per month | $ 111,000 | |
Each year thereafter | Building lease | ||
Loss Contingencies [Line Items] | ||
Lease rent payable increase per month | $ 3,000 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Annual Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Commitments And Contingencies Disclosure [Abstract] | ||
Operating leases 2019 | $ 1,684 | |
Operating leases 2020 | 1,688 | |
Operating leases 2021 | 1,009 | |
Total Operating leases | 4,381 | |
Capital leases 2019 | 34 | |
Capital leases 2020 | 37 | |
Capital leases 2021 | 37 | |
Capital leases 2022 | 37 | |
Total Capital leases | 145 | |
Less: amount representing interest | (19) | |
Present value of minimum lease payments | 126 | $ 222 |
Current portion of capital leases | (34) | |
Capital leases, less current portion | $ 92 |
Orthotec Settlement - Additiona
Orthotec Settlement - Additional Information (Details) | Jul. 01, 2016USD ($) | Oct. 01, 2014USD ($) | Aug. 13, 2014USD ($)installment | Sep. 30, 2014USD ($) | Apr. 30, 2014USD ($) | Mar. 31, 2014USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Loss Contingencies [Line Items] | ||||||||
Settlement amount to be contributed | $ 5,000,000 | $ 5,000,000 | ||||||
Litigation settlement, remaining outstanding balance including interest | 0 | |||||||
Orthotec LLC, litigation settlement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Judgment assessed by court for (against) company | $ 49,000,000 | |||||||
Payments of settlement | $ 15,750,000 | $ 1,750,000 | 36,200,000 | |||||
Number of quarterly installments | installment | 28 | |||||||
Litigation settlement interest, quarterly installments, amount | $ 1,100,000 | |||||||
Litigation settlement, final installment amount | 700,000 | |||||||
Litigation settlement, remaining outstanding balance including interest | 21,600,000 | |||||||
Orthotec LLC, litigation settlement | HealthpointCapital, LLC | ||||||||
Loss Contingencies [Line Items] | ||||||||
Judgment assessed by court for (against) company | $ 5,000,000 | |||||||
Payments of settlement | $ 1,000,000 | 1,100,000 | ||||||
Settlement amount to be contributed | $ 5,000,000 | |||||||
Beginning fourth quarter of 2014 | Orthotec LLC, litigation settlement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Settlement amount, remaining balance | $ 31,500,000 | |||||||
Litigation settlement interest, quarterly installments, amount | $ 1,100,000 | |||||||
Litigation settlement interest rate | 7.00% | |||||||
Litigation settlement payments, quarterly payment amount | $ 1,100,000 | |||||||
Final installment | Orthotec LLC, litigation settlement | ||||||||
Loss Contingencies [Line Items] | ||||||||
Number of quarterly installments | installment | 1 |
Acquisition of SafeOp Surgica_3
Acquisition of SafeOp Surgical, Inc. - Additional Information (Details) - USD ($) | Mar. 09, 2018 | Mar. 08, 2018 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Mar. 31, 2018 |
Business Acquisition [Line Items] | |||||||
Convertible note convertible to common stock | 14,300,000 | ||||||
Accretion to contingent consideration | $ 846,000 | ||||||
Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Useful lives | 1 year | ||||||
Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Useful lives | 20 years | ||||||
SafeOp Surgical, Inc. | |||||||
Business Acquisition [Line Items] | |||||||
Business acquisition date | Mar. 8, 2018 | ||||||
Increase in net loss due to operating expenses | $ 2,800,000 | ||||||
Cash paid | $ 15,100,000 | 15,103,000 | |||||
Stock issued for acquisition, value | $ 9,800,000 | ||||||
Closing share price | $ 3.30 | ||||||
Convertible notes issued | $ 3,000,000 | ||||||
Convertible note convertible to common stock | 987,578 | ||||||
Number of warrants issued | 2,200,000 | ||||||
Exercise price of warrants per share | $ 3.50 | ||||||
Convertible note, maturity date | Mar. 9, 2019 | ||||||
Intangible assets | $ 21,600,000 | ||||||
Transaction costs | 1,600,000 | ||||||
Additional shares of common stock value issuable subject to performance milestones | 4,300,000 | ||||||
Accretion to contingent consideration | 800,000 | ||||||
SafeOp Surgical, Inc. | Ten Days After Submission Of An Application For Regulatory Clearance | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued for acquisition, value | 1,446,000 | ||||||
Additional shares of common stock value issuable subject to performance milestones | 1,400,000 | ||||||
SafeOp Surgical, Inc. | Ten Days After Receipt of Clearance from Regulatory Authority | |||||||
Business Acquisition [Line Items] | |||||||
Additional shares of common stock value issuable subject to performance milestones | 2,900,000 | ||||||
SafeOp Surgical, Inc. | EPAD Tradename | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 60,000 | ||||||
SafeOp Surgical, Inc. | EPAD Tradename | Minimum | |||||||
Business Acquisition [Line Items] | |||||||
Useful lives | 1 year | ||||||
SafeOp Surgical, Inc. | Developed SSEP Technology | |||||||
Business Acquisition [Line Items] | |||||||
Intangible assets | $ 13,100,000 | ||||||
SafeOp Surgical, Inc. | Developed SSEP Technology | Maximum | |||||||
Business Acquisition [Line Items] | |||||||
Useful lives | 20 years | ||||||
SafeOp Surgical, Inc. | Common Stock | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares of common stock agreed to issue | 3,265,132 | ||||||
Stock issued for acquisition | 2,975,209 | 174,302 | 115,621 | ||||
SafeOp Surgical, Inc. | Common Stock | Subsequent Event | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued for acquisition | 886,843 | ||||||
SafeOp Surgical, Inc. | Common Stock | Ten Days After Submission Of An Application For Regulatory Clearance | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued for acquisition | 443,421 | 443,000 |
Acquisition of SafeOp Surgica_4
Acquisition of SafeOp Surgical, Inc. - Schedule of Unaudited Pro Forma Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Business Combinations [Abstract] | ||
Revenue | $ 91,694 | $ 101,981 |
Loss from continuing operations | (29,493) | (8,776) |
Net loss | $ (28,975) | $ (6,530) |
Net loss per share, basic and diluted | $ (0.69) | $ (0.35) |
Acquisition of SafeOp Surgica_5
Acquisition of SafeOp Surgical, Inc. - Schedule of Total Purchase Price (Details) - SafeOp Surgical, Inc. - USD ($) $ in Thousands | Mar. 09, 2018 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||
Cash paid | $ 15,100 | $ 15,103 |
Common stock issued | 10,879 | |
Note | 3,000 | |
Warrants | 1,650 | |
Contingent consideration issued or issuable | 3,200 | |
Total | $ 33,832 |
Acquisition of SafeOp Surgica_6
Acquisition of SafeOp Surgical, Inc. - Schedule of Allocation of Purchase Price (Details) - USD ($) | Dec. 31, 2018 | Mar. 31, 2018 |
Liabilities assumed: | ||
Goodwill | $ 13,897,000 | |
SafeOp Surgical, Inc. | ||
Assets acquired: | ||
Accounts receivable | 40,000 | |
Inventory | 192,000 | |
Prepaid expenses and other current assets | 89,000 | |
Total current assets | 321,000 | |
Property and equipment, net | 20,000 | |
Other long-term assets | 5,000 | |
Intangible assets | $ 21,600,000 | |
Total assets | 21,906,000 | |
Liabilities assumed: | ||
Accounts payable | 55,000 | |
Accrued expenses | 148,000 | |
Deferred tax liability | 1,768,000 | |
Total liabilities | 1,971,000 | |
Goodwill | 13,897,000 | |
Total consideration transferred | 33,832,000 | |
SafeOp Surgical, Inc. | IPR&D | ||
Assets acquired: | ||
Intangible assets | 8,400,000 | |
SafeOp Surgical, Inc. | EPAD Tradename | ||
Assets acquired: | ||
Intangible assets | 60,000 | |
SafeOp Surgical, Inc. | Developed Technology | ||
Assets acquired: | ||
Intangible assets | $ 13,100,000 |
Sale of Assets - Additional Inf
Sale of Assets - Additional Information (Details) - USD ($) $ in Thousands | May 05, 2017 | Dec. 31, 2017 |
Sale Of Assets [Line Items] | ||
Net gain on sale of assets | $ 856 | |
Inventory and intellactual property | Third Party | ||
Sale Of Assets [Line Items] | ||
Agreement to sell assets, consideration payable in credit to future minimum royalties owed | $ 1,000 | |
Net gain on sale of assets | $ 900 |
Equity - Additional Information
Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Mar. 08, 2018 | Dec. 31, 2011 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 |
Subsidiary Sale Of Stock [Line Items] | ||||||
Redeemable preferred stock carrying value | $ 23,603 | $ 23,603 | ||||
Redeemable preferred stock authorized | 20,000,000 | 20,000,000 | ||||
Redeemable preferred stock, price per share | $ 0.0001 | $ 0.0001 | ||||
Preferred stock convertible to common stock | 14,300,000 | |||||
Warrant outstanding | 22,301,515 | |||||
Stock-based compensation | $ 5,304 | $ 3,981 | ||||
Squadron Capital | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 845,000 | |||||
Exercise price of warrants | $ 3.15 | |||||
Warrant expiration period | 7 years | |||||
Patrick S. Miles | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 1,327,434 | |||||
Exercise price of warrants | $ 5 | |||||
Warrant expiration period | 5 years | |||||
Stock-based compensation | $ 1,400 | |||||
Patrick S. Miles | Risk-free Interest Rate | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrants and rights outstanding measurement input | 0.019 | |||||
Patrick S. Miles | Volatility | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrants and rights outstanding measurement input | 0.995 | |||||
Patrick S. Miles | Expected Term | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrants term | 2 years 3 months 18 days | |||||
Patrick S. Miles | Dividend Yield | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrants and rights outstanding measurement input | 0 | |||||
SiliconValley Bank (SVB) | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 7,812 | |||||
Exercise price of warrants | $ 19.20 | |||||
Amendment fee amount waived | $ 200 | |||||
Warrant term | 10 years | |||||
2017 Common Stock Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Exercise price of warrants | $ 2 | |||||
Warrant outstanding | 3,757,000 | |||||
Proceeds from exercise of warrant | $ 4,000 | $ 3,300 | ||||
Number of warrants exercised | 1,900,000 | 1,700,000 | ||||
2017 Common Stock Warrants | Maximum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Beneficial ownership limitation percentage | 4.99% | |||||
Beneficial ownership, limitation option, percentage | 9.99% | |||||
Beneficial ownership limitation notification period | 61 days | |||||
2017 Common Stock Warrants | Minimum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of outstanding voting stock acquired | 50.00% | |||||
2017 Banker Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Exercise price of warrants | $ 2.50 | |||||
Warrant outstanding | 167,418 | |||||
2018 Common Stock Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 1,800,000 | |||||
Exercise price of warrants | $ 3.50 | |||||
Warrant outstanding | 13,996,851 | |||||
2018 Common Stock Warrants | Minimum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of outstanding voting stock acquired | 50.00% | |||||
Common Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of preferred shares converted to common stock | 14,986,000 | 4,964,000 | ||||
2017 Private Placement | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Aggregate gross proceeds for private placement | $ 18,900 | |||||
2017 Private Placement | 2017 Common Stock Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Exercise price of warrants | $ 2 | |||||
2017 Private Placement | 2017 Banker Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Exercise price of warrants | $ 2.50 | |||||
2017 Private Placement | 2017 Banker Warrants | Maximum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 471,600 | |||||
2017 Private Placement | Common Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Issuance of common stock upon securities purchase agreement | 1,809,628 | |||||
Common stock purchase price per share | $ 2 | |||||
2017 Private Placement | Common Stock | 2017 Common Stock Warrants | Maximum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 9,432,000 | |||||
2018 Private Placement | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Aggregate gross proceeds for private placement | $ 45,200 | |||||
Exercise price of warrants | $ 3.50 | |||||
Proceeds from exercise of warrant | $ 4,800 | |||||
Warrant expiration period | 5 years | |||||
2018 Private Placement | 2017 Common Stock Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Exercise price of warrants | $ 2 | |||||
Warrant outstanding | 2,400,000 | |||||
Proceeds from exercise of warrant | $ 4,800 | |||||
2018 Private Placement | 2017 Banker Warrants | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Warrant outstanding | 167,418 | |||||
Proceeds from exercise of warrant | $ 800 | |||||
Number of warrants exercised | 304,182 | 0 | ||||
2018 Private Placement | Common Stock | Maximum | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of warrants issued (in shares) | 12,196,851 | |||||
Redeemable Preferred Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Redeemable preferred stock carrying value | $ 23,600 | $ 23,600 | ||||
Redeemable preferred stock authorized | 20,000,000 | 20,000,000 | ||||
Redeemable preferred stock redemption, price per share | $ 9 | $ 9 | ||||
Redeemable preferred stock, price per share | $ 7.11 | $ 7.11 | ||||
Series A Convertible Preferred Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Percentage of outstanding preferred stock shares | 75.00% | |||||
Number of preferred shares converted | 1,274 | 9,927 | ||||
Number of preferred shares outstanding for being conversion | 4,043 | |||||
Series A Convertible Preferred Stock | Common Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Number of preferred shares converted to common stock | 636,997 | 4,963,702 | ||||
Number of preferred shares outstanding for being conversion to common stock | 2,021,673 | |||||
Series A Convertible Preferred Stock | 2017 Private Placement | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Preferred stock, shares issued | 15,245 | |||||
Shares issued price per share | $ 1,000 | |||||
Series A Convertible Preferred Stock | 2017 Private Placement | Common Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Preferred stock convertible to common stock | 7,622,372 | |||||
Series A Convertible Preferred Stock | 2018 Private Placement | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Preferred stock, shares issued | 45,200 | |||||
Shares issued price per share | $ 1,000 | |||||
Series A Convertible Preferred Stock | 2018 Private Placement | Common Stock | ||||||
Subsidiary Sale Of Stock [Line Items] | ||||||
Preferred stock convertible to common stock | 14,349,236 |
Equity - Summary of Outstanding
Equity - Summary of Outstanding Warrants (Details) | Dec. 31, 2018$ / sharesshares |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 22,301,515 |
2017 Common Stock Warrants | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 3,757,000 |
Exercise price of warrants per share | $ / shares | $ 2 |
2017 Banker Warrants | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 167,418 |
Exercise price of warrants per share | $ / shares | $ 2.50 |
2018 Common Stock Warrants | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 13,996,851 |
Exercise price of warrants per share | $ / shares | $ 3.50 |
Merger Warrants | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 2,200,000 |
Exercise price of warrants per share | $ / shares | $ 3.50 |
Executive Warrants | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 1,327,434 |
Exercise price of warrants per share | $ / shares | $ 5 |
Squadron Capital | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 845,000 |
Exercise price of warrants per share | $ / shares | $ 3.15 |
Other Warrants | |
Class Of Warrant Or Right [Line Items] | |
Number of Warrants | 7,812 |
Exercise price of warrants per share | $ / shares | $ 19.20 |
Stock Benefit Plans and Stock_3
Stock Benefit Plans and Stock-Based Compensation - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Feb. 28, 2018 | Sep. 30, 2016 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance | 39,438,000 | ||||
Stock-based compensation | $ 5,304,000 | $ 3,981,000 | |||
Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock issued | 1,810,000 | ||||
Collaborative Arrangement | Elite Medical Holdings L L C And Pac3 Surgical Products L L C | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Payments of settlement | $ 400,000 | ||||
Gain Loss On Contract Termination | $ 6,200 | ||||
Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance | 4,682,000 | ||||
Weighted-average grant-date fair value of stock options granted | $ 2 | $ 1.36 | |||
Share price | $ 2.29 | ||||
Unrecognized compensation expense for stock options and awards expected to be recognized | $ 5,100,000 | ||||
Straight-line basis over a weighted average period | 2 years 11 months 23 days | ||||
Restricted Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance | 3,270,000 | ||||
Straight-line basis over a weighted average period | 2 years 6 months 18 days | ||||
Weighted average fair value of awards granted | $ 2.87 | $ 2.96 | |||
Unrecognized compensation expense for restricted stock and awards expected to be recognized | $ 7,200,000 | ||||
2016 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance | 1,083,333 | ||||
Number of shares available for grant | 711,933 | ||||
2016 Equity Incentive Plan | Employee Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 10 years | ||||
Award vesting period | 4 years | ||||
Exercise price minimum percentage of market price on grant date | 100.00% | ||||
2016 Equity Incentive Plan | Employee Stock Option | 10 Percent Stockholder | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expiration period | 5 years | ||||
Exercise price minimum percentage of market price on grant date | 110.00% | ||||
Inducement Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock reserved for future issuance | 188,356 | ||||
Maximum award to be deductible other than options | $ 1,000,000 | ||||
Inducement Plan | PRSUs | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Equity instruments other than options, grants in period, fair value | $ 800,000 | ||||
Inducement Plan | PRSUs | Minimum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Target value, vesting percentage | 0.00% | ||||
Inducement Plan | PRSUs | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Target value, vesting percentage | 250.00% | ||||
Two Thousand Seventeen Distributor Inducement Plan | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Number of shares available for grant | 75,000 | ||||
Number of warrants issued (in shares) | 300,000 | ||||
Common stock issued | 17,000 | ||||
Stock-based compensation | $ 200,000 | ||||
Number of warrants available to be granted | 50,000 | ||||
Two Thousand Seventeen Distributor Inducement Plan | Board of Directors Chairman | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share authorized grant of warrants | 1,000,000 | ||||
2017 Development Services Plan | Board of Directors Chairman | Common Stock | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share authorized grant of warrants | 2,300,000 | 3,000,000 | |||
Common stock issued | 0 | ||||
Issuance of shares granted to distributors was vested | 0 |
Stock Benefit Plans and Stock_4
Stock Benefit Plans and Stock-Based Compensation - Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | ||
Shares Outstanding, Beginning balance | 3,156 | |
Shares, Granted | 2,298 | |
Shares, Exercised | (14) | |
Shares, Forfeited | (758) | |
Shares Outstanding, Ending balance | 4,682 | 3,156 |
Shares, Options vested and exercisable | 1,249 | |
Shares, Options vested and expected to vest | 4,230 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | ||
Weighted average exercise price, Outstanding, Beginning balance | $ 4.31 | |
Weighted average exercise price, Granted | 2.88 | |
Weighted average exercise price,Exercised | 1.81 | |
Weighted average exercise price, Forfeited | 4.12 | |
Weighted average exercise price, Outstanding, Ending balance | 3.64 | $ 4.31 |
Weighted average exercise price, Options vested and exercisable | 6.34 | |
Weighted average exercise price, Options vested and expected to vest | $ 3.73 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract] | ||
Weighted average remaining contractual term, Outstanding, balance | 8 years 5 months 15 days | 8 years 3 months 10 days |
Weighted average remaining contractual term, Options vested and exercisable | 6 years 9 months 7 days | |
Weighted average remaining contractual term, Options vested and expected to vest | 8 years 4 months 24 days | |
Aggregate intrinsic value, Outstanding, Beginning balance | $ 1,841 | |
Aggregate intrinsic value, Outstanding, Ending balance | 919 | $ 1,841 |
Aggregate intrinsic value, Options vested and exercisable | 341 | |
Aggregate intrinsic value, Options vested and expected to vest | $ 861 |
Stock Benefit Plans and Stock_5
Stock Benefit Plans and Stock-Based Compensation - Summary of Information about Restricted Stock Awards, Restricted Stock Units and Performance-Based Restricted Units Activity (Detail) - Restricted Stock - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | ||
Shares, Unvested beginning balance | 2,000 | |
Shares, Awarded | 1,924 | |
Shares, Vested | (278) | |
Shares, Forfeited | (376) | |
Shares, Unvested ending balance | 3,270 | 2,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||
Weighted average grant date fair value, Unvested beginning balance | $ 3.41 | |
Weighted average grant date fair value, Awarded | 2.87 | $ 2.96 |
Weighted average grant date fair value, Vested | 4 | |
Weighted average grant date fair value, Forfeited | 4.31 | |
Weighted average grant date fair value, Unvested ending balance | $ 2.94 | $ 3.41 |
Weighted average remaining recognition period (in years) | 2 years 6 months 18 days | 2 years 9 months 10 days |
Stock Benefit Plans and Stock_6
Stock Benefit Plans and Stock-Based Compensation - Summary Common Stock Reserved for Future Issuance (Detail) shares in Thousands | Dec. 31, 2018shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 39,438 |
Employee Stock Option | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 4,682 |
Unvested restricted share awards | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 3,270 |
Employee Stock Purchase Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 226 |
Series A Convertible Preferred Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 2,022 |
Convertible notes | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 988 |
Warrants Outstanding | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 22,302 |
Distributor And Development Services Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 4,000 |
Merger Contingently Issuable | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 887 |
Authorized for Future Grant Under the Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock reserved for future issuance | 1,061 |
Income Taxes - Components of Pr
Income Taxes - Components of Pretax Income (Loss) from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. Domestic | $ (30,169) | $ (4,536) |
Foreign | (38) | |
Pretax loss from operations | $ (30,169) | $ (4,574) |
Income Taxes - Components of (B
Income Taxes - Components of (Benefit) Provision for Income Taxes from Continuing Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Current income tax (benefit) provision: | ||
Federal | $ (64) | $ (102) |
State | 86 | 101 |
Foreign | 4 | 3 |
Total current | 26 | 2 |
Deferred income tax benefit: | ||
Federal | (1,140) | (36) |
State | (247) | |
Total deferred | (1,387) | (36) |
Total income tax benefit | $ (1,361) | $ (34) |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Federal statutory rate | 21.00% | 35.00% |
Adjustments for tax effects of: | ||
State taxes, net | 0.47% | 7.40% |
Stock-based compensation | (4.29%) | (16.10%) |
Foreign taxes | (1.20%) | |
Tax law change | (459.10%) | |
Fair market value adjustments | (0.59%) | 92.10% |
Other permanent adjustments | (0.56%) | (1.30%) |
Tax rate adjustment | 19.10% | |
Uncertain tax positions | 0.30% | 4.90% |
NOL expiration | (21.80%) | |
Other | (1.57%) | |
Valuation allowance | (10.25%) | 341.80% |
Effective income tax rate | 4.51% | 0.80% |
Income Taxes - Significant Comp
Income Taxes - Significant Components of Company's Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets: | ||
Accruals and reserves | $ 1,133 | $ 1,783 |
Income tax credit carryforwards | 3,150 | 3,182 |
Interest | 1,351 | (126) |
Inventory | 4,959 | 4,302 |
Legal settlement | 4,693 | 6,881 |
Net operating losses | 45,092 | 34,376 |
Stock-based compensation | 1,182 | 1,542 |
Total deferred tax assets | 61,560 | 51,940 |
Valuation allowance | (46,578) | (42,236) |
Total deferred tax assets, net of valuation allowance | 14,982 | 9,704 |
Deferred tax liabilities: | ||
Property and equipment | (21) | 1,249 |
Goodwill and intangibles | (1,972) | 3,945 |
Investment in foreign partnership | (13,370) | (14,859) |
Total deferred tax liabilities | (15,363) | (9,665) |
Net deferred tax (liabilities) | $ (381) | |
Net deferred tax assets | $ 39 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Income Tax [Line Items] | |||
Deferred tax asset, valuation allowance | $ 46,578,000 | $ 42,236,000 | |
Deferred tax asset, valuation allowance increase (decrease) | $ 4,300,000 | (13,800,000) | |
Number of years cumulative pre-tax loss | 3 years | ||
Unrecognized tax benefits | $ 4,334,000 | $ 4,440,000 | $ 9,331,000 |
Uncertain tax benefits that, if realized, would affect the effective tax rate | 3,900,000 | ||
Accrued interest and penalties | 0 | ||
Operating loss carryforwards state | 106,700,000 | ||
Operating loss carryforwards federal | $ 172,200,000 | ||
Federal and state net operating loss carryforwards, expiring year | 2038 | ||
Federal research and development tax credit carryforwards | $ 3,400,000 | ||
State research and development tax credit carryforwards | $ 3,100,000 | ||
Federal statutory income tax rate | 21.00% | 35.00% | |
Federal research and development tax credits [Member] | |||
Income Tax [Line Items] | |||
Federal research and development tax credits expiration year | 2038 |
Income Taxes - Summary of Chang
Income Taxes - Summary of Changes to Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefit at the beginning of the year | $ 4,440 | $ 9,331 |
(Deduction) additions based on tax positions related to the current year | (1,981) | |
Reductions as a result of lapse of applicable statute of limitations | (106) | (551) |
Reductions as a result of tax rate changes | (236) | |
Reductions as a result of foreign exchange rates and other | (2,123) | |
Unrecognized tax benefits at the end of the year | $ 4,334 | $ 4,440 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands | Jul. 01, 2016 | Aug. 13, 2014 | Sep. 30, 2014 | Apr. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2018 | Dec. 31, 2017 |
Related Party Transaction [Line Items] | |||||||
Settlement amount to be contributed | $ 5,000 | $ 5,000 | |||||
Withholding tax receivable from officer | 350 | ||||||
Restricted Common Stock | |||||||
Related Party Transaction [Line Items] | |||||||
Withholding tax receivable from officer | 300 | ||||||
Orthotec LLC, litigation settlement | |||||||
Related Party Transaction [Line Items] | |||||||
Payments of settlement | $ 15,750 | $ 1,750 | 36,200 | ||||
Judgment assessed by court for (against) company | $ (49,000) | ||||||
Orthotec LLC, litigation settlement | HealthpointCapital, LLC | |||||||
Related Party Transaction [Line Items] | |||||||
Payments of settlement | $ 1,000 | 1,100 | |||||
Judgment assessed by court for (against) company | $ (5,000) | ||||||
Settlement amount to be contributed | $ 5,000 |
Retirement Plan - Additional In
Retirement Plan - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Matching contributions by employer | 4.00% | |
Employer matching contribution, vesting period | 1 year | |
Section 401(k) plan | ||
Defined Contribution Plan Disclosure [Line Items] | ||
Total contributions | $ 0.6 | $ 0.2 |
Restructuring Activities - Roll
Restructuring Activities - Rollforward of accrued restructuring liability (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring And Related Activities [Abstract] | ||
Beginning balance | $ 520 | |
Accrued restructuring charges | 1,381 | $ 2,206 |
Payments | (1,191) | |
Ending balance | $ 710 | $ 520 |
Restructuring Activities - Addi
Restructuring Activities - Additional Information (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 1,381,000 | $ 2,206,000 |
2015 California manufacturing operations restructuring plan | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring expenses | $ 0 | $ 2,200,000 |
Subsequent events - Additional
Subsequent events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 27, 2019 | Nov. 06, 2018 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Mar. 01, 2019 |
Squadron Credit Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, frequency of periodic payment | 29 equal monthly installments | |||||
Debt instrument, maturity date | Nov. 30, 2023 | |||||
Squadron Credit Agreement | Term Loan | ||||||
Subsequent Event [Line Items] | ||||||
Secured debt agreement | $ 35,000 | $ 35,000 | ||||
Squadron Credit Agreement | Line of credit | LIBOR | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit, expiration period | 5 years | |||||
Interest rate description | LIBOR plus 8% | |||||
Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of preferred shares converted to common stock | 14,986,000 | 4,964,000 | ||||
Common Stock | Squadron Credit Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Number of warrants issued (in shares) | 845,000 | |||||
Exercise price of warrants | $ 3.15 | |||||
Warrants term | 7 years | |||||
Series A Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of preferred shares converted | 1,274 | 9,927 | ||||
Number of preferred shares outstanding for being conversion | 4,043 | |||||
Series A Convertible Preferred Stock | Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of preferred shares converted to common stock | 636,997 | 4,963,702 | ||||
Number of preferred shares outstanding for being conversion to common stock | 2,021,673 | |||||
Subsequent Event | Squadron Credit Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Debt instrument, frequency of periodic payment | 29 equal monthly installments | |||||
Debt instrument, maturity date | Nov. 30, 2023 | |||||
Subsequent Event | Squadron Credit Agreement | Term Loan | ||||||
Subsequent Event [Line Items] | ||||||
Secured debt agreement | $ 30,000 | |||||
Subsequent Event | Squadron Credit Agreement | Line of credit | ||||||
Subsequent Event [Line Items] | ||||||
Line of credit | $ 0 | |||||
Floor on interest rate | 10.00% | |||||
Ceiling on interest rate | 13.00% | |||||
Subsequent Event | Squadron Credit Agreement | Line of credit | LIBOR | ||||||
Subsequent Event [Line Items] | ||||||
Interest rate description | LIBOR plus 8% | |||||
Subsequent Event | Common Stock | Squadron Credit Agreement | ||||||
Subsequent Event [Line Items] | ||||||
Number of warrants issued (in shares) | 4,800,000 | |||||
Exercise price of warrants | $ 2.17 | |||||
Warrants term | 7 years | |||||
Subsequent Event | Series A Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of preferred shares converted | 3,715 | |||||
Number of preferred shares outstanding for being conversion | 328 | |||||
Subsequent Event | Series A Convertible Preferred Stock | Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Number of preferred shares converted to common stock | 1,857,586 | |||||
Number of preferred shares outstanding for being conversion to common stock | 164,087 |