Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2018 | Apr. 10, 2019 | Jun. 30, 2018 | |
Entity Registrant Name | Real Goods Solar, Inc. | ||
Entity Central Index Key | 0001425565 | ||
Trading Symbol | rgse | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Public Float | $ 8,926,996 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2018 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2018 | ||
Document Fiscal Period Focus | FY | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | false | ||
Entity Ex Transition Period | false | ||
Class A common stock | |||
Entity Common Stock, Shares Outstanding | 108,902,754 | ||
Class B common stock | |||
Entity Common Stock, Shares Outstanding | 0 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash | $ 5,831 | $ 1,170 |
Accounts receivable, net | 1,340 | 2,787 |
Costs in excess of billings | 11 | 62 |
Inventory, net | 1,595 | 2,013 |
Deferred costs on uncompleted contracts | 236 | 615 |
Other current assets | 1,613 | 1,987 |
Total current assets | 10,626 | 8,634 |
Property and equipment, net | 778 | 1,154 |
POWERHOUSE license, net | 3,202 | 1,114 |
Goodwill | 1,338 | |
Net investment in sales-type leases and other assets | 1,654 | 2,018 |
Total assets | 16,260 | 14,258 |
Current liabilities: | ||
Convertible debt, net | 336 | 1 |
Accounts payable | 862 | 1,657 |
Accrued liabilities | 1,571 | 1,474 |
Deferred revenue and other current liabilities | 956 | 1,810 |
Total current liabilities | 3,725 | 4,942 |
Other liabilities | 1,242 | 3,074 |
Common stock warrant liabilities | 511 | 76 |
Total liabilities | 5,478 | 8,092 |
Commitments and contingencies (Note 7) | ||
Shareholders' equity: | ||
Preferred stock, par value $.0001 per share; 50,000,000 shares authorized; no shares issued and outstanding | ||
Additional paid-in capital | 253,331 | 206,640 |
Accumulated deficit | (242,566) | (200,482) |
Total shareholders' equity | 10,782 | 6,166 |
Total liabilities and shareholders' equity | 16,260 | 14,258 |
Class A common stock | ||
Shareholders' equity: | ||
Common stock, value | 17 | 8 |
Total shareholders' equity | 17 | 8 |
Class B common stock | ||
Shareholders' equity: | ||
Common stock, value | $ 0 | $ 0 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - $ / shares | Dec. 31, 2018 | Dec. 31, 2017 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Class A common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 150,000,000 | 150,000,000 |
Common stock, shares issued | 91,859,638 | 8,151,845 |
Common stock, shares outstanding | 91,859,638 | 8,151,845 |
Class B common stock | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 0 | 0 |
Common stock, shares outstanding | 0 | 0 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Contract revenue: | ||
Leasing, net | $ 59 | $ 53 |
Contract expenses: | ||
Customer acquisition | 3,616 | 5,918 |
Contract loss | (3,653) | (5,084) |
Operating expense | 9,793 | 10,789 |
Proxy contest expense | 1,186 | |
Goodwill impairment | 1,338 | |
Litigation | 187 | 327 |
Operating loss | (14,971) | (17,386) |
Change in fair value of derivative liabilities and loss on debt extinguishment | (27,134) | (379) |
Amortization of debt discount and deferred loan costs | (1,042) | (3) |
Other income | 1,063 | 68 |
Net loss | $ (42,084) | $ (17,700) |
Net loss per share: | ||
Basic and Diluted (in dollars per share) | $ (1.18) | $ (2.55) |
Weighted-average shares outstanding: | ||
Basic and Diluted (in shares) | 35,618 | 6,950 |
Sale and installation of solar energy systems | ||
Contract revenue: | ||
Contract revenue for service and sale and installation of solar energy systems | $ 11,511 | $ 14,030 |
Contract expenses: | ||
Contract expenses for service & Installation of solar energy systems | 11,177 | 13,135 |
Service | ||
Contract revenue: | ||
Contract revenue for service and sale and installation of solar energy systems | 1,159 | 1,509 |
Contract expenses: | ||
Contract expenses for service & Installation of solar energy systems | $ 1,589 | $ 1,623 |
Consolidated Statement of Chang
Consolidated Statement of Changes in Shareholders' Equity - USD ($) $ in Thousands | Class A Common Stock | Additional Paid - in Capital | Accumulated Deficit | Total |
Balances at Dec. 31, 2016 | $ 8 | $ 187,752 | $ (182,782) | $ 4,978 |
Balances (in shares) at Dec. 31, 2016 | 1,183,151 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Equity changes related to compensation | 249 | 249 | ||
Proceeds from common stock offering and warrant exercises, net of costs | 17,095 | 17,095 | ||
Proceeds from common stock offering and warrant exercises, net of costs (in shares) | 6,780,939 | |||
Fair value of shares issued for convertible note and interest and preferred stock liability converted to common stock | 734 | 734 | ||
Fair value of shares issued for convertible note and interest and preferred stock liability converted to common stock (in shares) | 177,018 | |||
Fractional shares issued in connection with reverse split (in shares) | 10,737 | |||
Proxy contest consideration | 810 | 810 | ||
Net Loss | (17,700) | (17,700) | ||
Balances at Dec. 31, 2017 | $ 8 | 206,640 | (200,482) | 6,166 |
Balances (in shares) at Dec. 31, 2017 | 8,151,845 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Proceeds from common stock offering and warrant exercises, net of costs | 1,524 | 1,524 | ||
Proceeds from common stock offering and warrant exercises, net of costs (in shares) | 1,600,000 | |||
Issuance and conversion of 2018 Notes, net of costs | $ 8 | 31,816 | 31,824 | |
Issuance and conversion of 2018 Notes, net of costs (in shares) | 72,826,126 | |||
Proceeds from warrant exercises related to 2018 Note Offering | $ 1 | 13,088 | 13,089 | |
Proceeds from warrant exercises related to 2018 Note Offering (in shares) | 8,681,667 | |||
Share-based compensation | 263 | 263 | ||
Common stock issued to settle proxy contest (in shares) | 600,000 | |||
Net Loss | (42,084) | (42,084) | ||
Balances at Dec. 31, 2018 | $ 17 | $ 253,331 | $ (242,566) | $ 10,782 |
Balances (in shares) at Dec. 31, 2018 | 91,859,638 |
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 | $ (42,084) | $ (17,700) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 401 | 415 |
Amortization of POWERHOUSE License | 33 | |
Share-based compensation expense | 263 | 249 |
Goodwill impairment | 1,338 | |
Change in fair value of derivative liabilities and loss on debt extinguishment | 27,134 | 379 |
Amortization of debt discount and issuance costs | 1,042 | |
Bad debt expense | 37 | 353 |
Inventory obsolescence | 32 | 398 |
Gain on settlement of liability | (942) | |
(Gain) loss on sale of assets | (3) | |
Loss on settlement of proxy contest | 810 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 1,410 | 397 |
Costs in excess of billings on uncompleted contracts | 51 | 164 |
Inventory | 386 | (872) |
Deferred costs on uncompleted contracts | 379 | (217) |
Net investment in sales-type leases and other current assets | 277 | (945) |
Other non-current assets | 364 | 542 |
Accounts payable | (834) | (804) |
Accrued liabilities | 97 | (844) |
Billings in excess of costs on uncompleted contracts | (107) | |
Deferred revenue and other current liabilities | (854) | 664 |
Other liabilities | (897) | 1,086 |
Net cash used in operating activities | (12,367) | (16,035) |
Investing activities: | ||
Payments related to POWERHOUSE license | (2,121) | (1,114) |
Purchases of property and equipment | (25) | (432) |
Payments related to RGS 365 portal | (413) | |
Net cash used in investing activities | (2,146) | (1,959) |
Financing activities: | ||
Proceeds from warrants | 9,614 | 1,064 |
Proceeds from issuance of 2018 Notes | 5,000 | |
Proceeds from collection of Investor Notes | 4,891 | |
Proceeds from the issuance of common stock | 920 | 16,187 |
Payments for transaction costs | (1,251) | (158) |
Restricted cash released upon conversion of debt | 173 | |
Principal borrowings on revolving line of credit | 1,498 | |
Principal payments on revolving line of credit | (2,540) | |
Net cash provided by financing activities | 19,174 | 16,224 |
Net increase (decrease) in cash | 4,661 | (1,770) |
Cash at beginning of year | 1,170 | 2,940 |
Cash at end of year | 5,831 | 1,170 |
Supplemental cash flow information: | ||
Income taxes paid | 0 | 0 |
Interest paid | 8 | |
Non-cash items | ||
Proxy contest settlement payment in shares of common stock | 810 | |
Debt discount arising from 2018 Note Offering | 10,088 | |
Embedded derivative liability with 2018 Note Offering | 12,987 | |
Common stock warrant liability with 2018 Note Offering | 6,818 | |
Issuance of Class A common stock for conversion of 2018 Notes, net of costs | 31,824 | |
Issuance of Class A common stock for exercise of common stock warrants | $ 13,089 | |
Interest paid with common stock | $ 125 |
Principles of Consolidation, Or
Principles of Consolidation, Organization and Nature of Operations | 12 Months Ended |
Dec. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation, Organization and Nature of Operations | 1. Principles of Consolidation, Organization and Nature of Operations Real Goods Solar, Inc. (“RGS” or the “Company”) is in the solar energy systems business as (i) the manufacturer of POWERHOUSE™ 3.0 in-roof solar shingles under a license agreement with Dow Global Technologies LLC (“Dow”) and (ii) a residential and commercial solar energy engineering, procurement, and construction firm (“EPC”). The consolidated financial statements include the accounts of RGS and its wholly-owned subsidiaries. RGS has prepared the accompanying consolidated financial statements in accordance with accounting principles generally accepted in the United States, or GAAP, which include the Company’s accounts and those of its subsidiaries. Intercompany transactions and balances have been eliminated. The Company has included the results of operations of acquired companies from the effective date of acquisition. POWERHOUSE™ License Agreement A material significant event occurred on September 29, 2017 (the “Effective Date”), when the Company executed an exclusive domestic and international world-wide Technology License Agreement (the “License”) with Dow for its POWERHOUSE™ in-roof solar shingle. The License allows RGS to market the POWERHOUSE™ 3.0 product using the Dow name, and under the terms of the License agreed to a license fee of $3 million. The license fee was comprised of two payments; the first $1 million was paid in connection with the Effective Date of the License in 2017 and the remaining $2 million was paid in 2018 in connection with receiving UL certification. The License requires the Company to commercialize and sell a minimum of 50 megawatts of solar within 5-years of the Effective Date to retain exclusive world-wide rights. The Company obtained UL certification for POWERHOUSE™ 3.0 during November 2018, immediately after which the Company commenced commercialization of POWERHOUSE™ 3.0 entailing the manufacturing, marketing and sale of POWERHOUSE™ 3.0 to roofing companies and homebuilders. The first purchase order for POWERHOUSE™ 3.0 was received from a customer on December 27, 2018 and shipped to the customer in January 2019. Liquidity and Financial Resources Update The Company’s historical operating results indicate substantial doubt exists related to its ability to continue as a going concern. Management’s plans and actions, which are intended to mitigate the substantial doubt raised by the Company’s historical operating results in order to satisfy its estimated liquidity needs for a period of 12 months from the issuance of the consolidated financial statements, are discussed below. As the Company cannot predict, with certainty, the outcome of its actions to generate liquidity, or whether such actions would generate the expected liquidity as currently planned, management’s plans to mitigate the risk and extend cash resources through the evaluation period, are not considered probable under current accounting standards for assessing an entity’s ability to continue as a going concern. As of December 31, 2018, the Company has cash of $5.8 million, working capital of $6.9 million, debt of $0.5 million and shareholders’ equity of $10.8 million. The Company has experienced recurring operating losses and negative cash flow from operations which have necessitated: · Exiting the mainland residential division and execution of a reduction in workforce, see Note 16. Subsequent Events; · Focusing on growing POWERHOUSE™ revenue through a re-allocation of personnel to POWERHOUSE™ sales and initiating sales to other solar installers and distribution companies; and · Raising additional capital. See Note 8. Shareholders Equity and Note 16. Subsequent Events for transactions to raise capital during the second quarter of 2019. No assurances can be given that the Company will be successful with its plans to grow revenue for profitable operations. The Company has historically incurred a cash outflow from its operations as its revenue has not been at a level for profitable operations. As discussed above, a key component of the Company’s revenue growth strategy is the sale of the POWERHOUSE™ 3.0 in-roof solar shingle. The Company obtained UL certification for POWERHOUSE™ at the close of 2018 and therefore only recently begun to market POWERHOUSE™ at the start of 2019. The Company believes that it will require several quarters to generate sales to meet its goals for profitable operations. The first quarter of the year has always been one of the Company’s slowest sales periods and as such, this is a period of higher cash outflow. POWERHOUSE™ 3.0 sales during the first quarter of 2019 have been materially less than the Company’s expectations and, accordingly, the Company raised additional capital during the second quarter of 2019. As discussed above, (i) the Company expects that future sales of POWERHOUSE™ 3.0 in-roof solar shingles will be its primary source of revenue and (ii) the Company only recently began marketing POWERHOUSE™ 3.0, and accordingly, expects to incur a quarterly cash outflow for a portion of 2019. Errors Identified in Previously Issued Consolidated Financial Statements During the preparation of the 2018 consolidated financial statements, the Company identified an error in the accounting for the 2018 Note Offering (Note 9. Convertible Debt). The Company incorrectly included debt issue costs of $0.6 million in the calculation of the debt discount and loss upon issuance, which resulted in amortization of debt discount being overstated and the loss on debt extinguishment to be understated. As a result, “change in fair value of derivative liabilities and loss on debt extinguishment” was understated by $0.5 million and $0.7 million and “amortization of debt discount and deferred loan costs” was overstated by $0.8 million and $0.7 million for the quarters ended June 30, 2018, and September 30, 2018, respectively. The Company evaluated the impact of the error on its previously issued financial statements and concluded that the impact was not material. The error was corrected in the fourth quarter of 2018 and resulted in a net impact of $0.09 million. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates are used to value warranty liabilities, the fair value of derivative liabilities embedded in complex financial instruments, common stock warrants, and allowance for doubtful accounts. Actual results could differ materially from those estimates. Discontinued Operations During 2014, the Company committed to a plan to sell certain contracts and rights comprised of the Company’s large commercial installations business, otherwise known as the Company’s former Commercial segment. The Company had previously reported this business as a discontinued operation, separate from the Company’s continuing operations. As of December 31, 2018, this business no longer met the criteria to be presented as discontinued operations. The remaining assets and liabilities were reclassified out of discontinued operations to continuing operations on the consolidated balance sheet as of December 31, 2017. Income from discontinued operations on the consolidated statements of operations was reclassified into the loss related to current continuing operations for the years ended December 31, 2018 and 2017 and had no impact on net loss. References to any gains or losses from discontinued operations as well as net cash used or provided by discontinued operations were removed, with these amounts reclassified into the continuing operations figures for the years ending December 31, 2018 and 2017. The 2017 financial statements have been reclassified to eliminate the presentation of the business as a discontinued operation and did not result in a material change. Cash The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of demand deposit accounts with financial institutions that are denominated in U.S. dollars Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates anticipated losses based on the expected collectability of all accounts receivable, taking into account collection history, number of days past due, identification of specific customer exposure and current economic trends. When the Company determines a balance is uncollectible and no longer actively pursues collection of the account, it is written off. The allowance for doubtful accounts was $0.5 million and $0.8 million December 31, 2018 and 2017, respectively. Inventory Inventory for our Solar Division consists primarily of solar energy system components (such as solar panels and inverters) and its cost is determined by the first-in, first-out ("FIFO") method. The inventory is stated at the lower of cost or net realizable value with an allowance for slow moving and obsolete inventory items based on an estimate of the markdown to the retail price required to sell or dispose of such items. The Company has an allowance for obsolete or slow-moving inventory of $0.7 and $0.6 million at December 31, 2018 and 2017, respectively. POWERHOUSE™ inventories are recorded at lower of cost (incurred from third party supply channel manufacturers) or net realizable value. Cost is determined using the FIFO method. Management will establish an estimated excess and obsolete inventory reserve based on slow-moving and obsolete inventory. At December 31, 2018, there was no excess and obsolete inventory reserve. Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed on the straight-line method over estimated useful lives, generally three to twenty years. RGS amortizes leasehold and building improvements over the shorter of the estimated useful lives of the assets or the remaining term of the lease or remaining life of the building, respectively. Goodwill and Purchased Intangibles Intangible assets arising from business combinations, such as acquired customer contracts and relationships (collectively, “customer relationships”), licenses, trademarks, non-compete agreements are initially recorded at fair value. Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company early adopted ASU 2017-04 during the second quarter of 2018 while performing its annual impairment test. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the reporting units against the planned results used in the last quantitative goodwill impairment test. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative impairment test is performed. The estimated fair value of the reporting unit is compared with its carrying value (including goodwill) and if the carrying value exceeds estimated fair value, an impairment charge is recorded. As a result of the annual impairment test, the Company fully impaired the Goodwill balance charging an impairment loss to the Consolidated Statement of Operations. Fair value of the reporting unit is determined using a discounted cash flow analysis. The use of present value techniques requires us to make estimates and judgments about the Company’s future cash flows. These cash flow forecasts will be based on assumptions that are consistent with the plans and estimates the Company uses to manage its business. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results. The Company capitalized the up-front POWERHOUSE™ 3.0 license payment, costs to obtain UL certification and legal costs to acquire the License. The intangible asset is amortized to operations, commencing November 2018 after UL certification, on a straight-line basis over the expected life of the License through 2034. As of December 31, 2018, the intangible asset had a carrying cost of $3.2 million, with $0.03 million in related amortization. The estimated amortization expense for each of the five succeeding fiscal years is expected to be $0.2 million per annum. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Revenue Recognition For the Company’s significant accounting policy related to revenue please see Note 3. Revenue. Share-Based Compensation The Company recognizes compensation expense for share-based awards based on the estimated fair value of the award on the date of grant and the probable attainment of a specified performance condition or over a service period. The Company uses the Black-Scholes option valuation model to estimate the fair value for purposes of accounting and disclosures. In estimating this fair value, certain assumptions are used (see Note 11. Share-Based Compensation), including the expected life of the option, risk-free interest rate, dividend yield, volatility and forfeiture rate. The use of different estimates for any one of these assumptions could have a material impact on the amount of reported compensation expense. Income Taxes The Company recognizes income taxes under the asset and liability method. Deferred income taxes are recognized based on temporary differences between financial reporting and income tax basis of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgment is required in determining when these events may occur and whether recovery of an asset is more likely than not. RGS has significant net operating loss carry-forwards and evaluates at the end of each reporting period whether it expects it is more likely than not that the deferred tax assets will be fully recoverable and provides a tax valuation allowance as necessary. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. In determining the appropriate valuation allowance, the Company considered projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies, and its overall deferred tax position. To identify any uncertain tax positions, the Company reviews (1) the decision to exclude from the tax return certain income or transactions; (2) the assertion that a particular equity restructuring (e.g., a spin-off transaction) is tax-free when that position might actually be uncertain, and; (3) the decision not to file a tax return in a particular jurisdiction for which such a return might be required in tax years that are still subject to assessment or challenge under relevant tax statutes. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses when applicable. Warranties The Company warrants its EPC solar energy systems sold to customers for up to 10 years against defects in installation workmanship. The manufacturers’ warranties on the solar energy system components, which are typically passed through to the customers, typically have product warranty periods of 10 years and a limited performance warranty period of 25 years. The Company generally provides for the estimated cost of warranties at the time the related revenue is recognized. The Company also maintains specific warranty liabilities for large commercial customers. The Company assesses the accrued warranty reserve quarterly and adjusts the amounts as necessary based on actual experience and changes in future estimates. The Company’s manufacturing warranties for its POWERHOUSE™ solar shingle, are an 11-year product warranty, which is the standard product warranty of most traditional solar panels today, and a 24-year power production warranty. The Company receives warranties from its supply chain matching the terms of the POWERHOUSE™ solar shingle warranty. As of December 31, 2018, there were no POWERHOUSE™ sales which required an estimate of warranty liability. Net Loss per Share RGS computes net loss per share by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if options or warrants to issue shares of the Company’s Class A common stock were exercised. Common share equivalents of 10,445,294 and 5,857,861 shares have been omitted from net loss per share for 2018 and 2017, respectively, as they are anti-dilutive. The Series O warrants, Series Q warrants, and the 2018 Notes are considered participating securities, and as such, are entitled to participate in any dividends or distribution of assets made by the Company. There was no effect on earnings per share for these participating securities as the Company operated with a net loss for both 2018 and 2017. See Note 8. Shareholders’ Equity for a description of these transactions. The following table sets forth the computation of basic and diluted net income (loss) per share: For the Years Ended December 31, (In thousands, except per share data) 2018 2017 Numerator for basic and diluted net loss per share $ (42,084 ) $ (17,700 ) Denominator: Weighted average shares for basic net loss per share 35,618 6,950 Effect of dilutive securities: Weighted average of common stock, stock options and warrants - - Denominators for diluted net loss per share 35,618 6,950 Net loss per share—basic and diluted $ (1.18 ) $ (2.55 ) Segment Information Operating segments are defined as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the executive team. Based on the financial information presented to and reviewed by the chief operating decision maker in deciding how to allocate the resources and in assessing the performance of the Company, the Company has determined that it has three reporting segments: Solar Division, POWERHOUSE™ and corporate expenses (“other segment”). Common Stock Warrants The Company accounts for common stock warrants as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. Certain of the Company’s warrants are accounted for as liabilities due to redemption provisions that are outside the control of the Company. The Company classifies these warrant liabilities with maturities of five years on the Consolidated Balance Sheet as long-term liabilities. They are revalued at each balance sheet date after their initial issuance with changes in the value recorded in earnings. The Company used a Monte Carlo pricing model to value these warrant liabilities. The Company also has issued common stock warrants which have been classified in equity. Upon exercise of the warrants, the Company determines the fair value of the warrants exercised using the share price and records the impact to common stock and additional paid-in capital. Derivatives The Company’s Senior Convertible Notes issued on April 9, 2018 (the "2018 Notes") contained conversion features and various redemption clauses that were required to be bifurcated and were initially measured and recorded at fair value and were revalued at each balance sheet date with changes in the value recorded in earnings. Each of the 2018 Notes gave the holder the right to convert the 2018 Notes into shares of Class A common stock at a set strike price (“conversion feature”). In addition to the conversion feature, redemption of the 2018 Notes could have been triggered by failure to notify the holders timely of a change in control, subsequent placement and failure to timely deliver shares to convert the 2018 Notes. The Company used a Lattice pricing model to value these derivative liabilities. The Lattice pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, required the Company to develop its own assumptions. Upon completing our fair value estimate of the derivative liabilities, the Company determined that the fair value exceeded the cash proceeds received and recorded a loss upon issuance. This loss was recorded within the “Change in fair value of derivative liabilities and loss on debt extinguishment” in our Consolidated Statements of Operations and the derivative liabilities are classified as short-term in the Consolidated Balance Sheet as of December 31, 2018, due to their maturity in April 2019. Upon exercise of the conversion option, the derivative liabilities and related debt host were accounted for as an extinguishment whereby a gain or loss was recognized in an amount equal to the difference between the recorded value of the liabilities and the fair value of the consideration issued to extinguish them. Residential Leases To determine lease classification, the Company evaluates lease terms to determine whether there is a transfer of ownership or bargain purchase option at the end of the lease, whether the lease term is greater than 75% of the useful life, or whether the present value of minimum lease payments exceed 90% of the fair value at lease inception. The Company’s leased systems are treated as sales-type leases under GAAP accounting policies due to the present value of their minimum lease payments exceeding 90% of the fair value at lease inception. Financing receivables are generated by solar energy systems leased to residential customers under sales-type leases. Financing receivables represents gross minimum lease payments to be received from customers over a period commensurate with the remaining lease term of up to 20 years and the systems estimated residual value, net of allowance for estimated losses. Initial direct costs for sales-type leases are recognized as cost of sales when the solar energy systems are placed in service. For systems classified as sales-type leases, the net present value of the minimum lease payments, net of executory costs, is recognized as revenue when the lease is placed in service. This net present value as well as the net present value of the residual value of the lease at termination are recorded as other assets in the Consolidated Balance Sheet. The difference between the initial net amounts and the gross amounts are amortized to revenue over the lease term using the interest method. The residual values of the Company’s solar energy systems are determined at the inception of the lease applying an estimated system fair value at the end of the lease term. RGS considers the credit risk profile for its lease customers to be homogeneous due to the criteria the Company uses to approve customers for its residential leasing program, which among other things, requires a minimum “fair” FICO credit quality. Accordingly, the Company does not regularly categorize its financing receivables by credit risk. Recently Issued Accounting Standards ASU 2018-20, ASU 2018-11, ASU 2018-01 and ASU 2016-02 In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company has adopted the new standard on January 1, 2019 and used the effective date as its date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’. The Company expects that this standard will have a material effect on our financial statements for contracts in which the Company is the lessee. While the Company continues to assess all of the effects of adoption, the Company currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and vehicle operating leases and (2) providing significant new disclosures about our leasing activities. The Company has made an accounting policy election to exclude immaterial leases from lease accounting and will continue to expense them as incurred similar to our capitalization policy. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company has also elected the practical expedient to not separate lease and non-lease components for all of our leases. The accounting standards noted above also requires lessors to classify leases as sales-type, direct financing or operating leases. The Company currently holds leases of solar systems where it is the lessor. While the Company continues to evaluate certain aspects of the new standard, it does not expect the new standard to have a material effect on its financial statements for contracts where the Company is the lessor and it does not expect a significant change in our sales-type leasing activities between now and adoption. The Company believes substantially all of its leases will continue to be classified as sales-type leases under the new standard. While the new standard identifies maintenance as a non-lease component of equipment lease contracts, the Company will account for solar system leases and associated maintenance service components as a single, combined lease component. Consequently, the Company does not expect the new standard’s changed guidance on contract components to significantly affect its financial reporting. ASU 2017-11 On July 13, 2017, the FASB issued Accounting Standards Update No. 2017-11 (“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 Noncontrolling Interests with a Scope Exception. Recently Adopted Accounting Standards ASU 2017-04 On January 26, 2017, the FASB issued Accounting Standards Update No. 2017-04 (“ASU 2017-04”), Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ASU 2014-09 On May 28, 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), which created Topic 606, Revenue from Contracts with Customers |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Revenue | 3. Revenue Effective January 1, 2018, the Company has adopted “ASC 606 – Revenue from Contracts with Customers Deferred Revenue When the Company receives consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract, it records deferred revenue, which represents a contract liability. The Company recognizes deferred revenue as net sales after it has satisfied its performance obligations to the customer and all revenue recognition criteria are met. Revenue Recognition – Installation of photovoltaic modules (“PV”) solar systems The Company uses standard contract templates to initiate sales with customers and determined that each project started during the year ended December 31, 2018 and each project that was not substantially complete at the adoption date, contains one performance obligation. Although the contract states multiple services which are capable of being distinct, they are considered a single integrated output to the customer which is customized for each customer. As such all the services promised within a contract are considered one performance obligation. The Company generally recognizes revenue for installation of PV solar systems over time following the transfer of control to the customer which typically occurs as the PV solar system is being installed. If control transfers over time, revenue is recognized based on the extent of progress towards the completion of the performance obligation. The method utilized by the Company to measure the progress towards completion requires judgment and is based on the products and services provided. The Company utilizes the input method to measure the progress of its contracts because it best depicts the transfer of assets to the customer which incurs as materials are consumed by the project. The input method measures the progress towards completion based on the ratio of costs incurred to date (“actual cost”) to the total estimated costs (“budget”) at completion of performance obligation. Revenue, including estimated fees, are recorded proportionally as costs are incurred. Costs to fulfill include materials, labor and/or subcontractors’ costs, and other direct costs. Indirect costs and costs to procure the panels, inverters, and other system miscellaneous costs needed to satisfy the performance obligation are excluded since the customer does not gain control of those items until delivered to the site. Including the costs of those items would overstate the extent of our performance. Each project’s transaction price is included within the contract and although there is only one performance obligation, changes to the contract price could take place after fulfillment of performance obligation. The Company has considered financing components on projects started during the year ended December 31, 2018 and elected the use of a practical expedient where an entity need not adjust the promised amount of consideration for the effects of a significant financing component if the entity expects, at contract inception, that the period between when the entity transfers a promised service to the customer and when the customer pays for that good or service will be one year or less. Typically, the payments are received as the performance obligation is being satisfied with a final payment received after the solar system has been installed. All receivables from projects are expected to be received within one year from project completion and there were no adjustments to the contract value. Under ASC 606, the Company is required to recognize as an asset the incremental costs of obtaining a contract with a customer if those costs are expected to be recovered. The Company incurs sales commissions that otherwise would not have been incurred if the contract had not been obtained. These costs are recoverable; however, the Company has elected the use of a practical expedient to expense these costs as incurred as the amortization period of the asset would be less than one year. Revenue Recognition – Operations & Maintenance The Company generally recognizes revenue for standard, recurring commercial operations and maintenance services over time as customers receive and consume the benefits of such services, which typically include corrective maintenance, data hosting or energy/deck monitoring services for a period. These services are treated as stand-ready performance obligations and are satisfied evenly over the length of the agreement, so the Company has elected a time-based method to measure progress and recorded revenue using a straight-line method. Revenue Recognition – Service & Warranty Warranties for workmanship and roof penetration are included within each contract. These warranties cannot be purchased separately from the related services, are intended to safeguard the customer against workmanship defects and does not provide any incremental service to the customer. It is necessary for the Company to perform the specified tasks to provide assurance that the final product complies with agreed-upon specifications and likely do not give rise to a separate performance obligation. The Company will continue to account for any related warranties in accordance with ASC 460-10 and record an accrual for potential warranty costs at the completion of a project. Any services provided to a customer outside of warranties such as system inspections are recognized upon completion of the service. Adoption of the standard related to revenue recognition had no impact to cash from or used in operating, financing, or investing on our consolidated cash flows statements. In the following table, revenue is disaggregated by primary geographical market and includes a reconciliation of the disaggregated revenue with the reportable segments for the years ended December 31, 2018 and 2017. Reportable Segments December 31, 2018 (in thousands) Primary Geographical Regions Solar Division POWERHOUSE™ Total reportable segments All other segments Total East $ 10,022 $ - $ 10,022 $ - $ 10,022 West 2,681 - 2,681 25 2,706 $ 12,703 $ - $ 12,703 $ 25 $ 12,728 Reportable Segments December 31, 2017 (in thousands) Primary Geographical Regions Solar Division POWERHOUSE™ Total reportable segments All other segments Total East $ 12,324 $ - $ 12,324 $ - $ 12,324 West 3,262 - 3,262 6 3,268 $ 15,586 $ - $ 15,586 $ 6 $ 15,592 |
Property and Equipment
Property and Equipment | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | 4. Property and Equipment Property and equipment, stated at lower of cost or estimated fair value, consists of the following as of December 31: (in thousands) 2018 2017 Buildings and leasehold improvements $ 441 $ 441 Furniture, fixtures and equipment 1,832 1,811 Software 2,135 2,135 Vehicles and machinery 1,142 1,167 Total property and equipment 5,550 5,554 Accumulated depreciation and amortization (4,772 ) (4,400 ) Total property and equipment, net $ 778 $ 1,154 Depreciation on other property, plant and equipment is calculated using the straight-line method to allocate their depreciable amounts over their estimated useful lives as follows: Useful lives Buildings 40 years Leasehold improvements 3-5 years Furniture, fixtures and equipment 3-5 years Software 3-15 years Vehicles and machinery 2-7 years For the years ended December 31, 2018 and 2017, depreciation expense was $0.4 million per annum. |
Accrued Liabilities
Accrued Liabilities | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Accrued Liabilities | 5. Accrued Liabilities Accrued expenses consist of the following: (in thousands) 2018 2017 Accrued Expenses $ 924 $ 524 Accrued Compensation 476 690 Other 69 130 Accrued Project Costs 102 130 Total $ 1,571 $ 1,474 |
Related Parties
Related Parties | 12 Months Ended |
Dec. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Parties | 6. Related Parties On May 23, 2017, the Company entered into an agreement with Mobomo, LLC (“Mobomo”) pursuant to the design and development of intellectual property at a cost of $0.5 million. The intellectual property consisted of an integrated mobile phone application and the new RGS 365™ customer portal. In 2018, Mobomo continued to provide data hosting services which totaled approximately $20,000. Mobomo’s Chief Executive Officer Brian Lacey is the son of the Company’s CEO Dennis Lacey. The Company approved the agreement in accordance with its related-party transaction policy. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 7. Commitments and Contingencies The Company leases office and warehouse space through operating leases. Some of the leases have renewal clauses, which range from one month to five years. The Company leases vehicles through operating leases for certain field personnel. Leases range up to five years with varying termination dates through May 2022. The following schedule represents the annual future minimum payments of all leases as of December 31, 2018: Future Minimum (in thousands) Lease Payments 2019 $ 848 2020 505 2021 378 2022 112 2023 and thereafter - Total minimum lease payments $ 1,843 The Company incurred office and warehouse rent expense of $0.6 million and $0.7 million for the years ended December 31, 2018 and 2017, respectively. The Company incurred automobile lease expense of $0.3 million and $0.4 million for the years ended December 31, 2018 and 2017, respectively. The Company is subject to risks and uncertainties in the normal course of business, including legal proceedings; governmental regulation, such as the interpretation of tax and labor laws; and the seasonal nature of its business due to weather-related factors. The Company has accrued for probable and estimable costs incurred with respect to identified risks and uncertainties based upon the facts and circumstances currently available. |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Shareholders' Equity | 8. Shareholders’ Equity January 2017 Reverse Stock Split On January 25, 2017, the Company executed a reverse stock split of all outstanding shares of the Company’s Class A common stock at a ratio of one-for-thirty, whereby thirty shares of Class A common stock were combined into one share of Class A common stock. The reverse split was previously authorized by a vote of the Company’s shareholders on January 23, 2017. The Company did not decrease its authorized shares of capital stock in connection with the reverse stock split. Share amounts are presented to reflect the reverse split for all periods. February 2017 Offerings On February 6, 2017, the Company closed a $11.5 million offering and sale of (a) units, “February 6 Primary Units,” each consisting of one share of the Company’s Class A common stock, and a Series K warrant to purchase one share of Class A common stock, and (b) units, “February 6 Alternative Units,” each consisting of a prepaid Series L warrant to purchase one share of Common Stock, and a Series K warrant pursuant to the Securities Purchase Agreement, dated as of February 1, 2017, by and among the Company and several institutional investors, and to public retail investors. As a result, the Company issued 2,096,920 February 6 Primary Units, 1,613,080 February 6 Alternative Units, 2,096,920 shares of Class A common stock, Series K warrants to purchase 3,710,000 shares of Class A common stock, and Series L warrants to purchase 1,613,080 shares of Class A common stock. The purchase price for a February 6 Primary Unit was $3.10 and the purchase price for a February 6 Alternative Unit was $3.09. The Company received net proceeds of approximately $10.5 million at the closing, after deducting commissions to the placement agents and estimated offering expenses payable by the Company associated with the offering. On February 9, 2017, the Company closed a $6 million offering and sale of (a) units, “February 9 Primary Units,” each consisting of one share of the Company’s Class A common stock, and a Series M warrant to purchase 75% of one share of Class A common stock, and (b) units, “February 9 Alternative Units,” each consisting of a prepaid Series N warrant to purchase one share of Class A common stock, and a Series M warrant, pursuant to the Securities Purchase Agreement, dated as of February 7, 2017, by and among the Company and several institutional and accredited investors. As a result, the Company issued 1,650,000 February 9 Primary Units, 750,000 February 9 Alternative Units, 1,650,000 shares of Common Stock as part of the February 9 Primary Units, Series M warrants to purchase 1,800,000 shares of Class A common stock, and Series N warrants to purchase 750,000 shares of Class A common stock. The purchase price for a February 9 Primary Unit was $2.50 and the purchase price for a February 9 Alternative Unit was $2.49. The Company received net proceeds of approximately $5.5 million at the closing, after deducting commissions to the placement agents and estimated offering expenses payable by the Company associated with the offering. January 2018 Offering On January 4, 2018, the Company closed a $1.8 million offering and sale of (a) 800,000 shares of Class A common stock, (b) a prepaid Series P Warrant to purchase 800,000 shares of Class A common stock, and (c) a Series O Warrant to purchase 1,600,000 shares of Class A common stock, pursuant to the Securities Purchase Agreement, dated as of January 2, 2018, by and between the Company and one unaffiliated institutional and accredited investor. The purchase price was $1.15 per share of Class A common. The Company received net proceeds of approximately $1.5 million at the closing, after deducting commissions to the placement agents and estimated offering expenses associated with the offering. 2018 Convertible Note Offering On March 30, 2018, the Company entered into a Securities Purchases Agreement with two unaffiliated institutional and accredited investors for a private placement (the "2018 Notes Offering", see Note 9) of up to $10.75 million in principal amount and $10 million funding amount (reflecting $750,000 of original issue discount) of the 2018 Notes, and Series Q Warrants to purchase 9,270,457 shares of Class A Common Stock. As of December 31, 2018, a total of 73 million shares of Class A common stock had been issued upon conversion of the 2018 Notes, and 8.7 million shares of Class A common stock had been issued upon exercise of the Series Q warrants in exchange for gross proceeds of $8.7 million, before placement agent fees and other expenses. Option Exercises, 2018 Convertible Note Conversions and Warrant Exercises During the twelve months ended December 31, 2018, the Company issued stock options as discussed in Note 11. Share-Based Compensation. During the twelve months ended December 31, 2018, the Company issued 800,000 shares of its Class A common stock upon exercise of Series P warrants and 81,507,793 shares upon conversion of the 2018 Notes and exercise of Series Q warrants. At December 31, 2018, RGS had the following shares of Class A common stock reserved for future issuance: Stock options and grants outstanding under incentive plans 1,206,645 Common stock warrants outstanding 8,714,871 2018 Notes outstanding - derivative liability 1,726,423 Total shares reserved for future issuance 11,647,939 The table below summarizes the Company’s warrant activity: Issuances Warrants outstanding at December 31, 2016 682,693 Issuances 8,178,580 Exercised (3,007,412 ) Warrants outstanding at December 31, 2017 5,853,861 Issuances 12,385,143 Expired (42,465 ) Exercised (9,481,668 ) Warrants outstanding at December 31, 2018 8,714,871 |
Convertible Debt
Convertible Debt | 12 Months Ended |
Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |
Convertible Debt | 9. Convertible Debt 2018 Convertible Note Offering On March 30, 2018, the Company entered into a Securities Purchase Agreement with two unaffiliated institutional and accredited investors for a private placement (the "2018 Note Offering") of up to $10.75 million in principal amount and $10 million funding amount (reflecting $750,000 of original issue discount) of Series A Senior Convertible Notes (“Series A Notes”), Series B Senior Secured Convertible Notes (“Series B Notes,” and collectively with the Series A Notes, the “2018 Notes”), and Series Q warrants (the “Series Q Warrants”) to purchase 9,126,984 shares of Class A Common Stock. On April 9, 2018, the Company closed the 2018 Note Offering. At the closing on April 9, 2018, the Company received $5 million of the gross proceeds and two secured promissory notes, one note from each investor, in a combined aggregate amount of $5 million (each, an “Investor Note”), secured by cash and/or securities held in investor accounts. These Investor Notes are presented net of the convertible debt carrying amount on the Consolidated Balance Sheets due to right of offset. All amounts outstanding under the 2018 Notes matured and were due and payable on or before the one-year anniversary of the issuance of the 2018 Notes (“Maturity Date”). The 2018 Notes did not incur interest other than upon the occurrence of an event of default, in which case the 2018 Notes bore interest at 18% per year (“Interest Rate”). The 2018 Notes were convertible at any time, at the option of the holders, into shares of Common Stock at a conversion price. The initial fixed conversion price (“ICP”) was $1.2405 per share, subject to reduction, as described below, and adjustment for stock splits, stock dividends, and similar events. The ICP of the 2018 Notes were subject to reduction subsequent to shareholder approval. On June 21, 2018 the Company held its 2018 annual shareholder meeting at which time the shareholders approved the 2018 Note Offering and thereby initiating a reset period which enabled the note holders to earn additional amounts (“Additional Amounts”), effectively a make-whole for amounts previously converted. As a result of the shareholder approval, the conversion price of the 2018 Notes and the exercise price of the Series Q Warrants were reset. Subsequent to that date, the Company agreed to permanently reduce the conversion price of the 2018 Notes from $0.3223 to $0.3067 effective on August 27, 2018. The 2018 Notes were convertible at any time, at the option of the holder, into shares of the Company’s Class A common stock at a conversion price equal to $0.3067. The Series Q Warrants were exercisable into shares of the Company’s Class A common stock at an exercise price of $0.3223 per share. If the Company were to have consummated a Subsequent Placement, subject to some exceptions, a Note holder would have had the right to require that the Company redeem, in whole or in part, a portion of the amounts owed by the Company to such holder under a Note in cash. A Note holder could also have required the Company to redeem all or a portion of its 2018 Note in connection with a transaction resulting from a Change of Control and upon the occurrence of an event of default. The 2018 Notes contained customary events of default, including but not limited to: (i) failure to file or have declared effective by the SEC the applicable registration statement required by the Registration Rights Agreement within certain time periods or failure to keep the registration statement effective as required by the Registration Rights Agreement, (ii) failure to maintain the listing of the Common Stock, (iii) failure to make payments when due under the Notes, (iv) breaches of covenants, and (iv) bankruptcy or insolvency. The occurrence of an event of default under the 2018 Notes would have triggered default interest and would have caused an Equity Condition Failure, which may mean that the Company would have been unable to force mandatory conversion of the Notes and that Note Holders may not be required to prepay the Investor Note under a mandatory prepayment event. Following an event of default, Note holders could have required the Company to redeem all or any portion of their Notes in cash at a conversion price equal to the greater of (i) 125% of the amount to be redeemed, and (ii) the product of (A) the amount to be redeemed divided by the conversion price, multiplied by (B) the product of (x) 125% multiplied by (y) the greatest closing sale price of the Common Stock on any trading day during the period commencing on the date immediately preceding such event of default and ending on the date the Company makes the entire redemption payment. The principal amount of the Series B Notes was considered restricted principal until collection of the Investor Notes was received by the Company (“Restricted Principal”). Upon any offset, the restricted principal under a Series B Note would automatically and simultaneously be reduced, on a dollar-for-dollar basis, in an amount equal to the principal amount of an investor’s Investor Note cancelled and offset. Under the terms of the Series B Notes, the Company granted a security interest to each investor in such investor’s Investor Note to secure the Company’s obligations under the applicable Series B Note. Each investor perfected its security interest by taking possession of such investor’s Investor Note at the closing. Each Series Q Warrant is immediately exercisable and will expire five years from the date of issuance. Initially, only 75% of the shares of Common Stock issuable upon exercise of a Series Q Warrant may be exercised, which amount increases upon an investor’s prepayment under such investor’s Investor Note. A holder may not exercise any of the Series Q Warrants, and the Company may not issue shares of Common Stock upon exercise of any of the Series Q Warrants if, after giving effect to the exercise, a holder together with (i) any investment vehicle, including, any funds, feeder funds or managed accounts, currently, or from time to time after the issuance date, directly or indirectly managed or advised by the holder’s investment manager or any of its affiliates or principals, (ii) any direct or indirect affiliates of the holder or any of the foregoing, (iii) any person acting or who could be deemed to be acting as a group together with the holder or any of the foregoing and (iv) any other persons whose beneficial ownership of the Company’s Common Stock would or could be aggregated with the holder’s and certain other “Attribution Parties” would beneficially own in excess of 4.99 or 9.99%, as elected by each investor at closing, of the outstanding shares of Common Stock. At each holder’s option, the cap may be increased or decrease to any other percentage not in excess of 9.99%, except that any increase will not be effective until the 61st day after notice to the Company. As disclosed in Note 2. Significant Accounting Policies, the warrants issued in connection with the 2018 Note Offering as well as the embedded derivatives were accounted for as liabilities that had been initially measured and recorded at fair value and were revalued at each balance sheet date after their initial issuance with the changes in value recorded in earnings. These conversion options accounted for as embedded derivatives were incorporated into the 2018 Notes to incentivize the holders to provide the Company with short term funding for POWERHOUSE™. See Note 10. Fair Value Measurements for information about the techniques the Company uses to measure the fair value of our derivative instruments. The fair value of the embedded derivatives and Series Q warrants exceeded the proceeds received from the 2018 Notes Offering which was recognized as a loss within the line item “Change in fair value of derivative liabilities and loss on debt extinguishment” in the statement of operations. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 10. Fair Value Measurements The Company complies with the provisions of FASB ASC No. 820, Fair Value Measurements and Disclosures ASC 820-10-35 discusses valuation techniques, such as the market approach (comparable market prices), the income approach (present value of future income or cash flow), and the cost approach (cost to replace the service capacity of an asset or replacement cost). The statement utilizes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels. The following is a brief description of those three levels: Level 1 Inputs – Level 1 inputs are unadjusted quoted prices in active markets for assets or liabilities identical to those to be reported at fair value. An active market is a market in which transactions occur for the item to be fair valued with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 Inputs – Level 2 inputs are inputs other than quoted prices included within Level 1. Level 2 inputs are observable either directly or indirectly. These inputs include: (a) Quoted prices for similar assets or liabilities in active markets; (b) Quoted prices for identical or similar assets or liabilities in markets that are not active, such as when there are few transactions for the asset or liability, the prices are not current, price quotations vary substantially over time or in which little information is released publicly; (c) Inputs other than quoted prices that are observable for the asset or liability; and (d) Inputs that are derived principally from or corroborated by observable market data by correlation or other means. Level 3 Inputs – Level 3 inputs are unobservable inputs for an asset or liability. These inputs should be used to determine fair value only when observable inputs are not available. Unobservable inputs should be developed based on the best information available in the circumstances, which might include internally generated data and assumptions being used to price the asset or liability. When determining the fair value measurements for assets or liabilities required or permitted to be recorded at and/or marked to fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. When possible, the Company looks to active and observable markets to price identical assets. When identical assets are not traded in active markets, the Company looks to market observable data for similar assets. The following tables present the fair values of derivative instruments included in our consolidated balance sheets as of December 31, 2018 and 2017 (in thousands): Fair Value of Derivative Instruments Liability Derivatives 2018 2017 Balance at December 31, 2018 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments Deriviative liability Convertible debt, net $ 344 N/a $ - The Effect of Derivative Instrument on the Statement of Operations for the Nine Months Ended December 31, 2018 and 2017 Amount of Loss Recognized Derivatives not designated as Location of Loss Recognized in 2018 2017 2018 Notes Conversion Options Change in fair value of derivative liabilities and loss on debt extinguishment $ (27,134 ) $ - Amortization of debt discount & deferred loan costs (1,042 ) - $ (28,176 ) $ - The Company accounts for Series Q warrants in accordance with ASC 480. The Series Q warrants are accounted for as liabilities due to provisions in the warrants allowing the warrant holders to request redemption, upon a change of control, and failure to timely deliver shares of Class A common stock upon exercise or default. The Company classifies these warrant liabilities on the Consolidated Balance Sheet as long-term liabilities, which are revalued at each balance sheet date subsequent to their initial issuance. The Company used a Monte Carlo pricing model to value these warrant liabilities. The Monte Carlo pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, requires the Company to develop its own assumptions. The following tables summarize the basis used to measure certain financial assets and liabilities at fair value on a recurring basis in the consolidated balance sheets: Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Items Inputs Inputs Balance at December 31, 2018 (in thousands) Total (Level 1) (Level 2) (Level 3) Common stock warrant liability $ 511 - - $ 511 Derivative liability 344 - - 344 $ 855 - - $ 855 The following table shows the reconciliation from the beginning to the ending balance for the Company’s common stock warrant liability and embedded derivative liability measured at fair value on a recurring basis using significant unobservable inputs (i.e. Level 3) for the period ended December 31, 2018: Embedded Common Stock derivative (in thousands) warrant liability liability Total Fair value of financial liabilities at December 31, 2017 $ 76 $ - $ 76 Common stock warrant liability 6,818 - 6,818 Expiration of common stock warrant liabilities (48 ) - (48 ) Change in the fair value of common stock warrant liabilities, net (1,940 ) - (1,940 ) Adjustment for exercise of common stock warrant liabilities (4,395 ) - (4,395 ) Derivative liability - 3,195 3,195 Investor Notes (109 ) (109 ) Change in the fair value of derivative liabilities and additional amounts earned - 17,910 17,910 Conversions of 2018 Notes - (20,652 ) (20,652 ) Fair value of financial liabilities at December 31, 2018 $ 511 $ 344 $ 855 2018 Notes Derivative Liability The fair value of the 2018 Notes derivative liabilities was derived using a Lattice pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions. The assumptions used on April 9, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 to value the derivative liabilities are as follows: Conversion Closing Market Risk-free Dividend Market Remaining Debt Soft Call First Second Derivative Liability April 09, 2018 $ 1.26 $ 0.85 2.08 % 0.00 % 110 % 1.00 60 % $ 2.52 20 % 25 % Derivative Liability June 30, 2018 $ 0.55 $ 0.57 2.23 % 0.00 % 130 % 0.78 60 % $ 2.52 20 % 25 % Derivative Liability September 30, 2018 $ 0.31 $ 0.39 2.36 % 0.00 % 125 % 0.53 60 % $ 2.52 20 % 25 % Derivative Liability December 31, 2018 $ 0.31 $ 0.52 2.45 % 0.00 % 90 % 0.28 60 % $ 2.52 20 % 25 % Common Stock Warrants The fair value of Series Q Warrants was derived using a Monte Carlo pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, requiring the Company to develop its own assumptions. The assumptions used on April 9, 2018, June 30, 2018, September 30, 2018 and December 31, 2018 to value the common stock warrant liabilities are as follows: Exercise Price Strike Floor Closing Market Price (average) Risk-free Rate Dividend Yield Market Price Volatility Remaining Term (years) Warrant Liability April 09, 2018 $ 1.12 $ 0.97 $ 0.85 2.60 % 0.00 % 120 % 5.00 Warrant Liability June 30, 2018 $ 0.55 $ 0.19 $ 0.57 2.72 % 0.00 % 115 % 4.78 Warrant Liability September 30, 2018 $ 0.32 $ 0.19 $ 0.39 2.93 % 0.00 % 115 % 4.53 Warrant Liability December 31, 2018 $ 0.32 N/a $ 0.52 2.49 % 0.00 % 120 % 4.28 2018 Options The determination of the estimated fair value of the 2018 Options (as defined in Note 10) using the Black-Scholes option-pricing model was affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. Expected volatilities were based on a value calculated using the historical stock price volatility. Expected life was based on the specific vesting terms of the option and anticipated changes to market value and expected employee exercise behavior. The risk-free interest rate used in the option valuation model was based on U.S. Treasury zero-coupon securities with remaining terms similar to the expected term on the options. RGS does not anticipate paying any cash dividends on its Class A common stock in the foreseeable future and, therefore, an expected dividend yield of zero was used in the option valuation model. The assumptions used to value to 2018 Options as of December 31, 2018 are as follows: 2018 Non-Qualified Stock Options Grant Date Vesting Period Expected Life Expected Dividend Rate Risk-free Rate Market Price Volatility June 21, 2018 2.78 years 4.2 years 0 % 2.70 % 148.77 % September 4, 2018 2.82 years 5.7 years 0 % 2.78 % 147.40 % September 10, 2018 2.81 years 5.7 years 0 % 2.83 % 146.66 % October 15, 2018 2.96 years 4.3 years 0 % 2.96 % 149.82 % October 29, 2018 2.92 years 4.3 years 0 % 2.87 % 150.34 % Nonrecurring Fair Value Measurements The Company tests its long-lived assets for impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable or that the carrying value may exceed its fair value. As described in Note 12. Goodwill Impairment, during the second quarter of 2018, the Company recorded a $1.3 million impairment charge related to goodwill measured at fair value on a nonrecurring basis. When recognizing an impairment charge, the carrying value of the asset is reduced to fair value and the difference is recorded within operating earnings in our consolidated statements of operations. The fair value measurements included in the indefinite-lived intangible impairments were primarily based on significant unobservable inputs (Level 3) developed using company-specific information. Other Financial Instruments The Company's financial instruments consist primarily of cash and cash equivalents, accounts receivable, accounts payable, deferred revenue and convertible debt. The carrying values of these financial instruments approximate their fair values, due to their short-term nature. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | 11. Share-Based Compensation At December 31, 2017, the Company’s 2008 Long-Term Incentive Plan provided that an aggregate of 52,536 shares of its Class A common stock could be issued or subject to awards under the plan. Employees, members of the Board of Directors, consultants, service providers and advisors were eligible to participate in the 2008 Long-Term Incentive Plan. The 2008 Long-Term Incentive Plan expired under its terms in 2018. All outstanding options are nonqualified and were generally granted with an exercise price equal to the closing market price of the Company’s Class A common stock on the date of the grant. Options vest based on service conditions, performance (attainment of a certain amount of pre-tax income for a given year), or some combination thereof. Grants typically expire seven years from the date of grant. On June 21, 2018, Company shareholders approved the Real Goods Solar 2018 Long-Term Incentive Plan (the “2018 Incentive Plan”) which allows the Company to issue, or grant awards for, up to 1,300,000 shares of Class A common stock. Employees or individuals who perform services for the Company are eligible to participate in the 2018 Incentive Plan, which terminates upon the earlier of a board resolution terminating the 2018 Incentive Plan or ten years after the effective date of June 21, 2018, unless extended by action of the Board of Directors for up to an additional five years. All options are non-qualified and are generally granted with an exercise price equal to the closing market price of the Company’s Class A common stock on the date of the grant. Under the 2018 Incentive Plan, the Company granted multiple non-qualified stock options (“2018 Options”) with various requisite service periods, described in Note 9 Fair Value Measurements, which expire seven years from the grant date. On the last day of each calendar quarter occurring after the grant date, the 2018 Options will vest at 8.3% contingent on continuous employment. The 2018 Options are classified as equity and measured using the “fair-value-based method” with share-based compensation expense recognized in the income statement on a straight-line basis over the requisite service for the entire award. The determination of the estimated fair value of share-based payment awards on the date of grant using the Black-Scholes option-pricing model is affected by the Company’s stock price as well as assumptions regarding a number of complex and subjective variables. Expected volatilities are based on a value calculated using the combination of historical volatility of comparable public companies in RGS’ industry and its stock price volatility since the Company’s initial public offering. Expected life is based on the specific vesting terms of the option and anticipated changes to market value and expected employee exercise behavior. The risk-free interest rate used in the option valuation model is based on U.S. Treasury zero-coupon securities with remaining terms similar to the expected term on the options. RGS does not anticipate paying any cash dividends on its Class A common stock in the foreseeable future and, therefore, an expected dividend yield of zero is used in the option valuation model. RGS is required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods if actual forfeitures differ from those estimates. In accordance with ASC 718, an entity can make an accounting policy to either estimate the number of awards that are expected to vest or account for forfeitures as they occur. The Company utilizes the plan life-to-date forfeiture experience rate to estimate option forfeitures and records share-based compensation expense only for those awards that are expected to vest. The tables below present a summary of the Company’s option activity as of December 31, 2018 and 2017 and changes during the years then ended: Weighted- Average Weighted- Remaining Average Contractual Aggregate Exercise Term Intrinsic Shares Price (Yrs) Value Outstanding at January 1, 2017 185 $ 15,736.67 3.30 $ - Granted - - Exercised - - Forfeited or expired (36 ) 4,990.00 Outstanding at December 31, 2017 149 $ 18,452.38 2.60 $ - Exercisable at December 31, 2017 141 $ 19,418.30 2.80 $ - Granted 1,331,500 0.96 Exercised - - Forfeited or expired (125,004 ) 1.13 Outstanding at December 31, 2018 1,206,645 $ 3.22 6.58 $ - Exercisable at December 31, 2018 268,189 $ 11.26 6.53 $ - The Company granted 1,331,500 stock options and cancelled 125,004 stock options and did not grant any stock options and cancelled 36 stock options during 2018 and 2017, respectively. The Company’s share-based compensation cost charged against income for continuing operations was approximately $0.2 million and $0.2 million during the years 2018 and 2017, respectively. |
Goodwill Impairment
Goodwill Impairment | 12 Months Ended |
Dec. 31, 2018 | |
Goodwill and Intangible Asset Impairment [Abstract] | |
Goodwill Impairment | 12. Goodwill Impairment The Company performed its annual test of goodwill as of June 30, 2018, and based on the results of this test, the Company determined that the fair value of the goodwill no longer exceeded the carrying amount. The fair value was determined using a discounted cash flow valuation technique and resulted in the full impairment of goodwill of $1.3 million charging an impairment loss to the consolidated statement of operations during the twelve months ended December 31, 2018. |
Supplier Concentration
Supplier Concentration | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Supplier Concentration | 13. Supplier Concentration The Company relies on a limited number of third-party suppliers to provide the components used in our POWERHOUSE™ in-roof solar shingles and our solar energy systems. The production of POWERHOUSE™ solar laminates, connectors and wire harnesses is concentrated in China so it is reasonably possible that operations could be disrupted in the future. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 14. Income Taxes On December 22, 2017, The President of the United States signed the TCJA. The enactment of TCJA requires companies, under Accounting Standards Codification (ASC) 740, Income Taxes, to recognize the effects of changes in tax laws and rates on deferred tax assets and liabilities and the retroactive effects of changes in tax laws in the period in which the new legislation is enacted. The TCJA would permanently reduce the maximum corporate income tax rate from 35% to 21% effective for tax years beginning after December 31, 2017, and the future benefits of existing deferred tax assets would need to be computed at the new tax rate. In addition to the change in the corporate income tax rate, the TCJA further introduced a number of other changes including a one-time transition tax via a mandatory deemed repatriation of post-1986 undistributed foreign earnings and profits; the introduction of a tax on global intangible low-taxed income (“GILTI”) for tax years beginning after December 31, 2017; the limitation of deductible net interest to 30% of adjustable taxable income; the further limitation of the deductibility of share-based compensation of certain highly compensated employees; the ability to elect to accelerate bonus depreciation on certain qualified assets; and the Base Erosion and Anti-Abuse Tax ("BEAT"), amongst other changes. The Company recognized the income tax effects of the 2017 Tax Act in its financial statements in accordance with Staff Accounting Bulletin (SAB) No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes. The Company has finalized its accounting for the income tax effects of the 2017 Tax Act. The tax effects recorded primarily include an estimate of the impact of the reduction in the U.S. tax rate on our deferred tax assets and liabilities in 2017. The Company had $0 of income tax expense (benefit) for the years ended December 31, 2018 and 2017. Variations from the federal statutory rate are as follows: Years ended December 31, (in thousands) 2018 2017 Expected federal income tax expense (benefit) at statutory rate of 21% and 35% at December 31, 2018 and 2017, respectively $ (8,888 ) $ (6,191 ) Effect of permanent other differences Debt extinguishment 5,145 170 Transaction Cost Amortization 552 - Other 319 (28 ) Effect of valuation allowance 3,479 (12,572 ) Other 39 (1,147 ) Impact of change in federal tax rate on deferred tax asset - 20,479 State income tax expense (benefit), net of federal benefit (646 ) (690 ) $ - $ 21 Deferred income taxes reflect net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of the net accumulated deferred income tax assets shown on a gross basis as of December 31, 2018 and 2017 are as follows: (in thousands) 2018 2017 Deferred tax assets (liabilities) Provision for doubtful accounts $ 138 $ 195 Inventory-related expense 195 209 Accrued liabilities 367 444 Depreciation and amortization 2,084 2,128 Net operating loss carry-forwards 39,154 35,754 Other 705 719 Total deferred tax assets 42,643 39,449 Valuation allowance (42,643 ) (39,449 ) Total net deferred tax assets $ - $ - At December 31, 2018, RGS had $140.7 million of federal net operating loss carryforwards expiring, if not utilized, beginning in 2020 and $14.1 million with no expiration. Additionally, the Company had $142.8 million of state net operating loss carryforwards expiring, it not utilized, beginning in 2020. Utilization of the net operating loss carry-forwards may be subject to annual limitation under applicable federal and state ownership change limitations and, accordingly, net operating losses may expire before utilization. The Company has not completed a Section 382 analysis through December 2018 and therefore has not determined the impact of any ownership changes, as defined under Section 382 of the Internal Revenue Code has occurred in prior years. Therefore, the net operating loss carryforwards above do not reflect any possible limitations and potential loss attributes to such ownership changes. However, the Company believes that upon completion of a Section 382 analysis, as a result of prior period ownership changes, substantially all of the net operating losses will be subject to limitation. The Company’s valuation allowance increased by approximately $3.5 million for the year ended December 31, 2018 as a result of its operating loss for the year. The valuation allowance was determined in accordance with the provisions of ASC 740, Income Taxes, which requires an assessment of both negative and positive evidence when measuring the need for a valuation allowance. Based upon the available objective evidence and the Company’s history of losses, management believes it is more likely than not that the net deferred tax assets will not be realized. At December 31, 2018, the Company has a valuation allowance against its deferred tax assets net of the expected income from the reversal of its deferred tax liabilities. The Company’s predecessor, Real Goods Trading Corporation, was acquired by Gaiam, Inc. (now known as Gaia, Inc. and hereinafter as Gaia) in 2001. Gaia operated Real Goods Trading Corporation essentially as a separate business until 2008 when operations were consolidated into the corporate entity, Real Goods Solar, Inc., upon its formation. Following the Company’s initial public offering, a tax sharing agreement was entered into with Gaia. The Company is required, under the terms of its tax sharing agreement with Gaia, to distribute to Gaia the tax effect of certain tax loss carryforwards as utilized by the Company in preparing its federal, state and local income tax returns. At December 31, 2018, utilizing the new federal income tax rate of 21%, the Company estimates that the maximum amount of such distributions to Gaia could aggregate $1.1 million. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 15. Segment Information Financial information for the Company’s segments and a reconciliation of the total of the reportable segments’ income (loss) from operations (measures of profit or loss) to the Company’s consolidated net loss are as follows: (in thousands) 2018 2017 Contract revenue: Solar Division 12,703 15,586 POWERHOUSE™ - - Other 25 6 Consolidated contract revenue 12,728 15,592 Operating loss from continuing operations: Solar Division (5,855 ) (8,729 ) POWERHOUSE™ (598 ) (20 ) Other (8,518 ) (8,637 ) Operating Loss (14,971 ) (17,386 ) Reconciliation of consolidated loss from operations to consolidated net loss: Other income 1,063 68 Change in fair value of derivative liabilities and loss on debt extinguishment (27,134 ) (379 ) Amortization of debt discount and deferred loan costs (1,042 ) (3 ) Net loss (42,084 ) (17,700 ) The following is a reconciliation of reportable segments’ assets to the Company’s consolidated total assets. The Other segment includes certain unallocated corporate amounts. (in thousands) 2018 2017 Total assets: Solar Division $ 10,615 $ 9,840 POWERHOUSE™ 1,366 1,140 Other 4,279 3,278 $ 16,260 $ 14,258 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 16. Subsequent Events On March 29, 2019, the Company announced an operational realignment to exit its mainland residential solar business so as to focus on the POWERHOUSE™ in-roof shingle market. Revenues and net loss in 2018 for the mainland residential solar business were approximately $8.9 million and $6.3 million, respectively. On April 4, 2019, the Company closed a registered offering in which it issued and sold (i) 15,938,280 shares of Class A common stock, (ii) prepaid Series S Warrants to purchase 1,430,141 shares of Class A common stock and (iii) Series R Warrants to purchase 17,368,421 shares of Class A common stock pursuant to the terms of the Securities Purchase Agreement dated April 2, 2019 between the Company and three institutional and accredited investors. The investors paid $0.19 per share of Class A common stock and $0.18 per share of Class A common stock underlying the Series S Warrant for aggregate gross proceeds of $3.3 million at the closing and before $0.34 million of expenses. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with GAAP requires the Company to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience and on various other assumptions believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Significant estimates are used to value warranty liabilities, the fair value of derivative liabilities embedded in complex financial instruments, common stock warrants, and allowance for doubtful accounts. Actual results could differ materially from those estimates. |
Discontinued Operations | Discontinued Operations During 2014, the Company committed to a plan to sell certain contracts and rights comprised of the Company’s large commercial installations business, otherwise known as the Company’s former Commercial segment. The Company had previously reported this business as a discontinued operation, separate from the Company’s continuing operations. As of December 31, 2018, this business no longer met the criteria to be presented as discontinued operations. The remaining assets and liabilities were reclassified out of discontinued operations to continuing operations on the consolidated balance sheet as of December 31, 2017. Income from discontinued operations on the consolidated statements of operations was reclassified into the loss related to current continuing operations for the years ended December 31, 2018 and 2017 and had no impact on net loss. References to any gains or losses from discontinued operations as well as net cash used or provided by discontinued operations were removed, with these amounts reclassified into the continuing operations figures for the years ending December 31, 2018 and 2017. The 2017 financial statements have been reclassified to eliminate the presentation of the business as a discontinued operation and did not result in a material change. |
Cash | Cash The Company considers all highly liquid instruments with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of demand deposit accounts with financial institutions that are denominated in U.S. dollars |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability of its customers to make required payments. The Company estimates anticipated losses based on the expected collectability of all accounts receivable, taking into account collection history, number of days past due, identification of specific customer exposure and current economic trends. When the Company determines a balance is uncollectible and no longer actively pursues collection of the account, it is written off. The allowance for doubtful accounts was $0.5 million and $0.8 million December 31, 2018 and 2017, respectively. |
Inventory | Inventory Inventory for our Solar Division consists primarily of solar energy system components (such as solar panels and inverters) and its cost is determined by the first-in, first-out ("FIFO") method. The inventory is stated at the lower of cost or net realizable value with an allowance for slow moving and obsolete inventory items based on an estimate of the markdown to the retail price required to sell or dispose of such items. The Company has an allowance for obsolete or slow-moving inventory of $0.7 and $0.6 million at December 31, 2018 and 2017, respectively. POWERHOUSE™ inventories are recorded at lower of cost (incurred from third party supply channel manufacturers) or net realizable value. Cost is determined using the FIFO method. Management will establish an estimated excess and obsolete inventory reserve based on slow-moving and obsolete inventory. At December 31, 2018, there was no excess and obsolete inventory reserve. |
Property and Equipment | Property and Equipment Property and equipment is stated at cost less accumulated depreciation and amortization. Depreciation of property and equipment is computed on the straight-line method over estimated useful lives, generally three to twenty years. RGS amortizes leasehold and building improvements over the shorter of the estimated useful lives of the assets or the remaining term of the lease or remaining life of the building, respectively. |
Goodwill and Purchased Intangibles | Goodwill and Purchased Intangibles Intangible assets arising from business combinations, such as acquired customer contracts and relationships (collectively, “customer relationships”), licenses, trademarks, non-compete agreements are initially recorded at fair value. Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. The Company early adopted ASU 2017-04 during the second quarter of 2018 while performing its annual impairment test. The Company’s impairment assessment begins with a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. The qualitative assessment includes comparing the overall financial performance of the reporting units against the planned results used in the last quantitative goodwill impairment test. If it is determined under the qualitative assessment that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then a quantitative impairment test is performed. The estimated fair value of the reporting unit is compared with its carrying value (including goodwill) and if the carrying value exceeds estimated fair value, an impairment charge is recorded. As a result of the annual impairment test, the Company fully impaired the Goodwill balance charging an impairment loss to the Consolidated Statement of Operations. Fair value of the reporting unit is determined using a discounted cash flow analysis. The use of present value techniques requires us to make estimates and judgments about the Company’s future cash flows. These cash flow forecasts will be based on assumptions that are consistent with the plans and estimates the Company uses to manage its business. The process of evaluating the potential impairment of goodwill is highly subjective and requires significant judgment at many points during the analysis. Application of alternative assumptions and definitions could yield significantly different results. The Company capitalized the up-front POWERHOUSE™ 3.0 license payment, costs to obtain UL certification and legal costs to acquire the License. The intangible asset is amortized to operations, commencing November 2018 after UL certification, on a straight-line basis over the expected life of the License through 2034. As of December 31, 2018, the intangible asset had a carrying cost of $3.2 million, with $0.03 million in related amortization. The estimated amortization expense for each of the five succeeding fiscal years is expected to be $0.2 million per annum. Intangible assets with finite useful lives are amortized over their respective estimated useful lives and reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. |
Revenue Recognition | Revenue Recognition For the Company’s significant accounting policy related to revenue please see Note 3. Revenue. |
Share-Based Compensation | Share-Based Compensation The Company recognizes compensation expense for share-based awards based on the estimated fair value of the award on the date of grant and the probable attainment of a specified performance condition or over a service period. The Company uses the Black-Scholes option valuation model to estimate the fair value for purposes of accounting and disclosures. In estimating this fair value, certain assumptions are used (see Note 11. Share-Based Compensation), including the expected life of the option, risk-free interest rate, dividend yield, volatility and forfeiture rate. The use of different estimates for any one of these assumptions could have a material impact on the amount of reported compensation expense. |
Income Taxes | Income Taxes The Company recognizes income taxes under the asset and liability method. Deferred income taxes are recognized based on temporary differences between financial reporting and income tax basis of assets and liabilities, using current enacted income tax rates and regulations. These differences will result in taxable income or deductions in future years when the reported amount of the asset or liability is recovered or settled, respectively. Considerable judgment is required in determining when these events may occur and whether recovery of an asset is more likely than not. RGS has significant net operating loss carry-forwards and evaluates at the end of each reporting period whether it expects it is more likely than not that the deferred tax assets will be fully recoverable and provides a tax valuation allowance as necessary. A valuation allowance is established if it is more likely than not that a deferred tax asset will not be realized. In determining the appropriate valuation allowance, the Company considered projected realization of tax benefits based on expected levels of future taxable income, available tax planning strategies, and its overall deferred tax position. To identify any uncertain tax positions, the Company reviews (1) the decision to exclude from the tax return certain income or transactions; (2) the assertion that a particular equity restructuring (e.g., a spin-off transaction) is tax-free when that position might actually be uncertain, and; (3) the decision not to file a tax return in a particular jurisdiction for which such a return might be required in tax years that are still subject to assessment or challenge under relevant tax statutes. The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. The Company records interest related to unrecognized tax benefits in interest expense and penalties in selling, general, and administrative expenses when applicable. |
Warranties | Warranties The Company warrants its EPC solar energy systems sold to customers for up to 10 years against defects in installation workmanship. The manufacturers’ warranties on the solar energy system components, which are typically passed through to the customers, typically have product warranty periods of 10 years and a limited performance warranty period of 25 years. The Company generally provides for the estimated cost of warranties at the time the related revenue is recognized. The Company also maintains specific warranty liabilities for large commercial customers. The Company assesses the accrued warranty reserve quarterly and adjusts the amounts as necessary based on actual experience and changes in future estimates. The Company’s manufacturing warranties for its POWERHOUSE™ solar shingle, are an 11-year product warranty, which is the standard product warranty of most traditional solar panels today, and a 24-year power production warranty. The Company receives warranties from its supply chain matching the terms of the POWERHOUSE™ solar shingle warranty. As of December 31, 2018, there were no POWERHOUSE™ sales which required an estimate of warranty liability. |
Net Loss per Share | Net Loss per Share RGS computes net loss per share by dividing net income (loss) by the weighted average number of shares of common stock outstanding for the period. Diluted net loss per share reflects the potential dilution that could occur if options or warrants to issue shares of the Company’s Class A common stock were exercised. Common share equivalents of 10,445,294 and 5,857,861 shares have been omitted from net loss per share for 2018 and 2017, respectively, as they are anti-dilutive. The Series O warrants, Series Q warrants, and the 2018 Notes are considered participating securities, and as such, are entitled to participate in any dividends or distribution of assets made by the Company. There was no effect on earnings per share for these participating securities as the Company operated with a net loss for both 2018 and 2017. See Note 8. Shareholders’ Equity for a description of these transactions. The following table sets forth the computation of basic and diluted net income (loss) per share: For the Years Ended December 31, (In thousands, except per share data) 2018 2017 Numerator for basic and diluted net loss per share $ (42,084 ) $ (17,700 ) Denominator: Weighted average shares for basic net loss per share 35,618 6,950 Effect of dilutive securities: Weighted average of common stock, stock options and warrants - - Denominators for diluted net loss per share 35,618 6,950 Net loss per share—basic and diluted $ (1.18 ) $ (2.55 ) |
Segment Information | Segment Information Operating segments are defined as components of a company about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is the executive team. Based on the financial information presented to and reviewed by the chief operating decision maker in deciding how to allocate the resources and in assessing the performance of the Company, the Company has determined that it has three reporting segments: Solar Division, POWERHOUSE™ and corporate expenses (“other segment”). |
Common Stock Warrants | Common Stock Warrants The Company accounts for common stock warrants as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. Certain of the Company’s warrants are accounted for as liabilities due to redemption provisions that are outside the control of the Company. The Company classifies these warrant liabilities with maturities of five years on the Consolidated Balance Sheet as long-term liabilities. They are revalued at each balance sheet date after their initial issuance with changes in the value recorded in earnings. The Company used a Monte Carlo pricing model to value these warrant liabilities. The Company also has issued common stock warrants which have been classified in equity. Upon exercise of the warrants, the Company determines the fair value of the warrants exercised using the share price and records the impact to common stock and additional paid-in capital. |
Derivatives | Derivatives The Company’s Senior Convertible Notes issued on April 9, 2018 (the "2018 Notes") contained conversion features and various redemption clauses that were required to be bifurcated and were initially measured and recorded at fair value and were revalued at each balance sheet date with changes in the value recorded in earnings. Each of the 2018 Notes gave the holder the right to convert the 2018 Notes into shares of Class A common stock at a set strike price (“conversion feature”). In addition to the conversion feature, redemption of the 2018 Notes could have been triggered by failure to notify the holders timely of a change in control, subsequent placement and failure to timely deliver shares to convert the 2018 Notes. The Company used a Lattice pricing model to value these derivative liabilities. The Lattice pricing model, which is based, in part, upon unobservable inputs for which there is little or no market data, required the Company to develop its own assumptions. Upon completing our fair value estimate of the derivative liabilities, the Company determined that the fair value exceeded the cash proceeds received and recorded a loss upon issuance. This loss was recorded within the “Change in fair value of derivative liabilities and loss on debt extinguishment” in our Consolidated Statements of Operations and the derivative liabilities are classified as short-term in the Consolidated Balance Sheet as of December 31, 2018, due to their maturity in April 2019. Upon exercise of the conversion option, the derivative liabilities and related debt host were accounted for as an extinguishment whereby a gain or loss was recognized in an amount equal to the difference between the recorded value of the liabilities and the fair value of the consideration issued to extinguish them. |
Residential Leases | Residential Leases To determine lease classification, the Company evaluates lease terms to determine whether there is a transfer of ownership or bargain purchase option at the end of the lease, whether the lease term is greater than 75% of the useful life, or whether the present value of minimum lease payments exceed 90% of the fair value at lease inception. The Company’s leased systems are treated as sales-type leases under GAAP accounting policies due to the present value of their minimum lease payments exceeding 90% of the fair value at lease inception. Financing receivables are generated by solar energy systems leased to residential customers under sales-type leases. Financing receivables represents gross minimum lease payments to be received from customers over a period commensurate with the remaining lease term of up to 20 years and the systems estimated residual value, net of allowance for estimated losses. Initial direct costs for sales-type leases are recognized as cost of sales when the solar energy systems are placed in service. For systems classified as sales-type leases, the net present value of the minimum lease payments, net of executory costs, is recognized as revenue when the lease is placed in service. This net present value as well as the net present value of the residual value of the lease at termination are recorded as other assets in the Consolidated Balance Sheet. The difference between the initial net amounts and the gross amounts are amortized to revenue over the lease term using the interest method. The residual values of the Company’s solar energy systems are determined at the inception of the lease applying an estimated system fair value at the end of the lease term. RGS considers the credit risk profile for its lease customers to be homogeneous due to the criteria the Company uses to approve customers for its residential leasing program, which among other things, requires a minimum “fair” FICO credit quality. Accordingly, the Company does not regularly categorize its financing receivables by credit risk. |
Recently Issued Accounting Standards | Recently Issued Accounting Standards ASU 2018-20, ASU 2018-11, ASU 2018-01 and ASU 2016-02 In February 2016, the FASB established Topic 842, Leases, by issuing Accounting Standards Update (ASU) No. 2016-02, which requires lessees to recognize leases on-balance sheet and disclose key information about leasing arrangements. Topic 842 was subsequently amended by ASU No. 2018-01, Land Easement Practical Expedient for Transition to Topic 842; ASU No. 2018-10, Codification Improvements to Topic 842, Leases; and ASU No. 2018-11, Targeted Improvements. The new standard establishes a right-of-use model (ROU) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. The new standard is effective for the Company on January 1, 2019. A modified retrospective transition approach is required, applying the new standard to all leases existing at the date of initial application. An entity may choose to use either (1) its effective date or (2) the beginning of the earliest comparative period presented in the financial statements as its date of initial application. The Company has adopted the new standard on January 1, 2019 and used the effective date as its date of initial application. Consequently, financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019. The new standard provides a number of optional practical expedients in transition. The Company has elected the ‘package of practical expedients’. The Company expects that this standard will have a material effect on our financial statements for contracts in which the Company is the lessee. While the Company continues to assess all of the effects of adoption, the Company currently believe the most significant effects relate to (1) the recognition of new ROU assets and lease liabilities on our balance sheet for our real estate and vehicle operating leases and (2) providing significant new disclosures about our leasing activities. The Company has made an accounting policy election to exclude immaterial leases from lease accounting and will continue to expense them as incurred similar to our capitalization policy. The new standard also provides practical expedients for an entity’s ongoing accounting. The Company has elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, the Company will not recognize ROU assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases of those assets in transition. The Company has also elected the practical expedient to not separate lease and non-lease components for all of our leases. The accounting standards noted above also requires lessors to classify leases as sales-type, direct financing or operating leases. The Company currently holds leases of solar systems where it is the lessor. While the Company continues to evaluate certain aspects of the new standard, it does not expect the new standard to have a material effect on its financial statements for contracts where the Company is the lessor and it does not expect a significant change in our sales-type leasing activities between now and adoption. The Company believes substantially all of its leases will continue to be classified as sales-type leases under the new standard. While the new standard identifies maintenance as a non-lease component of equipment lease contracts, the Company will account for solar system leases and associated maintenance service components as a single, combined lease component. Consequently, the Company does not expect the new standard’s changed guidance on contract components to significantly affect its financial reporting. ASU 2017-11 On July 13, 2017, the FASB issued Accounting Standards Update No. 2017-11 (“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 Noncontrolling Interests with a Scope Exception. Recently Adopted Accounting Standards ASU 2017-04 On January 26, 2017, the FASB issued Accounting Standards Update No. 2017-04 (“ASU 2017-04”), Intangibles – Goodwill and Other (Topic 350): Simplifying the Accounting for Goodwill Impairment ASU 2014-09 On May 28, 2014, the FASB issued Accounting Standards Update No. 2014-09 (“ASU 2014-09”), which created Topic 606, Revenue from Contracts with Customers |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of computation of basic and diluted net income (loss) per share | For the Years Ended December 31, (In thousands, except per share data) 2018 2017 Numerator for basic and diluted net loss per share $ (42,084 ) $ (17,700 ) Denominator: Weighted average shares for basic net loss per share 35,618 6,950 Effect of dilutive securities: Weighted average of common stock, stock options and warrants - - Denominators for diluted net loss per share 35,618 6,950 Net loss per share—basic and diluted $ (1.18 ) $ (2.55 ) |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Schedule of disaggregated by primary geographical market and reconciliation of disaggregated revenue with the reportable segments | Reportable Segments December 31, 2018 (in thousands) Primary Geographical Regions Solar Division POWERHOUSE™ Total reportable segments All other segments Total East $ 10,022 $ - $ 10,022 $ - $ 10,022 West 2,681 - 2,681 25 2,706 $ 12,703 $ - $ 12,703 $ 25 $ 12,728 Reportable Segments December 31, 2017 (in thousands) Primary Geographical Regions Solar Division POWERHOUSE™ Total reportable segments All other segments Total East $ 12,324 $ - $ 12,324 $ - $ 12,324 West 3,262 - 3,262 6 3,268 $ 15,586 $ - $ 15,586 $ 6 $ 15,592 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment stated at lower of cost or estimated fair value | (in thousands) 2018 2017 Buildings and leasehold improvements $ 441 $ 441 Furniture, fixtures and equipment 1,832 1,811 Software 2,135 2,135 Vehicles and machinery 1,142 1,167 Total property and equipment 5,550 5,554 Accumulated depreciation and amortization (4,772 ) (4,400 ) Total property and equipment, net $ 778 $ 1,154 |
Schedule of estimated useful lives of property, plant and equipment | Useful lives Buildings 40 years Leasehold improvements 3-5 years Furniture, fixtures and equipment 3-5 years Software 3-15 years Vehicles and machinery 2-7 years |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accounts Payable and Accrued Liabilities [Abstract] | |
Schedule of components of accrued expenses | (in thousands) 2018 2017 Accrued Expenses $ 924 $ 524 Accrued Compensation 476 690 Other 69 130 Accrued Project Costs 102 130 Total $ 1,571 $ 1,474 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of future minimum lease payments | Future Minimum (in thousands) Lease Payments 2019 $ 848 2020 505 2021 378 2022 112 2023 and thereafter - Total minimum lease payments $ 1,843 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Equity [Abstract] | |
Schedule of shares of Class A common stock reserved for future issuance | Stock options and grants outstanding under incentive plans 1,206,645 Common stock warrants outstanding 8,714,871 2018 Notes outstanding - derivative liability 1,726,423 Total shares reserved for future issuance 11,647,939 |
Schedule of warrant activity | Issuances Warrants outstanding at December 31, 2016 682,693 Issuances 8,178,580 Exercised (3,007,412 ) Warrants outstanding at December 31, 2017 5,853,861 Issuances 12,385,143 Expired (42,465 ) Exercised (9,481,668 ) Warrants outstanding at December 31, 2018 8,714,871 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of fair values of derivative instruments included in our consolidated balance sheets | Fair Value of Derivative Instruments Liability Derivatives 2018 2017 Balance at December 31, 2018 Balance Sheet Fair Value Balance Sheet Fair Value Derivatives not designated as hedging instruments Deriviative liability Convertible debt, net $ 344 N/a $ - The Effect of Derivative Instrument on the Statement of Operations for the Nine Months Ended December 31, 2018 and 2017 Amount of Loss Recognized Derivatives not designated as Location of Loss Recognized in 2018 2017 2018 Notes Conversion Options Change in fair value of derivative liabilities and loss on debt extinguishment $ (27,134 ) $ - Amortization of debt discount & deferred loan costs (1,042 ) - $ (28,176 ) $ - |
Schedule of fair value of assets and liabilities measured on recurring basis | Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Items Inputs Inputs Balance at December 31, 2018 (in thousands) Total (Level 1) (Level 2) (Level 3) Common stock warrant liability $ 511 - - $ 511 Derivative liability 344 - - 344 $ 855 - - $ 855 |
Schedule of reconciliation of common stock warrant liability measured at fair value on recurring basis | Embedded Common Stock derivative (in thousands) warrant liability liability Total Fair value of financial liabilities at December 31, 2017 $ 76 $ - $ 76 Common stock warrant liability 6,818 - 6,818 Expiration of common stock warrant liabilities (48 ) - (48 ) Change in the fair value of common stock warrant liabilities, net (1,940 ) - (1,940 ) Adjustment for exercise of common stock warrant liabilities (4,395 ) - (4,395 ) Derivative liability - 3,195 3,195 Investor Notes (109 ) (109 ) Change in the fair value of derivative liabilities and additional amounts earned - 17,910 17,910 Conversions of 2018 Notes - (20,652 ) (20,652 ) Fair value of financial liabilities at December 31, 2018 $ 511 $ 344 $ 855 |
2018 Options | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of assumptions used for fair value measurements | 2018 Non-Qualified Stock Options Grant Date Vesting Expected Expected Risk-free Market June 21, 2018 2.78 years 4.2 years 0 % 2.70 % 148.77 % September 4, 2018 2.82 years 5.7 years 0 % 2.78 % 147.40 % September 10, 2018 2.81 years 5.7 years 0 % 2.83 % 146.66 % October 15, 2018 2.96 years 4.3 years 0 % 2.96 % 149.82 % October 29, 2018 2.92 years 4.3 years 0 % 2.87 % 150.34 % |
Common stock warrant liability | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of assumptions used for fair value measurements | Exercise Strike Floor Closing Risk-free Dividend Market Remaining Warrant Liability April 09, 2018 $ 1.12 $ 0.97 $ 0.85 2.60 % 0.00 % 120 % 5.00 Warrant Liability June 30, 2018 $ 0.55 $ 0.19 $ 0.57 2.72 % 0.00 % 115 % 4.78 Warrant Liability September 30, 2018 $ 0.32 $ 0.19 $ 0.39 2.93 % 0.00 % 115 % 4.53 Warrant Liability December 31, 2018 $ 0.32 N/a $ 0.52 2.49 % 0.00 % 120 % 4.28 |
2018 Notes | Derivative liability | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Schedule of assumptions used for fair value measurements | Conversion Closing Market Risk-free Dividend Market Remaining Debt Soft Call First Second Derivative Liability April 09, 2018 $ 1.26 $ 0.85 2.08 % 0.00 % 110 % 1.00 60 % $ 2.52 20 % 25 % Derivative Liability June 30, 2018 $ 0.55 $ 0.57 2.23 % 0.00 % 130 % 0.78 60 % $ 2.52 20 % 25 % Derivative Liability September 30, 2018 $ 0.31 $ 0.39 2.36 % 0.00 % 125 % 0.53 60 % $ 2.52 20 % 25 % Derivative Liability December 31, 2018 $ 0.31 $ 0.52 2.45 % 0.00 % 90 % 0.28 60 % $ 2.52 20 % 25 % |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of summary of our option activity | Weighted- Average Weighted- Remaining Average Contractual Aggregate Exercise Term Intrinsic Shares Price (Yrs) Value Outstanding at January 1, 2017 185 $ 15,736.67 3.30 $ - Granted - - Exercised - - Forfeited or expired (36 ) 4,990.00 Outstanding at December 31, 2017 149 $ 18,452.38 2.60 $ - Exercisable at December 31, 2017 141 $ 19,418.30 2.80 $ - Granted 1,331,500 0.96 Exercised - - Forfeited or expired (125,004 ) 1.13 Outstanding at December 31, 2018 1,206,645 $ 3.22 6.58 $ - Exercisable at December 31, 2018 268,189 $ 11.26 6.53 $ - |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of variations from the federal statutory rate | Years ended December 31, (in thousands) 2018 2017 Expected federal income tax expense (benefit) at statutory rate of 21% and 35% at December 31, 2018 and 2017, respectively $ (8,888 ) $ (6,191 ) Effect of permanent other differences Debt extinguishment 5,145 170 Transaction Cost Amortization 552 - Other 319 (28 ) Effect of valuation allowance 3,479 (12,572 ) Other 39 (1,147 ) Impact of change in federal tax rate on deferred tax asset - 20,479 State income tax expense (benefit), net of federal benefit (646 ) (690 ) $ - $ 21 |
Schedule of temporary differences between the carrying amounts of assets and liabilities | (in thousands) 2018 2017 Deferred tax assets (liabilities) Provision for doubtful accounts $ 138 $ 195 Inventory-related expense 195 209 Accrued liabilities 367 444 Depreciation and amortization 2,084 2,128 Net operating loss carry-forwards 39,154 35,754 Other 705 719 Total deferred tax assets 42,643 39,449 Valuation allowance (42,643 ) (39,449 ) Total net deferred tax assets $ - $ - |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Segment Reporting [Abstract] | |
Schedule of reconciliation of reportable segments' income (loss) from operations | (in thousands) 2018 2017 Contract revenue: Solar Division 12,703 15,586 POWERHOUSE™ - - Other 25 6 Consolidated contract revenue 12,728 15,592 Operating loss from continuing operations: Solar Division (5,855 ) (8,729 ) POWERHOUSE™ (598 ) (20 ) Other (8,518 ) (8,637 ) Operating Loss (14,971 ) (17,386 ) Reconciliation of consolidated loss from operations to consolidated net loss: Other income 1,063 68 Change in fair value of derivative liabilities and loss on debt extinguishment (27,134 ) (379 ) Amortization of debt discount and deferred loan costs (1,042 ) (3 ) Net loss (42,084 ) (17,700 ) |
Schedule of reconciliation of reportable segments' assets to the company's consolidated total assets | (in thousands) 2018 2017 Total assets: Solar Division $ 10,615 $ 9,840 POWERHOUSE™ 1,366 1,140 Other 4,279 3,278 $ 16,260 $ 14,258 |
Principles of Consolidation, _2
Principles of Consolidation, Organization and Nature of Operations (Detail Textuals) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018USD ($)Megawatt | Dec. 31, 2017USD ($) | Dec. 31, 2016USD ($) | |
Principles Of Consolidation, Organization And Nature Of Operations [Line Items] | |||
Cash | $ 5,831 | $ 1,170 | $ 2,940 |
Debt | 336 | 1 | |
Shareholders' equity | $ 10,782 | 6,166 | $ 4,978 |
Term of estimated liquidity | 12 months | ||
Powerhouse License Agreement | |||
Principles Of Consolidation, Organization And Nature Of Operations [Line Items] | |||
Sell minimum quantity of solar within 5 - years | Megawatt | 50 | ||
Payment for license fee | $ 3,000 | ||
Cash | 5,800 | ||
Working capital | 6,900 | ||
Debt | 500 | ||
Shareholders' equity | 10,800 | ||
License fee | $ 2,000 | $ 1,000 |
Principles of Consolidation, _3
Principles of Consolidation, Organization and Nature of Operations (Detail Textuals 1) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Amortization of debt discount and deferred loan costs | $ (1,042) | $ (3) | |||
Calculation of the debt discount and loss upon issuance | Restatement | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||
Debt issue costs | $ 600 | 600 | |||
Change in fair value of derivative liabilities | 500 | 500 | |||
Loss on debt extinguishment | $ (700) | ||||
Amortization of debt discount and deferred loan costs | $ 700 | $ 800 | |||
Net impact on financial statements | $ 900 | ||||
Immaterial error correction | During the preparation of the 2018 consolidated financial statements, the Company identified an error in the accounting for the 2018 Note Offering (Note 9. Convertible Debt). The Company incorrectly included debt issue costs of $0.6 million in the calculation of the debt discount and loss upon issuance, which resulted in amortization of debt discount being overstated and the loss on debt extinguishment to be understated. As a result, "change in fair value of derivative liabilities and loss on debt extinguishment" was understated by $0.5 million and $0.7 million and "amortization of debt discount and deferred loan costs" was overstated by $0.8 million and $0.7 million for the quarters ended June 30, 2018, and September 30, 2018, respectively. The Company evaluated the impact of the error on its previously issued financial statements and concluded that the impact was not material. The error was corrected in the fourth quarter of 2018 and resulted in a net impact of $0.09 million. |
Significant Accounting Polici_4
Significant Accounting Policies - Computation of basic and diluted net income (loss) per share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Numerator for basic and diluted net loss per share | $ (42,084) | $ (17,700) |
Denominator: | ||
Weighted average shares for basic net loss per share | 35,618 | 6,950 |
Effect of dilutive securities: | ||
Weighted average of common stock, stock options and warrants | 0 | 0 |
Denominators for diluted net loss per share | 35,618 | 6,950 |
Basic and Diluted (in dollars per share) | $ (1.18) | $ (2.55) |
Significant Accounting Polici_5
Significant Accounting Policies (Detail Textuals) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)Segmentsshares | Dec. 31, 2017USD ($)shares | |
Significant Accounting Policies [Line Items] | ||
Carrying cost of intangible asset | $ 3,202 | $ 1,114 |
Amortization of POWERHOUSE License | 33 | |
Allowance for doubtful accounts | 500 | 800 |
Reserve for obsolete or slow moving inventory | $ 700 | $ 600 |
Estimated useful lives of property and equipment | three to twenty years | |
Weighted average common share equivalents excluded from earnings per share | shares | 10,445,294 | 5,857,861 |
Number of reporting segments | Segments | 3 | |
Lease term percentage upon useful life | 75.00% | |
Present value of minimum lease payments | 90.00% | |
Maximum remaining lease term of sales type lease | 20 years | |
EPC solar energy systems | ||
Significant Accounting Policies [Line Items] | ||
Product warranty period of warranties products | 10 years | |
Limited performance warranty period of warrants solar energy systems | 25 years | |
POWERHOUSE solar shingle | ||
Significant Accounting Policies [Line Items] | ||
Product warranty period of warranties products | 11 years | |
Power production warranty term | 24 years | |
Carrying cost of intangible asset | $ 3,202 | |
Amortization of POWERHOUSE License | 30 | |
Expected amortization expense for five years each | $ 200 |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 12,728 | $ 15,592 |
East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,022 | 12,324 |
West | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,706 | 3,268 |
Solar Division | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12,703 | 15,586 |
POWERHOUSE | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
All other segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25 | 6 |
All other segments | East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
All other segments | West | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25 | 6 |
Total reportable segments | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12,703 | 15,586 |
Total reportable segments | East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,022 | 12,324 |
Total reportable segments | West | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,681 | 3,262 |
Total reportable segments | Solar Division | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 12,703 | 15,586 |
Total reportable segments | Solar Division | East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 10,022 | 12,324 |
Total reportable segments | Solar Division | West | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,681 | 3,262 |
Total reportable segments | POWERHOUSE | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Total reportable segments | POWERHOUSE | East | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 0 | 0 |
Total reportable segments | POWERHOUSE | West | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 0 | $ 0 |
Revenue (Detail Textuals)
Revenue (Detail Textuals) | 12 Months Ended |
Dec. 31, 2018Contract | |
Revenue Recognition and Deferred Revenue [Abstract] | |
Number of performance obligation included in each project of PV solar systems started | 1 |
Number of contract satisfied the requirement of PV solar system control transferring over time | 2 |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 5,550 | $ 5,554 |
Accumulated depreciation and amortization | (4,772) | (4,400) |
Total property and equipment, net | 778 | 1,154 |
Buildings and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 441 | 441 |
Furniture, fixtures and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 1,832 | 1,811 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | 2,135 | 2,135 |
Vehicles and machinery | ||
Property, Plant and Equipment [Line Items] | ||
Total property and equipment | $ 1,142 | $ 1,167 |
Property and Equipment (Detai_2
Property and Equipment (Details 1) | 12 Months Ended |
Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | three to twenty years |
Buildings | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 40 years |
Leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3-5 years |
Furniture, fixtures and equipment | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3-5 years |
Software | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 3-15 years |
Vehicles and machinery | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives of property and equipment | 2-7 years |
Property and Equipment (Detail
Property and Equipment (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 401 | $ 415 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Payable and Accrued Liabilities [Abstract] | ||
Accrued Expenses | $ 924 | $ 524 |
Accrued Compensation | 476 | 690 |
Other | 69 | 130 |
Accrued Project Costs | 102 | 130 |
Total | $ 1,571 | $ 1,474 |
Related Parties (Detail Textual
Related Parties (Detail Textuals) - Mobomo, LLC ("Mobomo") - Intellectual property | 1 Months Ended |
May 23, 2017USD ($) | |
Related Party Transaction [Line Items] | |
Intellectual property cost | $ 500,000 |
Hosting services | $ 20,000 |
Commitments and Contingencies -
Commitments and Contingencies - Remaining future minimum payments of all leases (Details) $ in Thousands | Dec. 31, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 848 |
2020 | 505 |
2021 | 378 |
2022 | 112 |
2023 and thereafter | 0 |
Total minimum lease payments | $ 1,843 |
Commitments and Contingencies_2
Commitments and Contingencies (Detail Textuals) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Line Items] | ||
Operating lease termination date | May 2022 | |
Office and warehouse rent expense | $ 0.6 | $ 0.7 |
Automobile lease expense | $ 0.3 | $ 0.4 |
Minimum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Operating leases, renewal options | 1 month | |
Maximum | ||
Commitments and Contingencies Disclosure [Line Items] | ||
Operating leases, renewal options | 5 years | |
Operating lease, lease term | 5 years |
Shareholders' Equity (Details)
Shareholders' Equity (Details) | Dec. 31, 2018shares |
Schedule Of Stockholders' Equity [Line Items] | |
Total shares reserved for future issuance | 11,647,939 |
Derivative liability | 2018 Notes outstanding | |
Schedule Of Stockholders' Equity [Line Items] | |
Total shares reserved for future issuance | 1,726,423 |
Common stock warrants outstanding | |
Schedule Of Stockholders' Equity [Line Items] | |
Total shares reserved for future issuance | 8,714,871 |
Stock options and grants outstanding under incentive plans | |
Schedule Of Stockholders' Equity [Line Items] | |
Total shares reserved for future issuance | 1,206,645 |
Shareholders' Equity (Details 1
Shareholders' Equity (Details 1) - shares | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Warrant Outstanding Activity [Roll Forward] | ||
Warrants outstanding, Beginning Balance | 5,853,861 | 682,693 |
Issuances | 12,385,143 | 8,178,580 |
Expired | (42,465) | |
Exercised | (9,481,668) | (3,007,412) |
Warrants outstanding, Ending Balance | 8,714,871 | 5,853,861 |
Shareholders' Equity (Detail Te
Shareholders' Equity (Detail Textuals) - USD ($) | Jan. 04, 2018 | Jan. 01, 2018 | Feb. 09, 2017 | Feb. 06, 2017 | Mar. 30, 2018 | Mar. 30, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Shareholders Equity [Line Items] | ||||||||
Proceeds from issuance of common stock | $ 920,000 | $ 16,187,000 | ||||||
Common stock shares reserved | 11,647,939 | |||||||
Proceeds from convertible debt | $ 5,000,000 | |||||||
6 February, 2017 Offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Net proceeds from offering | $ 10,500,000 | |||||||
6 February, 2017 Offering | February 6 Primary Units | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of units issued | 2,096,920 | |||||||
Purchase price of units per share (in dollars per share) | $ 3.10 | |||||||
6 February, 2017 Offering | February 6 Alternative Units | ||||||||
Shareholders Equity [Line Items] | ||||||||
Purchase price of units per share (in dollars per share) | $ 3.09 | |||||||
9 February, 2017 Offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Net proceeds from offering | $ 5,500,000 | |||||||
Number of units issued | 1,650,000 | |||||||
9 February, 2017 Offering | February 9 Primary Units | ||||||||
Shareholders Equity [Line Items] | ||||||||
Exercise Price (in dollars per share) | $ 2.50 | |||||||
Number of units issued | 1,650,000 | |||||||
9 February, 2017 Offering | February 9 Alternative Units | ||||||||
Shareholders Equity [Line Items] | ||||||||
Exercise Price (in dollars per share) | $ 2.49 | |||||||
Number of units issued | 750,000 | |||||||
January 4 , 2018 Offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Net proceeds from offering | $ 1,800,000 | |||||||
March 30 , 2018 offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of Class A common stock issue and sold | 73,000,000 | |||||||
Amount of gross proceeds | $ 8,700,000 | |||||||
March 30 , 2018 offering | Unaffiliated institutional investors | ||||||||
Shareholders Equity [Line Items] | ||||||||
Principal amount of notes issued | $ 10,750,000 | $ 10,750,000 | ||||||
March 30 , 2018 offering | Unaffiliated institutional investors | Cooperation Agreement | ||||||||
Shareholders Equity [Line Items] | ||||||||
Proceeds from original issue discount ("OID") | 750,000 | |||||||
Proceeds from convertible debt | $ 10,000,000 | |||||||
Private Placement | Unaffiliated institutional investors | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of Class A common stock issue and sold | 800,000 | |||||||
Series K Warrant | 6 February, 2017 Offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of shares called by warrants | 3,710,000 | |||||||
Series P Warrant | Unaffiliated institutional investors | Cooperation Agreement | ||||||||
Shareholders Equity [Line Items] | ||||||||
Common stock per share | $ 1.15 | |||||||
Amount of net proceeds | $ 1,500,000 | |||||||
Series Q Warrant | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of common stock issued | 81,507,793 | |||||||
Class A common stock | 6 February, 2017 Offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of common stock issued | 2,096,920 | |||||||
Value of common stock issued | $ 11,500,000 | |||||||
Number of shares called by warrants | 3,710,000 | |||||||
Class A common stock | 6 February, 2017 Offering | February 6 Alternative Units | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of units issued | 1,613,080 | |||||||
Class A common stock | 9 February, 2017 Offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Proceeds from issuance of common stock | $ 6,000,000 | |||||||
Percentage of warrants to purchase common stock | 75.00% | |||||||
Class A common stock | Series K Warrant | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of shares called by warrants | 3,710,000 | |||||||
Class A common stock | Series N Warrant | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of shares called by warrants | 750,000 | |||||||
Class A common stock | Series M Warrant | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of shares called by warrants | 1,800,000 | |||||||
Class A common stock | Series P Warrant | Private Placement | Unaffiliated institutional investors | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of shares called by warrants | 800,000 | |||||||
Class A common stock | Series O Warrant | Private Placement | Unaffiliated institutional investors | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of common stock issued | 1,600,000 | |||||||
Number of Class A common stock issue and sold | 800,000 | |||||||
Class A common stock | Series Q Warrant | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of shares called by warrants | 9,270,457 | 9,270,457 | ||||||
Class A common stock | Series Q Warrant | March 30 , 2018 offering | ||||||||
Shareholders Equity [Line Items] | ||||||||
Number of Class A common stock issue and sold | 8,700,000 |
Convertible Debt (Detail Textua
Convertible Debt (Detail Textuals) $ / shares in Units, $ in Thousands | Apr. 09, 2018USD ($) | Mar. 30, 2018USD ($)Investorshares | Dec. 31, 2018USD ($)$ / shares | Aug. 27, 2018$ / shares | Jun. 21, 2018$ / shares |
Debt Instrument [Line Items] | |||||
Number of unaffiliated institutional investors | Investor | 2 | ||||
Proceeds from convertible debt | $ 5,000 | ||||
Stock conversion price | $ / shares | $ 1.2405 | ||||
Debt interest rate percentage | 18.00% | ||||
Percentage of amount to be redeemed | 125.00% | ||||
Percentage of shares issuable | 75.00% | ||||
Beneficially Own Percentage | excess of 4.99 or 9.99% | ||||
Class A common stock | |||||
Debt Instrument [Line Items] | |||||
Stock conversion price | $ / shares | $ 0.3067 | $ 0.3223 | |||
Series Q Warrants | |||||
Debt Instrument [Line Items] | |||||
Exercise price of warrants | $ / shares | $ 0.3223 | ||||
Senior Secured Convertible Notes | Series Q Warrants | Class A common stock | |||||
Debt Instrument [Line Items] | |||||
Number of shares called by warrants | shares | 9,126,984 | ||||
Private Placement | |||||
Debt Instrument [Line Items] | |||||
Available cash requirement on quarterly basis | $ 750 | ||||
Unaffiliated institutional investors | Private Placement | Senior Secured Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Principal amount of notes issued | $ 10,750 | ||||
Proceeds from convertible debt | 10,000 | ||||
Proceeds from original issue discount ("OID") | $ 750 | ||||
Proceeds from sale of notes at closing of offering | $ 5,000 | ||||
Proceeds from promissory notes secured by cash and securities held in escrow | $ 5,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | $ 344 | |
Derivatives not designated as hedging instruments, Deriviative liability | ||
Derivatives, Fair Value [Line Items] | ||
Liability Derivatives, Fair Value | $ 344 | $ 0 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details 1) - Derivatives not designated as hedging instruments 2018 Notes Conversion Options - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in Statement of Operations | $ (28,176) | $ 0 |
Change in fair value of derivative liabilities and loss on debt extinguishment | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in Statement of Operations | (27,134) | 0 |
Amortization of debt discount & deferred loan costs | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Amount of Loss Recognized in Statement of Operations | $ (1,042) | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value of Assets and Liabilities Measured on Recurring Basis (Details 2) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | $ 511 | $ 76 |
Recurring basis | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 855 | |
Recurring basis | Common stock warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 511 | |
Recurring basis | Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 344 | |
Recurring basis | Quoted Prices in Active Markets for Identical Items (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Items (Level 1) | Common stock warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 0 | |
Recurring basis | Quoted Prices in Active Markets for Identical Items (Level 1) | Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Common stock warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 0 | |
Recurring basis | Significant Other Observable Inputs (Level 2) | Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 0 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 855 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | Common stock warrant liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | 344 | |
Recurring basis | Significant Unobservable Inputs (Level 3) | Derivative liability | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Financial assets and liabilities at fair value | $ 511 |
Fair Value Measurements - Recon
Fair Value Measurements - Reconciliation of Common Stock Warrant Liability Measured at Fair Value on Recurring Basis (Details 3) - Recurring basis - Significant Unobservable Inputs (Level 3) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value of financial liabilities at December 31, 2017 | $ 76 |
Common stock warrant liability | 6,818 |
Expiration of common stock warrant liabilities | (48) |
Change in the fair value of common stock warrant liabilities, net | (1,940) |
Adjustment for exercise of common stock warrant liabilities | (4,395) |
Derivative liability | 3,195 |
Investor Notes | (109) |
Change in the fair value of derivative liabilities and additional amounts earned | 17,910 |
Conversions of 2018 Notes | (20,652) |
Fair value of financial liabilities at December 31, 2018 | 855 |
Common Stock warrant liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value of financial liabilities at December 31, 2017 | 76 |
Common stock warrant liability | 6,818 |
Expiration of common stock warrant liabilities | (48) |
Change in the fair value of common stock warrant liabilities, net | (1,940) |
Adjustment for exercise of common stock warrant liabilities | (4,395) |
Derivative liability | 0 |
Change in the fair value of derivative liabilities and additional amounts earned | 0 |
Conversions of 2018 Notes | 0 |
Fair value of financial liabilities at December 31, 2018 | 511 |
Embedded derivative liability | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Fair value of financial liabilities at December 31, 2017 | 0 |
Common stock warrant liability | 0 |
Expiration of common stock warrant liabilities | 0 |
Change in the fair value of common stock warrant liabilities, net | 0 |
Adjustment for exercise of common stock warrant liabilities | 0 |
Derivative liability | 3,195 |
Investor Notes | (109) |
Change in the fair value of derivative liabilities and additional amounts earned | 17,910 |
Conversions of 2018 Notes | (20,652) |
Fair value of financial liabilities at December 31, 2018 | $ 344 |
Fair Value Measurements (Deta_3
Fair Value Measurements (Details 4) - Derivative liability | Apr. 09, 2018USD_per_share | Jun. 30, 2018USD_per_share | Sep. 30, 2018USD_per_share | Dec. 31, 2018USD_per_share |
Fair Value Disclosures [Line Items] | ||||
Remaining Term (years) | 1 year | 9 months 11 days | 6 months 11 days | 3 months 11 days |
Conversion Price | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 1.26 | 0.55 | 0.31 | 0.31 |
Closing Market Price | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 0.85 | 0.57 | 0.39 | 0.52 |
Risk-free Rate | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 2.08 | 2.23 | 2.36 | 2.45 |
Dividend Yield | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | 0 | 0 | 0 |
Market Price Volatility | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 110 | 130 | 125 | 90 |
Debt Yield | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 60 | 60 | 60 | 60 |
Soft Call Threshold | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 2.52 | 2.52 | 2.52 | 2.52 |
First Redemption Period | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 20 | 20 | 20 | 20 |
Second Redemption Period | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 25 | 25 | 25 | 25 |
Warrant | ||||
Fair Value Disclosures [Line Items] | ||||
Remaining Term (years) | 5 years | 4 years 9 months 11 days | 4 years 6 months 11 days | 4 years 3 months 11 days |
Warrant | Exercise Price | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 1.12 | 0.55 | 0.32 | 0.32 |
Warrant | Strike Floor | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 0.97 | 0.19 | 0.19 | |
Warrant | Closing Market Price | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 0.85 | 0.57 | 0.39 | 0.52 |
Warrant | Risk-free Rate | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 2.60 | 2.72 | 2.93 | 2.49 |
Warrant | Dividend Yield | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | 0 | 0 | 0 |
Warrant | Market Price Volatility | ||||
Fair Value Disclosures [Line Items] | ||||
Derivative Liability, Measurement Input | 120 | 115 | 115 | 120 |
Fair Value Measurements (Deta_4
Fair Value Measurements (Details 5) - 2018 Non-Qualified Stock Options | 12 Months Ended |
Dec. 31, 2018 | |
June 21, 2018 | |
Fair Value Disclosures [Line Items] | |
Vesting Period | 2 years 9 months 11 days |
Expected Life | 4 years 2 months 12 days |
Expected Dividend Rate | 0.00% |
Risk-free Rate | 2.70% |
Market Price Volatility | 148.77% |
September 4, 2018 | |
Fair Value Disclosures [Line Items] | |
Vesting Period | 2 years 9 months 26 days |
Expected Life | 5 years 8 months 12 days |
Expected Dividend Rate | 0.00% |
Risk-free Rate | 2.78% |
Market Price Volatility | 147.40% |
September 10, 2018 | |
Fair Value Disclosures [Line Items] | |
Vesting Period | 2 years 9 months 22 days |
Expected Life | 5 years 8 months 12 days |
Expected Dividend Rate | 0.00% |
Risk-free Rate | 2.83% |
Market Price Volatility | 146.66% |
October 15, 2018 | |
Fair Value Disclosures [Line Items] | |
Vesting Period | 2 years 11 months 16 days |
Expected Life | 4 years 3 months 18 days |
Expected Dividend Rate | 0.00% |
Risk-free Rate | 2.96% |
Market Price Volatility | 149.82% |
October 29, 2018 | |
Fair Value Disclosures [Line Items] | |
Vesting Period | 2 years 11 months 1 day |
Expected Life | 4 years 3 months 18 days |
Expected Dividend Rate | 0.00% |
Risk-free Rate | 2.87% |
Market Price Volatility | 150.34% |
Fair Value Measurements (Deta_5
Fair Value Measurements (Detail Textuals) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Fair Value Disclosures [Abstract] | |
Goodwill impairment | $ 1,338 |
Share-Based Compensation - Summ
Share-Based Compensation - Summary of Options Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Shares | |||
Outstanding at January 1 | 149 | 185 | |
Granted | 1,331,500 | 0 | |
Exercised | 0 | 0 | |
Forfeited or expired | (125,004) | (36) | |
Outstanding at December 31 | 1,206,645 | 149 | 185 |
Number of Shares Exercisable, Ending Balance | 268,189 | 141 | |
Weighted Average Exercise Price | |||
Outstanding at January 1 | $ 18,452.38 | $ 15,736.67 | |
Granted | 0.96 | 0 | |
Exercised | 0 | 0 | |
Forfeited or expired | 1.13 | 4,990 | |
Outstanding at December 31 | 3.22 | 18,452.38 | $ 15,736.67 |
Exercisable at December 31 | $ 11.26 | $ 19,418.30 | |
Weighted Average Remaining Contractual Term (Yrs) | |||
Outstanding as of end of year | 6 years 6 months 29 days | 2 years 7 months 6 days | 3 years 3 months 18 days |
Exercisable as of end of year | 6 years 6 months 11 days | 2 years 9 months 18 days | |
Aggregate Intrinsic Value | |||
Outstanding | $ 0 | $ 0 | $ 0 |
Exercisable | $ 0 | $ 0 |
Share-Based Compensation (Detai
Share-Based Compensation (Detail Textuals) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Jun. 21, 2018 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized to be granted | 1,331,500 | ||
Option valuation method used | Black-Scholes option-pricing model | ||
Share-based compensation expense | $ 263 | $ 249 | |
Stock options cancelled | 125,004 | 36 | |
Real Goods Solar 2018 Long-Term Incentive Plan ("2018 Incentive Plan") | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized to be granted | 1,300,000 | ||
Number of shares granted expired | 10 years | ||
Option valuation method used | Fair-value-based method | ||
Contractual term | 7 years | ||
Option vesting percentage | 8.30% | ||
Real Goods Solar 2018 Long-Term Incentive Plan ("2018 Incentive Plan") | Class A common stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares authorized to be granted | 52,536 | ||
Number of shares granted expired | 7 years |
Goodwill Impairment (Detail Tex
Goodwill Impairment (Detail Textuals) $ in Thousands | 12 Months Ended |
Dec. 31, 2018USD ($) | |
Goodwill and Intangible Asset Impairment [Abstract] | |
Goodwill impairment for the Solar Division segment | $ 1,338 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Expected federal income tax expense (benefit) at statutory rate of 21% and 35% at December 31, 2018 and 2017, respectively | $ (8,888) | $ (6,191) |
Effect of permanent other differences | ||
Debt extinguishment | 5,145 | 170 |
Transaction Cost Amortization | 552 | 0 |
Other | 319 | (28) |
Effect of valuation allowance | 3,479 | (12,572) |
Other | 39 | (1,147) |
Impact of change in federal tax rate on deferred tax asset | 0 | 20,479 |
State income tax expense (benefit), net of federal benefit | (646) | (690) |
Total | $ 0 | $ 21 |
Income Taxes (Details 1)
Income Taxes (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred tax assets (liabilities) | ||
Provision for doubtful accounts | $ 138 | $ 195 |
Inventory-related expense | 195 | 209 |
Accrued liabilities | 367 | 444 |
Depreciation and amortization | 2,084 | 2,128 |
Net operating loss carry-forwards | 39,154 | 35,754 |
Other | 705 | 719 |
Total deferred tax assets | 42,643 | 39,449 |
Valuation allowance | (42,643) | (39,449) |
Total net deferred tax assets | $ 0 | $ 0 |
Income Taxes (Detail Textuals)
Income Taxes (Detail Textuals) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | ||
Statutory federal income tax rate | 21.00% | 35.00% |
Percentage threshold limit of deductible net interest | 30.00% | |
Federal income tax expense (benefit) | $ 0 | $ 0 |
Federal net operating loss carryforwards, subject to expiration | 140,700 | |
Federal net operating loss carryforwards, not subject to expiration | 140,100 | |
State net operating loss carryforwards, subject to expiration | 142,800 | |
Increase in valuation allowance | $ 3,500 | |
Federal and state operating loss carry forwards expiration year | 2020 | |
Estimated maximum amount of distributions to Gaia | $ 1,100 |
Segment Information - Financial
Segment Information - Financial information for segments and reconciliation of Total of Reportable segments' income/(loss)from operations (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Contract revenue: | ||
Consolidated contract revenue | $ 12,728 | $ 15,592 |
Operating loss from continuing operations: | ||
Operating Loss | (14,971) | (17,386) |
Reconciliation of consolidated loss from operations to consolidated net loss: | ||
Other income | 1,063 | 68 |
Change in fair value of derivative liabilities and loss on debt extinguishment | (27,134) | (379) |
Amortization of debt discount and deferred loan costs | (1,042) | (3) |
Net loss | (42,084) | (17,700) |
Solar Division | ||
Contract revenue: | ||
Consolidated contract revenue | 12,703 | 15,586 |
Operating loss from continuing operations: | ||
Operating Loss | (5,855) | (8,729) |
POWERHOUSE | ||
Contract revenue: | ||
Consolidated contract revenue | 0 | 0 |
Operating loss from continuing operations: | ||
Operating Loss | (598) | (20) |
Other | ||
Contract revenue: | ||
Consolidated contract revenue | 25 | 6 |
Operating loss from continuing operations: | ||
Operating Loss | $ (8,518) | $ (8,637) |
Segment Information - Reconcili
Segment Information - Reconciliation of reportable segments' assets to consolidated total assets (Details 1) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 16,260 | $ 14,258 |
Solar Division | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 10,615 | 9,840 |
POWERHOUSE | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 1,366 | 1,140 |
Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 4,279 | $ 3,278 |
Subsequent Events (Detail Textu
Subsequent Events (Detail Textuals) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Apr. 04, 2019 | Mar. 29, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Subsequent Event [Line Items] | ||||
Contract revenue for service and sale and installation of solar energy systems | $ 12,728 | $ 15,592 | ||
Net loss | (42,084) | (17,700) | ||
Solar Division | ||||
Subsequent Event [Line Items] | ||||
Contract revenue for service and sale and installation of solar energy systems | $ 12,703 | $ 15,586 | ||
Subsequent Events | Class A common stock | Accredited investors | ||||
Subsequent Event [Line Items] | ||||
Number of shares issued and sold in registered offering | 15,938,280 | |||
Subsequent Events | Class A common stock | Series S Warrant | Accredited investors | ||||
Subsequent Event [Line Items] | ||||
Number of shares called by warrants | 1,430,141 | |||
Share price per share | $ 0.18 | |||
Proceeds from issuance of warrants | $ 3,300 | |||
Payments for stock issuance cost | $ 340 | |||
Subsequent Events | Class A common stock | Series R Warrant | Accredited investors | ||||
Subsequent Event [Line Items] | ||||
Number of shares called by warrants | 17,368,421 | |||
Share price per share | $ 0.19 | |||
Subsequent Events | Solar Division | ||||
Subsequent Event [Line Items] | ||||
Contract revenue for service and sale and installation of solar energy systems | $ 8,900 | |||
Net loss | $ 6,300 |