Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 03, 2019 | |
Document And Entity Information [Abstract] | ||
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Entity Central Index Key | 0001427570 | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | OBALON THERAPEUTICS INC | |
Trading Symbol | OBLN | |
Document Fiscal Year Focus | 2019 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | true | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 24,000,751 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 24,684 | $ 21,187 |
Short-term investments | 0 | 2,548 |
Accounts receivable, net of allowance of $773 and $665, respectively | 1,829 | 870 |
Inventory | 1,860 | 1,580 |
Other current assets | 1,539 | 2,462 |
Total current assets | 29,912 | 28,647 |
Property and equipment, net | 1,222 | 1,739 |
Lease right-of-use assets | 1,234 | |
Total assets | 32,368 | 30,386 |
Current liabilities: | ||
Accounts payable | 1,044 | 1,159 |
Accrued compensation | 986 | 3,805 |
Deferred revenue | 370 | 352 |
Other current liabilities | 2,214 | 1,985 |
Current portion of lease liabilities | 465 | |
Current portion of long-term loan | 19,952 | 9,930 |
Total current liabilities | 25,031 | 17,231 |
Lease liabilities long-term | 819 | |
Other long-term liabilities | 0 | 48 |
Total long-term liabilities | 819 | 48 |
Total liabilities | 25,850 | 17,279 |
Commitments and contingencies (See Note 10) | ||
Stockholders’ equity: | ||
Common stock, $0.001 par value; 100,000,000 shares authorized as of March 31, 2019 and December 31, 2018; 24,249,478 and 23,513,292 shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively | 24 | 23 |
Additional paid-in capital | 163,538 | 161,838 |
Accumulated deficit | (157,044) | (148,754) |
Total stockholders’ equity | 6,518 | 13,107 |
Total liabilities and stockholders’ equity | $ 32,368 | $ 30,386 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Allowances | $ 861 | $ 239 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, shares issued (in shares) | 24,249,478 | 23,513,292 |
Common stock, shares outstanding (in shares) | 24,249,478 | 23,513,292 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Revenue | $ 1,775 | $ 1,346 |
Cost of revenue | 1,232 | 769 |
Gross profit | 543 | 577 |
Operating expenses: | ||
Research and development | 2,439 | 2,639 |
Selling, general and administrative | 6,204 | 10,006 |
Total operating expenses | 8,643 | 12,645 |
Loss from operations | (8,100) | (12,068) |
Interest expense, net | (190) | (37) |
Other expense, net | 0 | (21) |
Net loss | (8,290) | (12,126) |
Other comprehensive income | 0 | 6 |
Net loss and comprehensive loss | $ (8,290) | $ (12,120) |
Net loss per share, basic and diluted (in dollars per share) | $ (0.36) | $ (0.71) |
Weighted-average common shares outstanding, basic and diluted (in shares) | 23,112,582 | 16,986,656 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common stock | Additional paid-in capital | Accumulated other comprehensive (loss) income | Accumulated deficit |
Beginning Balance at Dec. 31, 2017 | $ 35,113 | $ 18 | $ 146,474 | $ (5) | $ (111,374) |
Beginning Balance (in shares) at Dec. 31, 2017 | 17,500,604 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | 1,389 | 1,389 | |||
Issuance of common stock for cash upon exercise of stock options | 28 | 28 | |||
Issuance of common stock for cash upon exercise of stock options (in shares) | 20,678 | ||||
Vesting of early exercised stock options | 14 | 14 | |||
Issuance of restricted stock awards, net of cancellations (in shares) | 75,000 | ||||
Unrealized gain on short-term investments | 6 | 6 | |||
Net loss | (12,126) | (12,126) | |||
Ending Balance at Mar. 31, 2018 | 24,424 | $ 18 | 147,905 | $ 1 | (123,500) |
Ending Balance (in shares) at Mar. 31, 2018 | 17,596,282 | ||||
Beginning Balance at Dec. 31, 2018 | $ 13,107 | $ 23 | 161,838 | (148,754) | |
Beginning Balance (in shares) at Dec. 31, 2018 | 23,513,292 | 23,513,292 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | $ 1,105 | 1,105 | |||
Issuance of common stock for cash upon exercise of stock options | $ 1 | 1 | |||
Issuance of common stock for cash upon exercise of stock options (in shares) | 1,181 | 1,181 | |||
Vesting of early exercised stock options | $ 14 | 14 | |||
Issuance of common stock, net of issuance costs | 581 | $ 1 | 580 | ||
Cancellation of restricted stock awards (in shares) | (20,500) | ||||
Issuance of common stock, net of issuance costs (in shares) | 755,505 | ||||
Unrealized gain on short-term investments | 0 | ||||
Net loss | (8,290) | (8,290) | |||
Ending Balance at Mar. 31, 2019 | $ 6,518 | $ 24 | $ 163,538 | $ (157,044) | |
Ending Balance (in shares) at Mar. 31, 2019 | 24,249,478 | 24,249,478 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Operating activities: | ||
Net loss | $ (8,290) | $ (12,126) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 150 | 129 |
Stock-based compensation | 1,105 | 1,389 |
Loss on disposal of fixed assets | 0 | 107 |
Amortization of right-of-use asset | 92 | |
(Accretion) amortization of investment (discount) premium, net | (2) | (5) |
Amortization of debt discount | 22 | 11 |
Change in operating assets and liabilities: | ||
Accounts receivable, net | (959) | 1,670 |
Inventory | 102 | (449) |
Other current assets | 923 | 527 |
Accounts payable | (137) | 1,074 |
Accrued compensation | (2,819) | (2,663) |
Deferred revenue | 18 | (173) |
Lease liabilities, net | (42) | |
Other current and long-term liabilities | 195 | (93) |
Net cash used in operating activities | (9,642) | (10,602) |
Investing activities: | ||
Maturities of short-term investments | 2,550 | 23,302 |
Purchases of property and equipment | (19) | (358) |
Net cash provided by investing activities | 2,531 | 22,944 |
Financing activities: | ||
Proceeds from long-term loan | 10,000 | 0 |
Proceeds from issuance of common stock, net of issuance costs | 607 | 0 |
Proceeds from sale of common stock upon exercise of stock options | 1 | 28 |
Net cash provided by financing activities | 10,608 | 28 |
Net increase in cash and cash equivalents | 3,497 | 12,370 |
Cash and cash equivalents at beginning of period | 21,187 | 21,108 |
Cash and cash equivalents at end of period | 24,684 | 33,478 |
Supplemental cash flow information: | ||
Interest paid | 205 | 149 |
Unpaid issuance costs | 26 | 0 |
Property and equipment in accounts payable | $ 4 | $ 46 |
Organization and Basis of Prese
Organization and Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Obalon Therapeutics, Inc., or the Company, was incorporated in the state of Delaware on January 2, 2008. The Company is a vertically-integrated medical device company focused on developing and commercializing innovative medical devices to treat obese and overweight people. Using its patented technology, the Company has developed the Obalon® balloon system, the first and only U.S. Food and Drug Administration, or FDA, approved swallowable, gas-filled intragastric balloon designed to provide progressive and sustained weight loss in obese patients. The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP. The Company’s principal operations are located in Carlsbad, California, and it operates in one business segment. Liquidity As of March 31, 2019 , the Company has devoted a substantial portion of its efforts to product development, raising capital, and building infrastructure, and, since January 2017, U.S. commercialization. The Company has incurred operating losses and has experienced negative cash flows from operations since its inception. In July 2012, the Company realized initial revenue from its planned principal operations. The Company recognized total revenue of $1.8 million and $1.3 million for the three months ended March 31, 2019 and 2018 , respectively. However, the Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and has funded its activities to date almost exclusively from debt and equity financings. As reflected in the accompanying condensed consolidated financial statements, the Company has a limited operating history and the sales and income potential of the Company’s business are unproven. The Company has not been profitable since inception, and as of March 31, 2019 , its accumulated deficit was $157.0 million . Since inception, the Company has financed its operations primarily through private placements of preferred securities, the sale of common stock through its initial public offering (IPO), and a subsequent private placement, and, to a lesser extent, debt financing arrangements. As of March 31, 2019 , the Company had cash and cash equivalents of $24.7 million , which included $20.0 million in debt outstanding with Pacific Western Bank (as successor-in-interest to Square 1 Bank). The terms of the loan and security agreement with Pacific Western Bank require the Company to maintain a cash balance in its accounts with the lender in an amount equal to or greater than the outstanding indebtedness, which effectively means the Company only has access to $4.7 million of its cash and cash equivalents as of March 31, 2019 . As a result, there is substantial doubt about the Company's ability to continue as a going concern and if the Company is not able to raise capital within the second quarter of 2019, the Company will not be able to support ongoing operations. The Company will need additional funding to pay expenses relating to its operating activities, including selling, general and administrative expenses and research and development expenses. The Company plans to use proceeds from the Equity Distribution Agreement and the Lincoln Park Purchase Agreement to the extent available to fund operations and will also seek other sources of funding. Adequate funding, may not be available to the Company on acceptable terms, or at all. The failure to obtain sufficient funds on acceptable terms could have a material adverse effect on the Company's business, results of operations or financial condition. See Note 8 for further detail regarding the 2018 equity financing transactions. The Company’s ability to continue as a going concern, and correspondingly to execute on its business plan and strategy, is dependent upon the Company’s ability to accomplish one or more of the following: renegotiate the terms of its loan and security agreement with Pacific Western Bank to reduce the existing cash collateral covenant; raise additional capital in the very near term to fund its ongoing operations or engage in a strategic alternative. If the Company is unable to accomplish one or more of these alternatives before its cash and cash equivalents fall below $20.0 million it could default under the loan and security agreement and may have to pursue or otherwise accelerate strategic alternatives, including the possibility of seeking bankruptcy protection to protect stakeholder value in the event other options are not reasonably executable. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Except for the operating lease policy described below, there were no significant changes to the accounting policies during the three months ended March 31, 2019 , from the significant accounting policies described in Note 2 of the “Notes to Consolidated Financial Statements” in the Company's Annual Report on Form 10-K for the year ended December 31, 2018, filed on February 22, 2019. Leases Effective January 1, 2019, the Company adopted ASC No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02” or “ASC 842”), which supersedes the current accounting for leases, using the modified retrospective transition method. The Company has elected to apply the practical expedients allowed by the standard for existing leases. The new standard, while retaining two distinct types of leases, finance and operating, (i) requires lessees to record a right-of-use (“ROU”) asset and a related liability for the rights and obligations associated with a lease, regardless of lease classification, and recognize lease expense in a manner similar to current accounting, (ii) eliminates current real estate specific lease provisions, (iii) modifies the lease classification criteria and (iv) aligns many of the underlying lessor model principles with those in the new revenue standard. The Company determines the initial classification and measurement of its ROU asset and lease liabilities at the lease commencement date and thereafter, if modified. The Company recognizes a ROU asset for its operating leases with lease terms greater than 12 months. The lease term includes any renewal options and termination options that the Company is reasonably assured to exercise. The present value of lease payments is determined by using the incremental borrowing rate for operating leases determined by using the incremental borrowing rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment and term. The Company applied the new guidance to its existing facility lease at the time of adoption and recognized a ROU asset and lease liability of $1.2 million and $1.3 million , respectively, as of March 31, 2019. Rent expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in research and development and general and administrative expenses in the statements of operations. Revenue Recognition The Company recognizes revenue, in accordance with ASC 606, when control of its products is transferred to its customers in an amount that reflects the consideration it expects to receive in exchange for those products. The Company's revenue recognition process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue as performance obligations are satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Revenue is generated from sales of the Obalon Balloon System to physicians and institutions in the United States and to a distributor in the Middle East. The Company recognizes revenue upon shipment of its product as the Company's standard contract terms dictate that control transfers to the customer upon shipment of its product. Invoicing typically occurs upon shipment and the time period between invoicing and when payment is due is not significant. Sales taxes collected are excluded from revenues. Shipping charges billed to customers are included in revenue and related shipping cost is included in cost of revenue. The Company's revenue contracts do not provide for maintenance. Commissions are considered incremental costs to obtain a contract with a customer and paid to salespeople when contracts are executed. Commissions are recognized as a selling expense when incurred as the amortization period is one year or less. The components of the Obalon Balloon System are typically packaged in a kit and shipped to the customer at the same time, satisfying the majority of performance obligations in the contract. The Company recognizes revenue for any unsatisfied, distinct performance obligations, such as undelivered components, as they are satisfied based on the standalone selling price of each performance obligation. The Company estimates the standalone selling price of each performance obligation by estimating the expected cost of satisfying that performance obligation plus an appropriate margin. When the Company enters into contracts with multiple performance obligations, such obligations are generally satisfied within a short time frame of approximately three to six months after the contract execution date. The Company does not disclose the value of the unsatisfied performance obligations within its contracts. The Company offers a swallow guarantee program in the United States where it may provide replacement balloons to customers when their patients are unsuccessful in swallowing an Obalon balloon, subject to certain requirements and restrictions. The Company considers the replacement balloons provided under this program as an additional performance obligation in the contract and defers revenue relating to the replacement balloons based on an expected swallow failure rate and then recognizes revenue when replacement balloons are provided. The Company recognizes revenue at the net sales price, which reflects the consideration the Company believes it is most likely to receive. The net sales price includes estimates of variable consideration for customer incentives and returns. The Company reserves for product returns as a reduction to revenue in the period when the related revenue is recognized. The Company estimates its product returns based on historical return rates and specifically known events. Estimated costs of customer incentive programs are recorded at the time the incentives are offered, based on the specific terms and conditions of the program. Customer incentives that provide discounts to the customer on purchases of current or future product are recorded as a reduction of revenue in the period the related product revenue is recognized. Any consideration payable to a customer is presumed as a reduction to revenue unless the Company can demonstrate that the consideration provided to the customer is in exchange for a distinct good or service. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company would adjust these estimates, which would impact net product revenue and results of operations in the period such variances become known. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. All revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated financial statements as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s condensed consolidated financial position as of March 31, 2019 and its condensed consolidated results of operations for the three months ended March 31, 2019 and 2018 , statements of stockholders' equity for the three months ended March 31, 2019 and 2018 , and cash flows for the three months ended March 31, 2019 and 2018 . The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other future annual or interim period. The balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date. These financial statements should be read in conjunction with the Company’s audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 , filed on February 22, 2019. Fair Value Measurements The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to the short maturity of these instruments. The carrying value of the term loan approximates its fair value as the interest rate and other terms are that which are currently available to the Company. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with authoritative accounting guidance: • Level 1 inputs: Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 inputs: Other than quoted prices included in Level 1, inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents and trade accounts receivable, which are generally not collateralized. The Company limits its exposure to credit loss by placing its cash equivalents with high credit quality financial institutions and investing in high quality short-term debt instruments. The Company’s customers consist of physicians and institutions in the United States and one international distributor. The Company establishes customer credit policies related to its accounts receivable based on historical collection experiences within the various markets in which the Company operates, historical past-due amounts, and any specific information that the Company becomes aware of such as bankruptcy or liquidity issues of customers. The following table summarizes certain financial data for the customers who accounted for 10.0% or more of sales and accounts receivable. Three Months Ended 2019 2018 Single largest customer:* Revenue 33.1 % 63.1 % Second largest customer: Revenue 14.7 % 1.7 % March 31, 2019 December 31, 2018 Single largest customer:* Accounts receivable 32.2 % — % Second largest customer: Accounts receivable 17.0 % 2.1 % *The Company's largest customer for the three months ended March 31, 2019 and 2018 was its Middle East distributor. There were no other international sales aside from sales to this distributor for the three months ended March 31, 2019 and 2018 . Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per common share, since the effects of potentially dilutive securities are anti-dilutive due to the net loss position of all periods presented. Potentially dilutive common stock equivalents are comprised of warrants, if material, unvested restricted stock awards (RSAs), and unexercised stock options outstanding under the Company’s equity plan. Recently Issued and Adopted Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under this new guidance, at the commencement date, lessees will be required to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. This guidance is not applicable for leases with a term of 12 months or less. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) , which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. The new standard is effective for annual reporting periods, and interim periods within those periods, beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases Topic (842): Targeted Improvements. This ASU provides companies an option to apply the transition provisions of the new lease standard at its adoption date instead of at the earliest comparative period presented in its financial statements. The Company elected the optional method to account for the impact of the adoption with a cumulative-effect adjustment in the period of adoption, if needed, and did not restate prior periods. The Company elected certain practical expedients permitted under the transition guidance. As part of the adoption, the Company recorded a ROU asset and liability upon adoption of the guidance pertaining to its long-term real estate lease for its corporate facilities. No cumulative-effect adjustment was needed. Recently Issued Accounting Pronouncements not yet adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses , which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820); Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . This guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain disclosures required by this guidance must be applied on a retrospective basis and others on a prospective basis. The guidance will be effective for fiscal years beginning after December 15, 2019, although early adoption is permitted. The Company is currently evaluating this guidance to determine the impact, if any, it may have on its consolidated financial statements. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Instruments Recorded at Fair Value on a Recurring Basis The Company has segregated all financial assets and liabilities that are measured at fair value on a recurring basis (at least annually) into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. Assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are as follows (in thousands): Fair value measurements at reporting date using Balance as of March 31, 2019 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Cash equivalents: Money market funds $ 24,684 $ 24,684 $ — $ — Total assets $ 24,684 $ 24,684 $ — $ — Fair value measurements at reporting date using Balance as of December 31, 2018 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Cash equivalents: Money market funds $ 21,187 $ 21,187 Short-term investments: U.S. Treasury bonds 2,548 2,548 — — Total assets $ 23,735 $ 23,735 — — The Company’s investments in Level 1 assets are valued based on publicly available quoted market prices for identical securities as of March 31, 2019 and December 31, 2018 . Instruments Not Recorded at Fair Value on a Recurring Basis The estimated fair value of the Company's long-term loan is determined by Level 2 inputs and is based primarily on quoted market prices for the same or similar issues. The recorded value of the Company's long-term loan approximates the current fair value as the interest rate and other terms are that which are currently available to the Company. |
Net Loss per Share
Net Loss per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | Net Loss per Share The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except shares and per share data): Three Months Ended March 31, 2019 2018 Net loss $ (8,290 ) (12,126 ) Weighted-average common shares outstanding, basic and diluted 23,112,582 16,986,656 Net loss per share, basic and diluted $ (0.36 ) $ (0.71 ) The following table sets forth the outstanding potentially dilutive securities determined using the treasury stock method that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares): Three Months Ended March 31, 2019 2018 Stock options to purchase common stock 182,184 596,209 Total 182,184 596,209 |
Balance Sheet Details
Balance Sheet Details | 3 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Balance Sheet Details | Balance Sheet Details Inventory consist of the following (in thousands): March 31, 2019 December 31, 2018 Raw materials $ 1,595 $ 1,090 Work in process 67 288 Finished goods 198 202 Total $ 1,860 $ 1,580 Other current assets consist of the following (in thousands): March 31, 2019 December 31, 2018 Prepaid expenses 1,539 2,329 Interest receivable — 12 Other assets — 121 Total $ 1,539 $ 2,462 Property and equipment, net consist of the following (in thousands): March 31, 2019 December 31, 2018 Computer hardware $ 410 $ 410 Computer software 274 274 Leasehold improvements 405 405 Furniture and fixtures 179 178 Scientific equipment 1,975 1,921 Construction in progress, or CIP 103 530 3,346 3,718 Less: accumulated depreciation (2,124 ) (1,979 ) Total $ 1,222 $ 1,739 Depreciation expense was $0.2 million and $0.1 million for the three months ended March 31, 2019 and 2018 , respectively. Other current liabilities consist of the following (in thousands): March 31, 2019 December 31, 2018 Accrued legal and professional fees $ 542 $ 624 Accrued customer incentives 485 467 Accrued sales and other taxes 139 132 Accrued marketing expenses 241 — Other accrued expenses 807 762 Total $ 2,214 $ 1,985 |
Term Loan
Term Loan | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Term Loan | Term Loan In June 2013, the Company entered into a $3.0 million loan and security agreement (the "Loan Agreement") with Pacific Western Bank (successor-in-interest to Square 1 Bank), which it subsequently amended in October 2014, September 2016, December 2016, June 2017 and July 2018. In July 2018, the Company executed the Fifth Amendment to the Loan and Security Agreement (the "Loan Amendment") with Pacific Western Bank, which increased the loan capacity to $20 million from $10 million . The loan capacity of $20 million consists of two tranches as follows: a first tranche consisting of $10.0 million funded on July 10, 2018, of which the full $10.0 million was required to settle the existing debt with Pacific Western Bank on a net settlement basis (pursuant to its original terms); and a second tranche consisting of an additional $10.0 million which may be drawn at any time prior to July 9, 2019. During the first quarter of 2019, the Company drew down on the remaining $10.0 million tranche. As of March 31, 2019 , the Company had $20.0 million in outstanding borrowings under the Loan Agreement. The outstanding debt has a variable annual interest rate equal to the greater of the prime rate plus 1.5% per annum, or 5% , and matures in July 2022. As the prime rate was 5.5% as of March 31, 2019 , the interest rate on the debt was 7.0% as of March 31, 2019 . The Loan Amendment provides for an interest-only period through July 9, 2019 followed by 36 equal monthly installments of principal and interest with the first principal payment due on August 9, 2019. The Loan Agreement may be prepaid in full at any time with no additional cost. The loan fee paid and the remaining balance of debt issuance costs and debt discount on the previous loan agreement held with Pacific Western Bank are amortized to interest expense over the remaining term of the Loan Agreement using the effective-interest method. The Loan Agreement also states that the Company's accounts maintained with the bank contain an aggregate balance in an amount equal to or greater than the total amount of outstanding debt under the Loan Agreement. In addition, the Company is required to deposit into such accounts a portion or all of the net proceeds from its next equity offering, which the Company satisfied in connection with the completion of the private placement in August 2018. These, and other covenants under the Loan Agreement, may make it difficult to operate the Company's business. As of March 31, 2019 , the Company was in compliance with all covenants under the loan and security agreement. If the Company is unable to raise additional capital and the cash balance in its accounts with its lender falls below the amount of outstanding debt, the Company would be in default. If any event of default is triggered and the Company does not obtain a waiver from the lender, the lender can, among other things, accelerate the entire outstanding amount of the debt, which could significantly deplete its cash resources, cause it to raise additional capital at unfavorable terms, require it to sell portions of the business or result in the Company seeking bankruptcy protection to protect stakeholder value. As a result, there is substantial doubt about the Company's ability to continue as a going concern and if the Company is not able to raise capital within the second quarter of 2019, the Company will not be able to support ongoing operations. Due to the Company's current cash flow position, the substantial doubt about its ability to continue as a going concern, and the requirement under the Loan Agreement to maintain accounts with the bank at an aggregate balance in an amount equal to or greater than the total outstanding debt under the Loan Agreement, the Company reclassified the long-term portion of the term loan to current. If any event of default occurs, or in order to avoid an event of default, the Company may be required to file for bankruptcy. The Company will continue to evaluate the debt classification on a quarterly basis and evaluate for reclassification in the future should its financial condition improve. Total long-term loan and unamortized debt discount balances are as follows (in thousands): March 31, 2019 Face value $ 20,000 Less: unamortized debt issuance costs (48 ) Total term loan $ 19,952 Less: current portion of long-term loan (19,952 ) Total long-term loan, excluding current portion $ — As of March 31, 2019 , future principal payments due under the Loan Agreement are as follows (in thousands): Year ended: December 31, 2019 $ 2,778 December 31, 2020 6,666 December 31, 2021 6,666 December 31, 2022 3,890 Total future principal payments due under the Loan Agreement $ 20,000 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plan As of March 31, 2019 , 1,296,667 stock options and awards remained available for future grant under the 2016 Equity Incentive Plan. No other plans had options or awards available for grant. The Company recorded total non-cash compensation, including non-cash compensation to employees and nonemployees in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended March 31, 2019 2018 Cost of revenue $ 39 $ 10 Research and development 219 243 Selling, general and administrative 847 1,136 Total $ 1,105 $ 1,389 Unrecognized stock-based compensation expense at March 31, 2019 was approximately $5.7 million , which is expected to be recognized over a weighted-average term of 2.1 years . Incentive Stock Options The following table summarizes stock option transactions for the 2016 Equity Incentive Plan for the three months ended March 31, 2019 (in thousands, except shares and per share data): Number of shares Weighted- average exercise price per share Weighted- average remaining contractual life (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2018 3,360,048 $ 5.83 Options granted 819,615 2.28 Options exercised (1,181 ) 0.87 Options canceled (16,952 ) 5.14 Outstanding at March 31, 2019 4,161,530 $ 5.14 7.5 $ 209 Vested and expected to vest at March 31, 2019 3,868,235 $ 5.20 7.5 $ 209 Vested and exercisable at March 31, 2019 1,807,538 $ 6.02 6.6 $ 206 Restricted Stock Awards The following table summarizes restricted stock award transactions for the 2016 Equity Incentive Plan for the three months ended March 31, 2019 : Number of awards Weighted- average grant date fair value Outstanding at December 31, 2018 611,942 $ 5.89 Awards granted — — Awards released (47,500 ) 7.15 Awards canceled (20,500 ) 6.37 Outstanding at March 31, 2019 543,942 $ 5.76 Restricted Stock Units The following table summarizes restricted stock unit transactions for the 2016 Equity Incentive Plan for the three months ended March 31, 2019 : Number of shares Weighted-average grant date fair value Aggregate intrinsic value (in thousands) Outstanding at December 31, 2018 — $ — Awards granted 86,957 2.30 Awards released — — Awards canceled — — Outstanding at March 31, 2019 86,957 $ 2.30 $ 125 Vested and expected to vest at March 31, 2019 79,174 $ 2.30 $ 114 |
Stockholder's Equity
Stockholder's Equity | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Stockholder's Equity | Stockholder's Equity Equity Distribution Agreement On December 27, 2018, the Company entered into the Equity Distribution Agreement, with Canaccord, pursuant to which the Company may, from time to time, sell shares of its common stock, having an aggregate offering price of up to $10.0 million through Canaccord, as the Company's sales agent. The Company will pay Canaccord a commission of 3.0% of the gross proceeds from the sales of common stock sold pursuant to the terms of the Equity Distribution Agreement. The Equity Distribution Agreement also contains, among other things, customary representations, warranties and covenants by the Company and indemnification obligations of the Company and Canaccord as well as certain termination rights for both the Company and Canaccord. The Company has no obligation to sell any ATM Shares under the Equity Distribution Agreement, and may at any time suspend solicitation and offers under the Equity Distribution Agreement. Until the aggregate market value of the Company's common stock held by non-affiliates, or public float, is greater than $75.0 million , the amount the Company can raise through primary public offerings of securities in any twelve-month period using shelf registration statements, including sales under the Company's ATM program, is limited to an aggregate of one-third of its public float. The Company incurred $0.2 million of legal, accounting and other professional fees related to the Equity Distribution Agreement. These amounts are included as deferred charges within other current assets on the Company's balance sheet as of March 31, 2019 and will be charged against paid-in capital upon future proceeds from the sale of common stock under the Equity Distribution Agreement. As of March 31, 2019 , the Company sold 5,505 shares under the Equity Distribution Agreement for aggregate gross proceeds of an immaterial amount. Lincoln Park Purchase Agreement On December 27, 2018, the Company entered into the Lincoln Park Purchase Agreement and a registration rights agreement, or the Registration Rights Agreement, with Lincoln Park, pursuant to which the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $20.0 million of the Company's common stock, over the 36 -month period commencing in February 2019. Under the Lincoln Park Purchase Agreement, on any business day selected by the Company on which the closing price of its common stock is not less than $0.50 per share (subject to “standard anti-dilution adjustments”), the Company may direct Lincoln Park to purchase up to 50,000 shares of common stock on such business day (each, a “Regular Purchase”), provided, however, that (i) the Regular Purchase may be increased to up to 100,000 shares, provided that the closing sale price of the common stock is not below $2.00 on the purchase date (subject to standard anti-dilution adjustments) (ii) the Regular Purchase may be increased to up to 125,000 shares, provided that the closing sale price of the common stock is not below $3.00 on the purchase date (subject to standard anti-dilution adjustments) and (iii) the Regular Purchase may be increased to up to 150,000 shares, provided that the closing sale price of the common stock is not below $4.00 on the purchase date (subject to standard anti-dilution adjustments). In each case, Lincoln Park’s maximum commitment in any single Regular Purchase may not exceed $1,000,000 . The purchase price per share for each such Regular Purchase will be based off of prevailing market prices of the Company's common stock immediately preceding the time of sale without any fixed discount. In addition to Regular Purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases if the closing sale price of the common stock exceeds certain threshold prices as set forth in the Lincoln Park Purchase Agreement. Depending on the prevailing market price of our common stock, the Company may not be able to sell shares to Lincoln Park for the maximum $20.0 million over the term of the Lincoln Park Purchase Agreement. For example, under the rules of the Nasdaq Capital Market, in no event may the Company issue more than 19.99% of its shares outstanding (which is approximately 4,654,694 shares based on 23,285,112 shares outstanding prior to the signing of the Lincoln Park Purchase Agreement) under the Lincoln Park Purchase Agreement unless the Company obtains stockholder approval or an exception pursuant to the rules of the Nasdaq Capital Market is obtained to issue more than 19.99% . This limitation will not apply if, at any time the exchange cap is reached and at all times thereafter, the average price paid for all shares issued and sold under the Lincoln Park Purchase Agreement is equal to or greater than $2.244 , which was the average closing price of the Company's common stock for the five trading days ending on the trading day immediately preceding the date, plus an incremental amount of $0.1157 for the commitment shares the Company issued to Lincoln Park. The Company is not required or permitted to issue any shares of common stock under the Purchase Agreement if such issuance would breach the its obligations under the rules or regulations of the Nasdaq Capital Market. In addition, Lincoln Park will not be required to purchase any shares of the Company's common stock if such sale would result in Lincoln Park’s beneficial ownership exceeding 9.99% of the then outstanding shares of the Company's common stock. The Company's inability to access a portion or the full amount available under the Lincoln Park Purchase Agreement, in the absence of any other financing sources, could have a material adverse effect on its business. The Company incurred $0.7 million of commitment shares issued, legal, accounting, registration and other professional fees related to the Lincoln Park Purchase Agreement. These amounts are included as deferred charges within other current assets on the Company's balance sheet as of March 31, 2019 and will be charged against paid-in capital upon future proceeds from the sale of common stock under the Lincoln Park Purchase Agreement. As of March 31, 2019 , the Company has sold 750,000 shares under the Lincoln Park Purchase Agreement for aggregate gross proceeds of $1.3 million . Common Stock Reserved for Future Issuance Common stock reserved for future issuance consists of the following as of March 31, 2019 : Stock options issued and outstanding 4,161,530 Authorized for future option and ongoing vesting of award grants 1,296,667 Authorized for future issuance under ESPP 745,234 Total 6,203,431 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For the three months ended March 31, 2019 and 2018 , the Company did not record an income tax provision. The U.S. federal and California deferred tax assets generated from the Company’s net operating losses have been fully reserved, as the Company believes it is more likely than not the benefit will not be realized. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Operating Lease The Company leases facilities under a noncancelable operating lease that expires on March 31, 2022 . Under the terms of the facilities lease, the Company is required to pay its proportionate share of property taxes, insurance and normal maintenance costs. Upon the Company’s adoption of ASC 842 as of January 1, 2019, the Company recognized a ROU asset and lease liability for its building lease, assuming a 7.0% discount rate. Any short-term leases defined as 12 months or less or month-to-month leases were excluded and continue to be expensed each month. Total costs associated with these leases for the three months ended March 31, 2019 was immaterial. The Company determines if an arrangement is a lease at inception. The exercise of lease renewal options is at the Company’s sole discretion and were not included in the calculation of the Company’s lease liability as the Company is not able to determine without uncertainty if the renewal option will be exercised. The depreciable life of assets and leasehold improvements are limited to the expected term, unless there is a transfer of title or purchase option reasonably certain of exercise. The Company’s lease agreements do not contain any variable lease payments, residual value guarantees or any restrictive covenants. The Company’s ROU asset represents the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date of the lease or the ASC 842 adoption date, whichever is later, based on the present value of lease payments over the lease term. When readily determinable, the Company uses the implicit rate in determining the present value of lease payments, or 7.0% , as of the adoption date. When leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the lease commencement date or adoption date, including the lease term. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Future minimum annual lease payments under such leases are as follows as of March 31, 2019 (in thousands): Undiscounted lease payments: Remainder of 2019 $ 349 2020 475 2021 489 2022 116 Total undiscounted lease payments 1,429 Less: imputed interest (145 ) Lease liability 1,284 Less: current portion of lease liability (465 ) Lease liability, less current portion $ 819 As of March 31, 2019, the Company’s remaining lease term is 3.0 years . Rent expense totaled $0.1 million for both the three months ended March 31, 2019 and 2018. The Company paid $0.1 million of cash payments related to its operating lease agreement for the three months ended March 31, 2019. The Company enters into contracts in the normal course of business with clinical trial sites and clinical supply manufacturing organizations and with vendors for preclinical studies, research supplies and other services and products for operating purposes. These contracts generally provide for termination after a notice period, and, therefore, are cancelable contracts and not included in the table below. Pursuant to our supplier agreement entered into in December 2018, we are obligated to purchase certain minimum quantities. These costs scale up as our projected manufacturing volume increases. Under the terms of the agreement, we can reduce the forecasted minimum quantities and are required to incur a holding fee for items manufactured by the supplier. This represents the one year minimum commitment of approximately $1.5 million as of March 31, 2019. Termination of Stock Offering On January 23, 2018, the Company issued a press release announcing the termination of its previously announced offering of common stock due to a purported whistleblower compliant, which was later found to be without merit. As of March 31, 2019, the Company did not record any liability associated with termination of the offering, and management believed that the likelihood is remote that the Company will incur material fees in the future. Shareholder Lawsuit On February 14 and 22, 2018, plaintiff stockholders filed class action lawsuits against the Company and certain of its executive officers in the United States District Court for the Southern District of California (Hustig v. Obalon Therapeutics, Inc., et al., Case No. 3:18-cv-00352-AJB-WVG, and Cook v. Obalon Therapeutics, Inc. et al., Case No. 3:18-cv-00407-CAB-RBB). On July 24, 2018, the court appointed Inter-Local Pension Fund GCC/IBT as lead plaintiff. On October 5, 2018, plaintiffs filed an amended complaint. The amended complaint alleges that the Company and certain of its executive officers made false and misleading statements and failed to disclose material adverse facts about its business, operations, and prospects in violation of Sections 10(b) (and Rule 10b-5 promulgated thereunder) and 20(a) of the Exchange Act. The amended complaint also alleges violations of Section 11 of the Exchange Act arising out of the Company’s initial public offering. The plaintiffs seek damages, interest, costs, attorneys' fees, and other unspecified equitable relief. The underwriters from our initial public offering have also been named as defendants in this case and we have certain obligations under the underwriting agreement to indemnify them for their costs and expenses incurred in connection with this litigation. The Company believes the complaint is without merit, and on December 4, 2018, the Company moved to dismiss the amended complaint. The court has scheduled a hearing for May 30, 2019 on the motion to dismiss. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Restructuring Charges On April 2, 2019, the Company notified approximately 49 employees whose employment will be terminated, or approximately 50% of its workforce, with the intent to refocus activities, streamline operations and make more efficient use of cash. As a result of the workforce reduction, the Company recorded a restructuring charge in April 2019 for termination benefits of $0.5 million . As of the filing of the Form 10-Q, $0.4 million of this charge has been paid, resulting in a remaining accrual of $0.1 million . Additionally, as a result of the workforce reduction, the Company will recognize a reversal of stock compensation expense of approximately $0.7 to $0.9 million in April of 2019. The Company expects to substantially complete the organizational restructuring by the end of the second quarter of 2019. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Leases | Leases Effective January 1, 2019, the Company adopted ASC No. 2016‑02, Leases (Topic 842) (“ASU 2016‑02” or “ASC 842”), which supersedes the current accounting for leases, using the modified retrospective transition method. The Company has elected to apply the practical expedients allowed by the standard for existing leases. The new standard, while retaining two distinct types of leases, finance and operating, (i) requires lessees to record a right-of-use (“ROU”) asset and a related liability for the rights and obligations associated with a lease, regardless of lease classification, and recognize lease expense in a manner similar to current accounting, (ii) eliminates current real estate specific lease provisions, (iii) modifies the lease classification criteria and (iv) aligns many of the underlying lessor model principles with those in the new revenue standard. The Company determines the initial classification and measurement of its ROU asset and lease liabilities at the lease commencement date and thereafter, if modified. The Company recognizes a ROU asset for its operating leases with lease terms greater than 12 months. The lease term includes any renewal options and termination options that the Company is reasonably assured to exercise. The present value of lease payments is determined by using the incremental borrowing rate for operating leases determined by using the incremental borrowing rate of interest that the Company would pay to borrow on a collateralized basis an amount equal to the lease payments in a similar economic environment and term. The Company applied the new guidance to its existing facility lease at the time of adoption and recognized a ROU asset and lease liability of $1.2 million and $1.3 million , respectively, as of March 31, 2019. Rent expense for operating leases is recognized on a straight-line basis over the reasonably assured lease term based on the total lease payments and is included in research and development and general and administrative expenses in the statements of operations. |
Revenue Recognition | Revenue Recognition The Company recognizes revenue, in accordance with ASC 606, when control of its products is transferred to its customers in an amount that reflects the consideration it expects to receive in exchange for those products. The Company's revenue recognition process involves identifying the contract with a customer, determining the performance obligations in the contract, determining the transaction price, allocating the transaction price to the distinct performance obligations in the contract, and recognizing revenue as performance obligations are satisfied. A performance obligation is considered distinct from other obligations in a contract when it provides a benefit to the customer either on its own or together with other resources that are readily available to the customer and is separately identified in the contract. The Company considers a performance obligation satisfied once it has transferred control of a good or service to the customer, meaning the customer has the ability to use and obtain the benefit of the good or service. The Company recognizes revenue for satisfied performance obligations only when it determines there are no uncertainties regarding payment terms or transfer of control. Revenue is generated from sales of the Obalon Balloon System to physicians and institutions in the United States and to a distributor in the Middle East. The Company recognizes revenue upon shipment of its product as the Company's standard contract terms dictate that control transfers to the customer upon shipment of its product. Invoicing typically occurs upon shipment and the time period between invoicing and when payment is due is not significant. Sales taxes collected are excluded from revenues. Shipping charges billed to customers are included in revenue and related shipping cost is included in cost of revenue. The Company's revenue contracts do not provide for maintenance. Commissions are considered incremental costs to obtain a contract with a customer and paid to salespeople when contracts are executed. Commissions are recognized as a selling expense when incurred as the amortization period is one year or less. The components of the Obalon Balloon System are typically packaged in a kit and shipped to the customer at the same time, satisfying the majority of performance obligations in the contract. The Company recognizes revenue for any unsatisfied, distinct performance obligations, such as undelivered components, as they are satisfied based on the standalone selling price of each performance obligation. The Company estimates the standalone selling price of each performance obligation by estimating the expected cost of satisfying that performance obligation plus an appropriate margin. When the Company enters into contracts with multiple performance obligations, such obligations are generally satisfied within a short time frame of approximately three to six months after the contract execution date. The Company does not disclose the value of the unsatisfied performance obligations within its contracts. The Company offers a swallow guarantee program in the United States where it may provide replacement balloons to customers when their patients are unsuccessful in swallowing an Obalon balloon, subject to certain requirements and restrictions. The Company considers the replacement balloons provided under this program as an additional performance obligation in the contract and defers revenue relating to the replacement balloons based on an expected swallow failure rate and then recognizes revenue when replacement balloons are provided. The Company recognizes revenue at the net sales price, which reflects the consideration the Company believes it is most likely to receive. The net sales price includes estimates of variable consideration for customer incentives and returns. The Company reserves for product returns as a reduction to revenue in the period when the related revenue is recognized. The Company estimates its product returns based on historical return rates and specifically known events. Estimated costs of customer incentive programs are recorded at the time the incentives are offered, based on the specific terms and conditions of the program. Customer incentives that provide discounts to the customer on purchases of current or future product are recorded as a reduction of revenue in the period the related product revenue is recognized. Any consideration payable to a customer is presumed as a reduction to revenue unless the Company can demonstrate that the consideration provided to the customer is in exchange for a distinct good or service. Actual amounts of consideration ultimately received may differ from the Company’s estimates. If actual results vary from the Company’s estimates, the Company would adjust these estimates, which would impact net product revenue and results of operations in the period such variances become known. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period. Reported amounts and note disclosures reflect the overall economic conditions that are most likely to occur and anticipated measures management intends to take. Actual results could differ materially from those estimates. All revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected. |
Unaudited Interim Condensed Consolidated Financial Statements | Unaudited Interim Condensed Consolidated Financial Statements The interim condensed consolidated financial statements as of March 31, 2019 and for the three months ended March 31, 2019 and 2018 are unaudited. The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual financial statements and reflect, in the opinion of management, all adjustments of a normal and recurring nature that are necessary for the fair presentation of the Company’s condensed consolidated financial position as of March 31, 2019 and its condensed consolidated results of operations for the three months ended March 31, 2019 and 2018 , statements of stockholders' equity for the three months ended March 31, 2019 and 2018 , and cash flows for the three months ended March 31, 2019 and 2018 . The results of operations for the three months ended March 31, 2019 are not necessarily indicative of the results to be expected for the year ending December 31, 2019 or for any other future annual or interim period. The balance sheet as of December 31, 2018 included herein was derived from the audited financial statements as of that date. These financial statements should be read in conjunction with the Company’s audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 , filed on February 22, 2019. |
Fair Value Measurements | Fair Value Measurements The carrying values of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate their fair values due to the short maturity of these instruments. The carrying value of the term loan approximates its fair value as the interest rate and other terms are that which are currently available to the Company. The Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible. The Company determines fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels in accordance with authoritative accounting guidance: • Level 1 inputs: Observable inputs such as unadjusted, quoted prices in active markets for identical assets or liabilities at the measurement date. • Level 2 inputs: Other than quoted prices included in Level 1, inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. • Level 3 inputs: Unobservable inputs for the asset or liability used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date. |
Concentrations of Credit Risk | Concentrations of Credit Risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash equivalents and trade accounts receivable, which are generally not collateralized. The Company limits its exposure to credit loss by placing its cash equivalents with high credit quality financial institutions and investing in high quality short-term debt instruments. The Company’s customers consist of physicians and institutions in the United States and one international distributor. The Company establishes customer credit policies related to its accounts receivable based on historical collection experiences within the various markets in which the Company operates, historical past-due amounts, and any specific information that the Company becomes aware of such as bankruptcy or liquidity issues of customers. |
Net Loss per Share | Net Loss per Share Basic net loss per share is calculated by dividing the net loss by the weighted-average number of shares of common stock outstanding during the period without consideration for common stock equivalents. Diluted net loss per share is the same as basic net loss per common share, since the effects of potentially dilutive securities are anti-dilutive due to the net loss position of all periods presented. Potentially dilutive common stock equivalents are comprised of warrants, if material, unvested restricted stock awards (RSAs), and unexercised stock options outstanding under the Company’s equity plan. |
Recently Issued and Adopted Accounting Pronouncements | Recently Issued and Adopted Accounting Pronouncements Recently Adopted Accounting Pronouncements In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . Under this new guidance, at the commencement date, lessees will be required to recognize (i) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis and (ii) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. This guidance is not applicable for leases with a term of 12 months or less. In July 2018, the FASB issued ASU 2018-10, Codification Improvements to Topic 842 (Leases) , which provides narrow amendments to clarify how to apply certain aspects of the new lease standard. The new standard is effective for annual reporting periods, and interim periods within those periods, beginning after December 15, 2018, with early adoption permitted. In July 2018, the FASB issued ASU No. 2018-11, Leases Topic (842): Targeted Improvements. This ASU provides companies an option to apply the transition provisions of the new lease standard at its adoption date instead of at the earliest comparative period presented in its financial statements. The Company elected the optional method to account for the impact of the adoption with a cumulative-effect adjustment in the period of adoption, if needed, and did not restate prior periods. The Company elected certain practical expedients permitted under the transition guidance. As part of the adoption, the Company recorded a ROU asset and liability upon adoption of the guidance pertaining to its long-term real estate lease for its corporate facilities. No cumulative-effect adjustment was needed. Recently Issued Accounting Pronouncements not yet adopted In June 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-13, Financial Instruments - Credit Losses , which changes the accounting for recognizing impairments of financial assets. Under the new guidance, credit losses for certain types of financial instruments will be estimated based on expected losses. The new guidance also modifies the impairment models for available-for-sale debt securities and for purchased financial assets with credit deterioration since their origination. This update is effective for annual periods beginning after December 15, 2019, and interim periods within those periods, and early adoption is permitted. The Company believes the adoption will modify the way the Company analyzes financial instruments, but it does not anticipate a material impact on results of operations. The Company is in the process of determining the effects the adoption will have on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820); Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement . This guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted-average of significant unobservable inputs used to develop Level 3 fair value measurements. Certain disclosures required by this guidance must be applied on a retrospective basis and others on a prospective basis. The guidance will be effective for fiscal years beginning after December 15, 2019, although early adoption is permitted. The Company is currently evaluating this guidance to determine the impact, if any, it may have on its consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Concentration Risk | The following table summarizes certain financial data for the customers who accounted for 10.0% or more of sales and accounts receivable. Three Months Ended 2019 2018 Single largest customer:* Revenue 33.1 % 63.1 % Second largest customer: Revenue 14.7 % 1.7 % March 31, 2019 December 31, 2018 Single largest customer:* Accounts receivable 32.2 % — % Second largest customer: Accounts receivable 17.0 % 2.1 % *The Company's largest customer for the three months ended March 31, 2019 and 2018 was its Middle East distributor. There were no other international sales aside from sales to this distributor for the three months ended March 31, 2019 and 2018 . |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis | Assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 are as follows (in thousands): Fair value measurements at reporting date using Balance as of March 31, 2019 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Cash equivalents: Money market funds $ 24,684 $ 24,684 $ — $ — Total assets $ 24,684 $ 24,684 $ — $ — Fair value measurements at reporting date using Balance as of December 31, 2018 Quoted prices in active markets for identical assets (Level 1) Significant other observable inputs (Level 2) Significant unobservable inputs (Level 3) Assets: Cash equivalents: Money market funds $ 21,187 $ 21,187 Short-term investments: U.S. Treasury bonds 2,548 2,548 — — Total assets $ 23,735 $ 23,735 — — |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Computation of Basic and Diluted Net Loss per Share of Common Stock | The following table sets forth the computation of basic and diluted net loss per share of common stock (in thousands, except shares and per share data): Three Months Ended March 31, 2019 2018 Net loss $ (8,290 ) (12,126 ) Weighted-average common shares outstanding, basic and diluted 23,112,582 16,986,656 Net loss per share, basic and diluted $ (0.36 ) $ (0.71 ) |
Schedule of Anti-Dilutive Common Stock Equivalents Excluded from the Calculation of Diluted Net Loss Per Share | The following table sets forth the outstanding potentially dilutive securities determined using the treasury stock method that have been excluded in the calculation of diluted net loss per share because to do so would be anti-dilutive (in common stock equivalent shares): Three Months Ended March 31, 2019 2018 Stock options to purchase common stock 182,184 596,209 Total 182,184 596,209 |
Balance Sheet Details (Tables)
Balance Sheet Details (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Balance Sheet Related Disclosures [Abstract] | |
Schedule of Inventory | Inventory consist of the following (in thousands): March 31, 2019 December 31, 2018 Raw materials $ 1,595 $ 1,090 Work in process 67 288 Finished goods 198 202 Total $ 1,860 $ 1,580 |
Schedule of Other Current Assets | Other current assets consist of the following (in thousands): March 31, 2019 December 31, 2018 Prepaid expenses 1,539 2,329 Interest receivable — 12 Other assets — 121 Total $ 1,539 $ 2,462 |
Schedule of Property and Equipment, Net | Property and equipment, net consist of the following (in thousands): March 31, 2019 December 31, 2018 Computer hardware $ 410 $ 410 Computer software 274 274 Leasehold improvements 405 405 Furniture and fixtures 179 178 Scientific equipment 1,975 1,921 Construction in progress, or CIP 103 530 3,346 3,718 Less: accumulated depreciation (2,124 ) (1,979 ) Total $ 1,222 $ 1,739 |
Schedule of Other Current Liabilities | Other current liabilities consist of the following (in thousands): March 31, 2019 December 31, 2018 Accrued legal and professional fees $ 542 $ 624 Accrued customer incentives 485 467 Accrued sales and other taxes 139 132 Accrued marketing expenses 241 — Other accrued expenses 807 762 Total $ 2,214 $ 1,985 |
Term Loan (Tables)
Term Loan (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Total Long-term Loan and Unamortized Debt Discount | Total long-term loan and unamortized debt discount balances are as follows (in thousands): March 31, 2019 Face value $ 20,000 Less: unamortized debt issuance costs (48 ) Total term loan $ 19,952 Less: current portion of long-term loan (19,952 ) Total long-term loan, excluding current portion $ — |
Schedule of Future Principal Payments Due | As of March 31, 2019 , future principal payments due under the Loan Agreement are as follows (in thousands): Year ended: December 31, 2019 $ 2,778 December 31, 2020 6,666 December 31, 2021 6,666 December 31, 2022 3,890 Total future principal payments due under the Loan Agreement $ 20,000 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-Based Compensation | The Company recorded total non-cash compensation, including non-cash compensation to employees and nonemployees in the condensed consolidated statements of operations and comprehensive loss as follows (in thousands): Three Months Ended March 31, 2019 2018 Cost of revenue $ 39 $ 10 Research and development 219 243 Selling, general and administrative 847 1,136 Total $ 1,105 $ 1,389 |
Summary of Stock Option Transactions | The following table summarizes stock option transactions for the 2016 Equity Incentive Plan for the three months ended March 31, 2019 (in thousands, except shares and per share data): Number of shares Weighted- average exercise price per share Weighted- average remaining contractual life (in years) Aggregate intrinsic value (in thousands) Outstanding at December 31, 2018 3,360,048 $ 5.83 Options granted 819,615 2.28 Options exercised (1,181 ) 0.87 Options canceled (16,952 ) 5.14 Outstanding at March 31, 2019 4,161,530 $ 5.14 7.5 $ 209 Vested and expected to vest at March 31, 2019 3,868,235 $ 5.20 7.5 $ 209 Vested and exercisable at March 31, 2019 1,807,538 $ 6.02 6.6 $ 206 |
Summary of Restricted Stock Awards | The following table summarizes restricted stock award transactions for the 2016 Equity Incentive Plan for the three months ended March 31, 2019 : Number of awards Weighted- average grant date fair value Outstanding at December 31, 2018 611,942 $ 5.89 Awards granted — — Awards released (47,500 ) 7.15 Awards canceled (20,500 ) 6.37 Outstanding at March 31, 2019 543,942 $ 5.76 |
Summary of Restricted Stock Units | The following table summarizes restricted stock unit transactions for the 2016 Equity Incentive Plan for the three months ended March 31, 2019 : Number of shares Weighted-average grant date fair value Aggregate intrinsic value (in thousands) Outstanding at December 31, 2018 — $ — Awards granted 86,957 2.30 Awards released — — Awards canceled — — Outstanding at March 31, 2019 86,957 $ 2.30 $ 125 Vested and expected to vest at March 31, 2019 79,174 $ 2.30 $ 114 |
Stockholder's Equity (Tables)
Stockholder's Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance consists of the following as of March 31, 2019 : Stock options issued and outstanding 4,161,530 Authorized for future option and ongoing vesting of award grants 1,296,667 Authorized for future issuance under ESPP 745,234 Total 6,203,431 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Future Noncancelable Minimum Payment Obligations Under Operating Lease | Future minimum annual lease payments under such leases are as follows as of March 31, 2019 (in thousands): Undiscounted lease payments: Remainder of 2019 $ 349 2020 475 2021 489 2022 116 Total undiscounted lease payments 1,429 Less: imputed interest (145 ) Lease liability 1,284 Less: current portion of lease liability (465 ) Lease liability, less current portion $ 819 |
Organization and Basis of Pre_2
Organization and Basis of Presentation - Additional Information (Detail) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)segment | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | |
Debt Instrument [Line Items] | |||
Number of operating segments | segment | 1 | ||
Revenue | $ 1,775 | $ 1,346 | |
Accumulated deficit | 157,044 | $ 148,754 | |
Cash and cash equivalents | 24,684 | $ 21,187 | |
Loan outstanding | 19,952 | ||
Cash and cash equivalents available for use | 4,700 | ||
Cash minimum before possible default | 20,000 | ||
December 2016 Loan Agreement | |||
Debt Instrument [Line Items] | |||
Loan outstanding | $ 20,000 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Jan. 01, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liability | $ 1,284 | |
Amortization period, less than | 1 year | |
Performance obligation, timing | three to six months | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Operating lease liability | $ 1,300 | |
Lease right-of-use assets | $ 1,200 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Customer Concentration Risk (Details) - Customer Concentration Risk | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
Revenue | Single largest customer: | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 33.10% | 63.10% | |
Revenue | Second largest customer: | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 14.70% | 1.70% | |
Accounts receivable | Single largest customer: | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 32.20% | 0.00% | |
Accounts receivable | Second largest customer: | |||
Concentration Risk [Line Items] | |||
Concentration risk percentage | 17.00% | 2.10% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Assets and Liabilities Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | $ 24,684 | $ 23,735 |
Money market funds | Cash equivalents: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 24,684 | 21,187 |
U.S. Treasury bonds | Short-term investments: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 2,548 | |
Quoted prices in active markets for identical assets (Level 1) | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 24,684 | 23,735 |
Quoted prices in active markets for identical assets (Level 1) | Money market funds | Cash equivalents: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 24,684 | 21,187 |
Quoted prices in active markets for identical assets (Level 1) | U.S. Treasury bonds | Short-term investments: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 2,548 | |
Significant other observable inputs (Level 2) | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Significant other observable inputs (Level 2) | Money market funds | Cash equivalents: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Significant other observable inputs (Level 2) | U.S. Treasury bonds | Short-term investments: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | |
Significant unobservable inputs (Level 3) | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | 0 | 0 |
Significant unobservable inputs (Level 3) | Money market funds | Cash equivalents: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | $ 0 | |
Significant unobservable inputs (Level 3) | U.S. Treasury bonds | Short-term investments: | ||
Fair Value Assets And Liabilities Measured On Recurring Basis [Line Items] | ||
Total assets measured at fair value | $ 0 |
Net Loss per Share - Schedule o
Net Loss per Share - Schedule of Computation of Basic and Diluted Net Loss Per Share of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Net loss | $ (8,290) | $ (12,126) |
Weighted-average common shares outstanding, basic and diluted (in shares) | 23,112,582 | 16,986,656 |
Net loss per share, basic and diluted (in dollars per share) | $ (0.36) | $ (0.71) |
Net Loss per Share - Schedule_2
Net Loss per Share - Schedule of Anti-Dilutive Common Stock Equivalents Excluded from the Calculation of Diluted Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 182,184 | 596,209 |
Stock options to purchase common stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from computation of diluted net loss per share (in shares) | 182,184 | 596,209 |
Balance Sheet Details - Schedul
Balance Sheet Details - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Raw materials | $ 1,595 | $ 1,090 |
Work in process | 67 | 288 |
Finished goods | 198 | 202 |
Total | $ 1,860 | $ 1,580 |
Balance Sheet Details - Sched_2
Balance Sheet Details - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Prepaid expenses | $ 1,539 | $ 2,329 |
Interest receivable | 0 | 12 |
Other assets | 0 | 121 |
Total | $ 1,539 | $ 2,462 |
Balance Sheet Details - Sched_3
Balance Sheet Details - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | $ 3,346 | $ 3,718 | |
Less: accumulated depreciation | (2,124) | (1,979) | |
Total | 1,222 | 1,739 | |
Depreciation expense | 150 | $ 129 | |
Computer hardware | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 410 | 410 | |
Computer software | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 274 | 274 | |
Leasehold improvements | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 405 | 405 | |
Furniture and fixtures | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 179 | 178 | |
Scientific equipment | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | 1,975 | 1,921 | |
Construction in progress, or CIP | |||
Property Plant And Equipment [Line Items] | |||
Property and equipment, gross | $ 103 | $ 530 |
Balance Sheet Details - Sched_4
Balance Sheet Details - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Balance Sheet Related Disclosures [Abstract] | ||
Accrued legal and professional fees | $ 542 | $ 624 |
Accrued customer incentives | 485 | 467 |
Accrued sales and other taxes | 139 | 132 |
Accrued marketing expenses | 241 | 0 |
Other accrued expenses | 807 | 762 |
Total | $ 2,214 | $ 1,985 |
Term Loan - Additional Informat
Term Loan - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Jul. 31, 2018USD ($)tranche | Mar. 31, 2019USD ($)installment | Jun. 30, 2018USD ($) | Jun. 30, 2013USD ($) | |
Debt Instrument [Line Items] | ||||
Loan outstanding | $ 19,952,000 | |||
2013 Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Term loan, maximum borrowings | $ 3,000,000 | |||
December 2016 Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Loan outstanding | $ 20,000,000 | |||
Interest rate | 7.00% | |||
Number of installment payments | installment | 36 | |||
December 2016 Loan Agreement | Prime Rate | ||||
Debt Instrument [Line Items] | ||||
Term loan, variable interest rate | 1.50% | |||
Term loan, fixed interest rate | 5.50% | |||
Minimum | December 2016 Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Term loan, fixed interest rate | 5.00% | |||
Line of Credit | 5th Amendment To The Loan And Security Agreement | ||||
Debt Instrument [Line Items] | ||||
Term loan, maximum borrowings | $ 20,000,000 | |||
Number of tranches | tranche | 2 | |||
Line of Credit | December 2016 Loan Agreement | ||||
Debt Instrument [Line Items] | ||||
Term loan, maximum borrowings | $ 10,000,000 | |||
Line of Credit | 5th Amendment To The Loan And Security Agreement Tranche 1 | ||||
Debt Instrument [Line Items] | ||||
Term loan, maximum borrowings | $ 10,000,000 | |||
Proceeds used for repayment of debt | 10,000,000 | |||
Line of Credit | 5th Amendment To The Loan And Security Agreement Tranche 2 | ||||
Debt Instrument [Line Items] | ||||
Term loan, maximum borrowings | $ 10,000,000 | |||
Proceeds from debt | $ 10,000,000 |
Term Loan - Summary of Total Lo
Term Loan - Summary of Total Long-term Loan and Unamortized Debt Discount (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
Face value | $ 20,000,000 | |
Less: unamortized debt issuance costs | (48,000) | |
Total future principal payments due under the Loan Agreement | 19,952,000 | |
Less: current portion of long-term loan | (19,952,000) | $ (9,930,000) |
Long-term loan, excluding current portion | $ 0 |
Term Loan - Schedule of Future
Term Loan - Schedule of Future Principal Payments Due (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
Total future principal payments due under the Loan Agreement | $ 19,952 |
2016 Loan Agreement | |
Long-term Debt, Fiscal Year Maturity [Abstract] | |
December 31, 2019 | 2,778 |
December 31, 2020 | 6,666 |
December 31, 2021 | 6,666 |
December 31, 2022 | 3,890 |
Total future principal payments due under the Loan Agreement | $ 20,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock shares reserved for issuance | 6,203,431 |
Unrecognized compensation expense | $ | $ 5.7 |
Weighted average compensation cost recognition period | 2 years 1 month 1 day |
2016 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Common stock shares reserved for issuance | 1,296,667 |
Additional shares available for future grant (in shares) | 1,075,902 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 1,105 | $ 1,389 |
Cost of revenue | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 39 | 10 |
Research and development | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | 219 | 243 |
Selling, general and administrative | ||
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items] | ||
Stock-based compensation | $ 847 | $ 1,136 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock Option Transactions (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Number of shares | |
Number of shares outstanding, beginning balance (in shares) | shares | 3,360,048 |
Number of shares, options granted (in shares) | shares | 819,615 |
Number of shares, options exercised (in shares) | shares | (1,181) |
Number of shares, options canceled (in shares) | shares | (16,952) |
Number of shares outstanding, ending balance (in shares) | shares | 4,161,530 |
Number of shares, vested and expected to vest (in shares) | shares | 3,868,235 |
Number of shares, vested and exercisable (in shares) | shares | 1,807,538 |
Weighted- average exercise price per share | |
Weighted average exercise price outstanding, beginning balance (in dollars per share) | $ / shares | $ 5.83 |
Weighted average exercise price, options granted (in dollars per share) | $ / shares | 2.28 |
Weighted average exercise price, options exercised (in dollars per share) | $ / shares | 0.87 |
Weighted average exercise price, options canceled (in dollars per share) | $ / shares | 5.14 |
Weighted average exercise price outstanding, ending balance (in dollars per share) | $ / shares | 5.14 |
Weighted average exercise price, vested and expected to vest (in dollars per share) | $ / shares | 5.20 |
Weighted average exercise price, vested and exercisable (in dollars per share) | $ / shares | $ 6.02 |
Weighted- average remaining contractual life (in years) | |
Weighted average contractual life outstanding, ending balance | 7 years 6 months 8 days |
Weighted average contractual life, vested and expected to vest | 7 years 6 months 6 days |
Weighted average contractual life, vested and exercisable | 6 years 7 months 12 days |
Aggregate intrinsic value (in thousands) | |
Aggregate intrinsic value outstanding, ending balance | $ | $ 209 |
Aggregate intrinsic value, vested and expected to vest | $ | 209 |
Aggregate intrinsic value, vested and exercisable | $ | $ 206 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Restricted Stock Awards (Details) $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($)$ / sharesshares | |
Weighted- average grant date fair value | |
Vested and expected to vest, number of shares (in shares) | shares | 79,174 |
Vested and expected to vest, weighted average grant date fair value (in dollars per share) | $ / shares | $ 2.30 |
Vested and expected to vest, aggregate intrinsic value | $ | $ 114 |
Restricted Stock | |
Number of awards | |
Outstanding, beginning balance (in shares) | shares | 611,942 |
Awards granted (in shares) | shares | 0 |
Awards released (in shares) | shares | (47,500) |
Awards canceled (in shares) | shares | (20,500) |
Outstanding, ending balance (in shares) | shares | 543,942 |
Weighted- average grant date fair value | |
Outstanding balance (in dollars per share) | $ / shares | $ 5.89 |
Awards granted (in dollars per share) | $ / shares | 0 |
Awards released (in dollars per share) | $ / shares | 7.15 |
Awards canceled (in dollars per share) | $ / shares | 6.37 |
Outstanding balance (in dollars per share) | $ / shares | $ 5.76 |
Restricted Stock Units (RSUs) | |
Number of awards | |
Outstanding, beginning balance (in shares) | shares | 0 |
Awards granted (in shares) | shares | 86,957 |
Awards released (in shares) | shares | 0 |
Awards canceled (in shares) | shares | 0 |
Outstanding, ending balance (in shares) | shares | 86,957 |
Weighted- average grant date fair value | |
Outstanding balance (in dollars per share) | $ / shares | $ 0 |
Awards granted (in dollars per share) | $ / shares | 2.30 |
Awards released (in dollars per share) | $ / shares | 0 |
Awards canceled (in dollars per share) | $ / shares | 0 |
Outstanding balance (in dollars per share) | $ / shares | $ 2.30 |
Shares outstanding, aggregate intrinsic value | $ | $ 125 |
Stockholder's Equity - Addition
Stockholder's Equity - Additional Information (Details) | Dec. 27, 2018USD ($)day$ / sharesshares | Mar. 31, 2019USD ($)shares | Dec. 31, 2018shares | Dec. 26, 2018shares |
Subsidiary, Sale of Stock [Line Items] | ||||
Common stock, shares outstanding (in shares) | 24,249,478 | 23,513,292 | 23,285,112 | |
Canaccord Genuity, LLC | Equity Distribution Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold (in shares) | 5,505 | |||
Fees incurred | $ | $ 200,000 | |||
Maximum purchase commitment | $ | $ 10,000,000 | |||
Commission rate | 3.00% | |||
Lincoln Park Capital Fund, LLC | Registration Rights Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Number of shares sold (in shares) | 750,000 | |||
Gross proceeds | $ | $ 1,300,000 | |||
Fees incurred | $ | $ 700,000 | |||
Maximum purchase commitment | $ | $ 20,000,000 | |||
Selling period | 36 months | |||
Maximum purchase amount in a single day | $ | $ 1,000,000 | |||
Maximum number of shares to be issued (in shares) | 4,654,694 | |||
Average share price during consecutive trading days (in dollars per share) | $ / shares | $ 2.244 | |||
Consecutive trading days | day | 5 | |||
Incremental amount (in dollars per share) | $ / shares | $ 0.1157 | |||
Maximum ownership percentage of outstanding shares | 9.99% | |||
$0.50 | Lincoln Park Capital Fund, LLC | Registration Rights Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Closing price, not less than (in dollars per share) | $ / shares | $ 0.50 | |||
Maximum purchase amount in a single day (in shares) | 50,000 | |||
$2.00 | Lincoln Park Capital Fund, LLC | Registration Rights Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Closing price, not less than (in dollars per share) | $ / shares | $ 2 | |||
Maximum purchase amount in a single day (in shares) | 100,000 | |||
$3.00 | Lincoln Park Capital Fund, LLC | Registration Rights Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Closing price, not less than (in dollars per share) | $ / shares | $ 3 | |||
Maximum purchase amount in a single day (in shares) | 125,000 | |||
$4.00 | Lincoln Park Capital Fund, LLC | Registration Rights Agreement | ||||
Subsidiary, Sale of Stock [Line Items] | ||||
Closing price, not less than (in dollars per share) | $ / shares | $ 4 | |||
Maximum purchase amount in a single day (in shares) | 150,000 |
Stockholder's Equity - Schedule
Stockholder's Equity - Schedule of Common Stock Reserved for Future Issuance (Details) | Mar. 31, 2019shares |
Class of Stock [Line Items] | |
Total common stock (in shares) | 6,203,431 |
2016 Equity Incentive Plan | |
Class of Stock [Line Items] | |
Total common stock (in shares) | 1,296,667 |
2016 ESPP | |
Class of Stock [Line Items] | |
Total common stock (in shares) | 745,234 |
Stock options to purchase common stock | |
Class of Stock [Line Items] | |
Total common stock (in shares) | 4,161,530 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Operating lease, discount rate | 7.00% | |
Operating lease, remaining lease term | 3 years | |
Rent expense | $ 0.1 | |
Rent expense | $ 0.1 | |
Operating lease payments | 0.1 | |
Remaining minimum amount committed | $ 1.5 |
Commitments and Contingencies_2
Commitments and Contingencies - Schedule of Future Noncancelable Minimum Payment Obligations Under Operating Lease (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Remainder of 2019 | $ 349 |
2020 | 475 |
2021 | 489 |
2022 | 116 |
Total future payments due under building lease | 1,429 |
Less: imputed interest | (145) |
Lease liability | 1,284 |
Less: current portion of lease liability | (465) |
Lease liability, less current portion | $ 819 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) - Subsequent Event $ in Millions | Apr. 02, 2019employee | May 10, 2019USD ($) | Apr. 30, 2019USD ($) |
Subsequent Event [Line Items] | |||
Number of employees terminated | employee | 49 | ||
Percent of workforce terminated | 50.00% | ||
Termination Benefits | |||
Subsequent Event [Line Items] | |||
Restructuring charges | $ 0.5 | ||
Payments for restructuring | 0.4 | ||
Restructuring reserve | $ 0.1 | ||
Minimum | Termination Benefits | |||
Subsequent Event [Line Items] | |||
Stock-based compensation | $ (0.7) | ||
Maximum | Termination Benefits | |||
Subsequent Event [Line Items] | |||
Stock-based compensation | $ (0.9) |