Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Mar. 11, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Entity Registrant Name | Motus GI Holdings, Inc. | ||
Entity Central Index Key | 0001686850 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --12-31 | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2020 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2020 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Interactive Data Current | Yes | ||
Entity File Number | 001-38389 | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Ex Transition Period | true | ||
Entity Small Business | true | ||
Entity Shell Company | false | ||
Entity Emerging Growth Company | true | ||
Entity Public Float | $ 34,315,900 | ||
Entity Common Stock, Shares Outstanding | 46,748,113 | ||
Entity Incorporation, State or Country Code | DE |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 20,819 | $ 20,528 |
Investments | 8,203 | |
Accounts receivable | 35 | 65 |
Inventory | 805 | 1,014 |
Prepaid expenses and other current assets | 448 | 339 |
Related party receivable | 18 | |
Total current assets | 22,107 | 30,167 |
Fixed assets, net | 1,178 | 1,056 |
Right-of-use assets | 766 | 1,021 |
Other non-current assets | 13 | 13 |
Total assets | 24,064 | 32,257 |
Current liabilities: | ||
Accounts payable and accrued expenses | 2,333 | 2,999 |
Operating lease liabilities - current | 238 | 321 |
Other current liabilities | 60 | 270 |
Term debt, net of debt discount of $21 and $246, respectively | 7,979 | 7,754 |
Total current liabilities | 10,610 | 11,344 |
Contingent royalty obligation | 1,617 | 1,872 |
Operating lease liabilities - non-current | 547 | 713 |
Total liabilities | 12,774 | 13,929 |
Commitments and contingent liabilities (Note 9) | ||
Shareholders' equity | ||
Common Stock $0.0001 par value; 115,000,000 and 50,000,000 shares authorized as of December 31, 2020 and December 31, 2019, respectively; 32,272,309 and 28,811,087 shares issued and outstanding as of December 31, 2020 and December 31, 2019, respectively | 3 | 3 |
Additional paid-in capital | 115,008 | 102,789 |
Accumulated deficit | (103,721) | (84,464) |
Total shareholders' equity | 11,290 | 18,328 |
Total liabilities and shareholders' equity | 24,064 | 32,257 |
Preferred Series A Stock | ||
Shareholders' equity | ||
Preferred Stock $0.0001 par value; 8,000,000 shares authorized; zero shares issued and outstanding |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 8,000,000 | 8,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, shares par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 115,000,000 | 50,000,000 |
Common stock, shares issued | 32,272,309 | 28,811,087 |
Common stock, shares outstanding | 32,272,309 | 28,811,087 |
Term debt, net of debt discount | $ 21 | $ 246 |
Preferred Series A Stock | ||
Preferred stock, shares par value | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||
Revenue | $ 98 | $ 107 |
Operating expenses: | ||
Costs of revenue- sales | 95 | 79 |
Costs of revenue- impairment of inventory | 401 | 57 |
Research and development | 5,555 | 9,013 |
Sales and marketing | 3,532 | 4,897 |
General and administrative | 9,562 | 9,497 |
Total costs and expenses | 19,145 | 23,543 |
Operating loss | (19,047) | (23,436) |
Gain on change in estimated fair value of contingent royalty obligation | 255 | 81 |
Finance income (expense), net | (464) | 273 |
Foreign currency loss | (1) | (4) |
Loss before income taxes | (19,257) | (23,086) |
Net loss | $ (19,257) | $ (23,086) |
Basic and diluted loss per common share | $ (0.60) | $ (0.92) |
Weighted average number of common shares outstanding, basic and diluted | 32,120,017 | 25,133,190 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) $ in Thousands | Common Stock | Additional paid-in capital | Accumulated deficit | Total |
Balance at Dec. 31, 2018 | $ 2 | $ 79,893 | $ (61,378) | $ 18,517 |
Balance, Shares at Dec. 31, 2018 | 21,440,148 | |||
Issuance of common shares upon public offering, net of offering costs | $ 1 | 18,240 | 18,241 | |
Issuance of common shares upon public offering, net of offering costs, Shares | 6,666,667 | |||
Issuance of common shares upon exercise of overallotments, net of offering costs | 1,789 | 1,789 | ||
Issuance of common shares upon exercise of overallotments, net of offering costs, Shares | 648,333 | |||
Issuance of common shares upon exercise of options | 2 | 2 | ||
Issuance of common shares upon exercise of options, Shares | 416 | |||
Issuance of common shares upon vesting of restricted stock units | ||||
Issuance of common shares upon vesting of restricted stock units, Shares | 55,523 | |||
Share based compensation | 2,865 | 2,865 | ||
Net loss | (23,086) | (23,086) | ||
Balance at Dec. 31, 2019 | $ 3 | 102,789 | (84,464) | 18,328 |
Balance, Shares at Dec. 31, 2019 | 28,811,087 | |||
Issuance of common shares upon public offering, net of offering costs | 9,145 | 9,145 | ||
Issuance of common shares upon public offering, net of offering costs, Shares | 3,200,000 | |||
Issuance of common stock upon exercise of warrants | 58 | 58 | ||
Issuance of common stock upon exercise of warrants, Shares | 50,000 | |||
Issuance of common stock for board of directors' compensation | 111 | 111 | ||
Issuance of common stock for board of directors' compensation, Shares | 103,404 | |||
Issuance of common shares upon vesting of restricted stock units | ||||
Issuance of common shares upon vesting of restricted stock units, Shares | 107,818 | |||
Share based compensation | 2,905 | 2,905 | ||
Net loss | (19,257) | (19,257) | ||
Balance at Dec. 31, 2020 | $ 3 | $ 115,008 | $ (103,721) | $ 11,290 |
Balance, Shares at Dec. 31, 2020 | 32,272,309 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Shareholders' Equity (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Stockholders' Equity [Abstract] | ||
Issuance of common shares upon initial public offering, net of offering costs | $ 849 | $ 1,759 |
Issuance of common shares upon exercise of overallotments, offering costs | $ 156 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (19,257) | $ (23,086) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 377 | 223 |
Amortization of debt issuance costs | 25 | 4 |
Gain on change in estimated fair value of contingent royalty obligation | (255) | (81) |
Share based compensation | 2,905 | 3,205 |
Issuance of common stock for board of directors' compensation | 168 | |
Impairment of inventory | 401 | 76 |
Unrealized gain on investments | (5) | |
Impairment of fixed assets | 18 | 35 |
Non-cash operating lease expense | 255 | 220 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 30 | (60) |
Related party receivable | 18 | (18) |
Inventory | (621) | (975) |
Prepaid expenses and other current assets | (109) | 155 |
Accounts payable and accrued expenses | (489) | 629 |
Operating lease liabilities - current and non-current | (249) | (216) |
Other current and non-current liabilities | (210) | (21) |
Net cash used in operating activities | (16,993) | (19,915) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Purchase of fixed assets | (88) | (468) |
Purchase of available-for-sale securities | (9,655) | |
Proceeds from sale of available-for-sale securities | 8,203 | 4,500 |
Net cash provided by (used in) investing activities | 8,115 | (5,623) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Gross proceeds from offering | 9,994 | 20,000 |
Proceeds from exercise of over-allotment options | 1,945 | |
Proceeds from issuance of debt | 8,000 | |
Proceeds from exercise of options | 2 | |
Proceeds from exercise of warrants | 58 | |
Financing fees from equity offering | (849) | (1,931) |
Financing fees from debt | (34) | |
Net cash provided by financing activities | 9,169 | 28,016 |
NET INCREASE IN CASH AND CASH EQUIVALENTS | 291 | 2,478 |
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD | 20,528 | 18,050 |
CASH AND CASH EQUIVALENTS AT END OF PERIOD | 20,819 | 20,528 |
CASH PAID FOR: | ||
Interest | 433 | |
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING AND INVESTING ACTIVITIES: | ||
Financing fees included in accounts payable and accrued expenses | 234 | |
Financing fees extinguished previously included in accounts payable and accrued expenses | 200 | |
Reclassification of inventory to fixed assets | $ 430 |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Note 1 – Description of Business Motus GI Holdings, Inc. (the "Company") was incorporated in Delaware, U.S.A. in September 2016. The Company and its subsidiaries, Motus, Ltd. and Motus, Inc., are collectively referred to as "Motus GI" or the "Company". The Company has developed the Pure-Vu System (the "Pure-Vu System"), a medical device that has received 510(k) clearance from the U.S. Food and Drug Administration (the "FDA"). In June 2019, the 510(k) premarket notification for the second-generation of the Pure-Vu System was reviewed and cleared by the FDA. The second-generation of our Pure-Vu System has received CE Mark approval in the European Economic Area. The Pure-Vu System is indicated to help facilitate the cleaning of a poorly prepared colon during the colonoscopy procedure. The device integrates with standard and slim colonoscopes to enable safe and rapid cleansing during the procedure while preserving established procedural workflow and techniques by irrigating the colon and evacuating the irrigation fluid (water), feces and other bodily fluids and matter. The Company believes that the technology may be useful in the future as a tool to help reduce user dependency on conventional pre-procedural bowel prep regimens. Challenges with bowel preparation for inpatient colonoscopy represent a significant area of unmet need that directly affects clinical outcomes and increases the cost of care for a hospital in a market segment where most of the reimbursement is under a bundle payment based on a Medicare Severity Diagnostic Related Group (a "MS-DRG"). Based on the Company's review and analysis of 2019 market data and 2021 projections for the U.S. and Europe, as obtained from iData Research Inc., we estimate that during 2021 approximately 1.5 million inpatient colonoscopy procedures will be performed in the U.S. and approximately 4.8 million inpatient colonoscopy procedures will be performed worldwide. The Pure-Vu System does not currently have a unique reimbursement code with any private or governmental third-party payors in any country. The Company began commercialization in the fourth quarter of 2019, with the first commercial placements of its second generation Pure-Vu System as part of its initial U.S. market launch targeting early adopter hospitals. The Company does not expect to generate significant revenue from product sales until the COVID-19 pandemic has subsided and it expands its commercialization efforts for the Pure-Vu System, which is subject to significant uncertainty. |
Going Concern
Going Concern | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | Note 2 – Going Concern To date, the Company has generated minimal revenues, experienced negative operating cash flows and has incurred substantial operating losses from its activities. The Company expects operating costs will increase significantly as it incurs costs associated with commercialization activities related to the Pure-Vu System. Management expects the Company to continue to fund its operations primarily through utilization of its current financial resources, future product sales, and through the issuance of debt or equity. Since March 2020, we have been evaluating the actual and potential business impacts related to the COVID-19 pandemic. While the impact of the pandemic continues to evolve, the financial markets have experienced periods of volatility that may adversely impact the Company's ability to enter into, modify, and negotiate favorable terms and conditions relative to equity and debt financing initiatives. The uncertain financial markets, potential disruptions in supply chains, mobility restraints, and changing priorities could also affect the Company's ability to enter into key agreements. The outbreak and government measures taken in response to the pandemic have also had a significant impact, both direct and indirect, on businesses and commerce in general, as worker shortages have occurred; supply chains have been disrupted; facilities and production have been suspended; and demand for certain goods and services, such as certain medical services and supplies, have spiked, while demand for other goods and services have fallen. While not all of these have impacted the Company directly, the future progression of the outbreak and its effects on the Company's business and operations remain uncertain. The Company and its third-party contract manufacturers, contract research organizations, and clinical sites may also face disruptions in procuring items that are essential to the Company's research and development activities, including, for example, medical and laboratory supplies, in each case, that are sourced from abroad or for which there are shortages because of ongoing efforts to address the outbreak. These disruptions have negatively impacted the Company's sales, its results of operations, financial condition, and liquidity in 2020. In December 2019, the Company entered into a Loan and Security Agreement as amended from time to time (the "Loan Agreement"), for $8.0 million with Silicon Valley Bank (the "Bank" or "SVB"). Under the terms of the Loan Agreement the Company must maintain unrestricted cash in accounts held at SVB of at least $10.0 million (the "Liquidity Covenant"). The Company will need to raise additional capital or generate substantial revenue in order to ensure compliance with the Liquidity Covenant to support its development and commercialization efforts. If adequate funds are not available to the Company on a timely basis, or at all, the Company may breach the Liquidity Covenant, in which case, the Company would be required to immediately pledge to the bank and thereafter maintain in a separate account, unrestricted and unencumbered cash in an amount equal to the amount then outstanding under the Loan Agreement. On September 1, 2020 the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") under which the Company sold and issued to an institutional investor (the "Holder"), in a registered direct offering, an aggregate of 3,200,000 shares of the Company's common stock par value $0.0001 per share (the "Common Stock"), and pre-funded warrants to purchase an aggregate of 5,533,625 shares of Common Stock (the "Pre-Funded Warrants"). The offering price was $1.145 for each share of Common Stock and $1.144 for each Pre-Funded Warrant. The Pre-Funded Warrants were immediately exercisable at a price of $0.001 per share of Common Stock. Pursuant to the Securities Purchase Agreement, in a concurrent private placement, the Company also agreed to issue to the Holder warrants to purchase up to 8,733,625 shares of Common Stock (the "Private Placement Warrants"). These warrants were immediately exercisable at an exercise price of $1.30 per share and expire on the fifth anniversary of the date of issuance. In connection with the closing of the offering, the Company received gross proceeds of $10.0 million before deducting placement agent fees and other offering expenses of $0.8 million, from the issuance of the Common Stock, the Pre-Funded Warrants and the Private Placement Warrants. On January 27, 2021, the Company entered into a Warrant Exercise Agreement (the "Exercise Agreement") with the Holder, at which time 8,000,000 of the Private Placement Warrants remained outstanding, due to the prior exercise of 733,625 of the Private Placement Warrants on January 22, 2021. Pursuant to the Exercise Agreement, in order to induce the Holder to exercise all of its remaining outstanding 8,000,000 Private Placement Warrants for cash, the Company agreed to issue to the Holder, new warrants (the "New Warrants") to purchase 0.75 shares of Common Stock for each share of Common Stock issued upon such exercise of the remaining 8,000,000 Private Placement Warrants pursuant to the Exercise Agreement, or an aggregate of 6,000,000 New Warrants. The terms of the New Warrants are substantially similar to those of the Private Placement Warrants, except that the New Warrants will have an exercise price of $2.12, will be immediately exercisable and will expire five years from the date of the Exercise Agreement. In addition, the Holder paid a cash payment of $0.10 for each New Warrant issued to the Holder, for an aggregate of $600,000 to the Company. The Company received aggregate gross proceeds before expenses of approximately $11.0 million from the exercise of all of the remaining 8,000,000 outstanding Private Placement Warrants held by the Holder and the payment of the purchase price for the New Warrants. Management's plan, inclusive of its cost reduction plan (the "2020 Plan") in 2020 (see note 13), includes revenue generation through the sale of products and raising funds from outside investors. However, there is no assurance that such sale of products will occur or that outside funding will be available to the Company, will be obtained on favorable terms or will provide the Company with sufficient capital to meet its objectives. Such conditions, as well as the terms of its Liquidity Covenant and the uncertainty of the impact of the COVID-19 pandemic, raise substantial doubts about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of assets, carrying amounts or the amount and classification of liabilities that may be required should the Company be unable to continue as a going concern. |
Significant Accounting Policies
Significant Accounting Policies and Basis of Presentation | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies and Basis of Presentation | Note 3 – Significant Accounting Policies and Basis of Presentation A summary of the significant accounting policies applied in the preparation of the accompanying consolidated financial statements follows: Basis of presentation and use of estimates The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of the Company and its wholly owned subsidiaries, Motus Ltd., an Israel corporation, which has operations in Tirat Carmel, Israel, and Motus Inc., a Delaware corporation, which has operations in the U.S. All inter-company accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Updates, or ASUs, of the Financial Accounting Standards Board. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Functional currency and foreign currency translation The functional currency of the Company, inclusive of foreign subsidiaries, is the U.S dollar ("dollar") since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. Transactions and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign currencies have been re-measured to dollars in accordance with the provisions of ASC 830-10, "Foreign Currency Translation". All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the consolidated statement of comprehensive loss as foreign currency (loss) gain, as appropriate. Cash and cash equivalents The Company considers all highly liquid investment securities with an original maturity of three months or less to be cash equivalents. Due to the short-term maturity of such investments, the carrying amounts are a reasonable estimate of fair value. Cash and cash equivalents include cash on-hand and highly-rated U.S. government backed money market fund investments. Investments The Company accounts for investments held as "available-for-sale" in accordance with ASC 320, "Investments - Debt and Equity Securities". The Company has one equity investment in a mutual fund and classifies this investment as a current asset and carries it at fair value. Unrealized gains and losses are recorded in finance income (expense), net on the consolidated statement of comprehensive loss. Realized gains or losses on mutual fund transactions are reported in the consolidated statement of comprehensive loss. The mutual fund is maintained at one financial institution. The Company's investment policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities, but the objectives are generally not to generate profits on short-term differences in price. Revenue recognition Sales contracts executed for the second generation Pure-Vu System is accounted for in accordance with ASC Topic 606 - Revenue from Contracts with Customers ("ASC 606") to depict the transfer of control to the Company's customers in an amount reflecting the consideration to which the Company expects to be entitled to. The Pure-Vu System consists of a Workstation (a "Workstation") and single use disposable sleeve (a "Disposable"). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases and collaboration arrangements. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied. Commercial placements of the second generation system include the Workstation, sale of the Disposables, and a service plan. The Workstation is operational without any significant customization and modification and the Disposables are specialized consumables that are readily available for purchase from the Company. Therefore, revenue from the sale of a Workstation is recognized after the customer commits to purchase the Workstation and the Workstation is delivered, which is when title is transferred. Disposables are identified as a separate performance obligation, and therefore, revenue from the sale of Disposables is recognized when the Disposables are delivered to the customer and title is transferred. A free one-year service plan is included with the purchase of any second generation Pure-Vu Workstation. An extended service plan with varying support and maintenance of the Workstation is offered for sale after the free one-year service plan period. In the case of the free one-year service plan, a portion of the Workstation sales price is deferred and recognized ratably over the one-year service plan term based upon the relative standalone value. The standalone selling price of the Workstation is set at the beginning of the contract based on observable prices from standalone sales of the Workstation, however, at times, the Company has offered discounts from that price to certain customers. The standalone sales price of the one year service plan is based on the expected costs of replacement parts and direct costs to perform the service plus a standard margin, as set by the Company. The standard margin assumed is consistent with the margin expected in pricing the extended service plan. Revenue for the extended service plans is recognized ratably over the term of the service plan contract period. At times, the Company may include a limited time free trial to potential customers to evaluate the Workstation for a period of up to 6 months and in certain instances extend the period to an aggregate of up to 11 months. The Company considers the 6-11 month usage period as a non-contiguous limited trial period because the total length of the free trial is still less than one year. In scenarios where the Company continues to provide the Workstation to a customer for a usage period of greater than one year, the arrangement falls outside of the scope of ASC 606, as described below. Management does not collect any upfront payments or deposits prior to commencing a free trial period. No revenue is recognized for the Workstation during the duration of a free trial, however, any Disposables purchased by the evaluator are recognized when delivered, as described above. For contracts outside the scope of ASC 606, the Company determines income for proposed supply arrangements under 1) ASC 842 as it pertains to an embedded lease of the Workstation within a proposed supply arrangement and 2) ASC 606 for the sale of the sleeves within the proposed supply arrangement. The Company allocates the transaction price to the performance obligations within the proposed supply arrangements using the total estimated purchases method for both (i) arrangements that contain minimum purchase commitments and (ii) those arrangements that do not contain a minimum purchase commitment, but instead offer a volume discount for purchases that exceed a specified tier. During the year ended December 31, 2020, the Company recognized revenue of $98, which primarily consisted of revenue from the sales of Disposables. During the year ended December 31, 2019 the Company recognized revenue of $107, which consisted of $46 from the sale of a Workstation and the remaining revenue from the sales of Disposables. Deferred revenue is de minimis at December 31, 2020 and 2019. Lease revenue was de minimis for the years ended December 31, 2020 and 2019. Contract Costs Incremental commissions, if applicable, above a base commission level, are paid to sales representatives upon certain eligible sales, which are paid upon execution of the sales agreement. The guidance within ASC 606 provides a practical expedient if the amortization period of the assets that the entity otherwise would have recognized is one year or less. The Company chose to apply the available practical expedient as the commission paid on eligible sales orders relates to the period in which the sales order was fulfilled. For the years ending December 31, 2020 and 2019, incremental commissions paid on eligible sales orders were $0 and $27, respectively. Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Company makes estimates for the allowance for doubtful accounts based upon its assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect customers' ability to pay. As of December 31, 2020 and 2019, the allowance for doubtful accounts was $0. Inventory Inventory is stated at lower of cost and net realizable value using the weighted average cost method and is evaluated at least annually for impairment. The Company records an inventory reserve for losses associated with dated, expired, excess and obsolete items. Reserves and write-downs of inventory is based on management's current knowledge with respect to inventory levels, planned production, and extension capabilities of materials on hand. A significant change in the timing or level of demand for the Company's products compared to forecasted amounts may result in recording additional charges for excess and obsolete inventory in the future. The Company records charges for excess and obsolete inventory within cost of revenues. Leases Effective January 1, 2019, the Company adopted ASC 842- Leases ("ASC 842"). The lease standard provided a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The lease standard also provides practical expedients for an entity's ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right-of-use ("ROU") assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (facilities). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have financing leases. Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. Certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the right-of-use assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. Fixed assets, net Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated based on the straight-line method, at annual rates reflecting the estimated useful lives of the related assets, as follows: Office equipment 5-15 years Computers and software 3-5 years Machinery 5-10 years Lab and medical equipment 3-7 years Leasehold improvements Shorter of lease term or useful life Share based compensation The Company adopted Accounting Standards Update 2018-07 ("ASU 2018-07"), "Improvement to Nonemployee Share Based Payment Accounting", which expanded the scope of ASC 718 to include share- based payment transactions for acquiring goods and services from nonemployees. The guidance was applied prospectively to all new awards granted after the date of adoption. In addition, the guidance was applied to all existing equity-classified awards for which a measurement date has not been established under ASC 505-50 by the adoption date by remeasuring at fair value as of the adoption date, and recording a cumulative effect adjustment to opening accumulated deficit on January 1, 2019. For the Company's equity-classified awards for which a measurement date has not been established under ASC 505-50, the fair value on January 1, 2019, the adoption date, approximated the value assigned on December 31, 2018, therefore no cumulative adjustment to opening accumulated deficit was required. Under the revised guidance, the accounting for awards issued to non-employees will be similar to the model for employee awards, except that ASU 2018-07: ● allows the Company to elect on an award-by-award basis to use the contractual term as the expected term assumption in the option pricing model, and ● the cost of the grant is recognized in the same period(s) and in the same manner as if the grantor had paid cash. Employee and Non-Employee Share Based Compensation The Company applies ASC 718-10, "Share- Based Payment," which requires the measurement and recognition of compensation expenses for all share based payment awards made to employees and directors including employee stock options under the Company's stock plans and equity awards issued to non-employees based on estimated fair values. ASC 718-10 requires companies to estimate the fair value of equity-based option awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company's consolidated statements of comprehensive loss. The Company recognizes share based award forfeitures as they occur. The Company estimates the fair value of granted option equity awards using a Black-Scholes options pricing model. The option-pricing model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option term (the time from the grant date until the options are exercised or expire). Expected volatility is estimated based on volatility of similar companies in the technology sector. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors using the "simplified" method. Grants to non-employees are based on the contractual term. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company. Restricted Stock Units The Company issues restricted stock units under its 2016 Equity Incentive Plan. The fair value of the restricted stock units is based on the closing stock price on the date of grant and is expensed as operating expense over the period during which the units vest. Each restricted stock unit entitles the grantee to one share of common stock to be received upon vesting up to four years after the grant date. Recipients of restricted stock units have no voting rights until the vesting of the award. Basic and diluted net loss per share Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year. The shares of common stock into which the Pre-Funded Warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date. Diluted loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year, plus the number of common shares that would have been outstanding if all potentially dilutive ordinary shares had been issued, using the treasury stock method, in accordance with ASC 260-10 "Earnings per Share". Potentially dilutive common shares were excluded from the calculation of diluted loss per share for all periods presented due to their anti-dilutive effect due to losses in each period. Research and development expenses Research and development expenses are charged to the consolidated statement of comprehensive loss as incurred. Patent costs Costs incurred in connection with acquiring patent rights and the protection of proprietary technologies are expensed as incurred. Debt issuance costs Debt issuance costs represent the costs associated with the issuance of a debt instrument and are amortized using the effective interest method over the life of the related debt instrument. The Company records debt issuance costs as a debt discount and is a reduction of the carrying amount of the debt liability. Liabilities due to termination of employment agreements Under Israeli employment laws, employees of Motus Ltd. are included under Article 14 of the Severance Compensation Act, 1963 ("Article 14") for a portion of their salaries. According to Article 14, these employees are entitled to monthly deposits made by Motus Ltd. on their behalf with insurance companies. Payments in accordance with Article 14 release Motus Ltd. from any future severance payments (under the Israeli Severance Compensation Act, 1963) with respect of those employees. The aforementioned deposits are not recorded as an asset in the Company's balance sheet, and there is no liability recorded as the Company does not have a future obligation to make any additional payments. Income taxes The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2020 and 2019, the Company had a full valuation allowance against deferred tax assets. The Company is subject to the provisions of ASC 740-10-25, Income Taxes (ASC 740). ASC 740 prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. There are currently no open Federal or State audits. The Company has not recorded any liability for uncertain tax positions at December 31, 2020 or December 31, 2019. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was signed into law to address the COVID-19 crisis. The CARES Act is an approximately $2 trillion emergency economic stimulus package that includes numerous U.S. federal income tax provisions, including various payroll tax incentives and the modification of: (i) net operating loss rules, (ii) the alternative minimum tax refund and (iii) business interest deduction limitations under Section 163(j) of the Internal Revenue Code. The impact of the CARES Act on the Company was not material. For the years ended December 31, 2020 and 2019, the Company recorded zero income tax expense. No tax benefit has been recorded in relation to the pre-tax loss for the years ended December 31, 2020 and 2019, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses. Restructuring charges Restructuring charges are comprised of severance costs related to workforce reductions and other costs directly related to the 2020 Plan, including lease exit and fixed asset impairment. The Company recognizes restructuring charges when the liability is incurred. Employee termination benefits are accrued at the date management has committed to a plan of termination and employees have been notified of their termination dates and expected severance payments, see note 13. Fair value of financial instrument The Company accounts for financial instruments in accordance with ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data; Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. There were no changes in the fair value hierarchy leveling during the years ended December 31, 2020 and 2019. New Accounting Pronouncements- Recently Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-13, "Changes to Disclosure Requirements for Fair Value Measurements", which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. ASU 2018-13 removes, modifies, and adds certain disclosure requirements, and is effective for all entities for fiscal years ending after December 15, 2019. The Company adopted ASU 2018-13 on January 1, 2020. The adoption of ASU 2018-13 did not have a material impact on the Company's financial position or results of operations. In December 2019, the FASB issued ASU 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes", or ASU 2019-12, which is intended to simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard will be effective beginning January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company's financial position or results of operations. New Accounting Pronouncements- Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, "Financial Instruments – Credit Losses" to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, "Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments" and ASU No. 2019-05, "Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief" which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, "Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)," which defers the effective date for public filers that are considered small reporting companies ("SRC") as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company's financial statements and disclosures. |
Investments and Fair Value of F
Investments and Fair Value of Financial Instruments | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Investments and Fair Value of Financial Instruments | Note 4 – Investments and Fair Value of Financial Instruments Investments consist of available-for-sale equity securities, which are carried at fair value. Interest and dividends on investments are included in finance income (expense). As of December 31, 2020, the Company did not have any investments. The following table summarizes, by major security type, the Company’s investments as of December 31, 2019: December 31, 2019 Amortized Carrying Mutual fund, available-for-sale $ 8,198 $ 8,203 Total $ 8,198 $ 8,203 The following table summarizes the fair value of our financial assets and liabilities that were accounted for at fair value on a recurring basis, by level within the fair value hierarchy, as of December 31, 2020 and 2019: December 31, 2020 Level 1 Level 2 Level 3 Fair Value Assets Investments $ - $ - $ - $ - Liabilities Contingent royalty obligation $ - $ - $ 1,617 $ 1,617 December 31, 2019 Level 1 Level 2 Level 3 Fair Value Assets Investments $ 8,203 $ - $ - $ 8,203 Liabilities Contingent royalty obligation $ - $ - $ 1,872 $ 1,872 Financial instruments with carrying values approximating fair value include cash and cash equivalents, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses, and certain other current liabilities, due to their short-term nature. Contingent Royalty Obligation In estimating the fair value of the Company’s contingent royalty obligation (see Note 9), the Company used the discounted cash flow method as of December 31, 2020 and 2019. Based on the fair value hierarchy, the Company classified contingent royalty obligation within Level 3 because valuation inputs are based on projected revenues discounted to a present value. The following table sets forth a summary of changes in the estimated fair value of the Company’s Level 3 contingent royalty obligation for the years ended December 31, 2020 and 2019: Fair Value Measurements of Contingent Royalty Obligation (Level 3) Balance at December 31, 2018 $ 1,953 Change in estimated fair value of contingent royalty obligation (81 ) Balance at December 31, 2019 1,872 Change in estimated fair value of contingent royalty obligation (255 ) Balance at December 31, 2020 $ 1,617 The contingent royalty obligation is re-measured at each balance sheet date using several assumptions, including the following: 1) estimated sales growth, 2) length of product cycle, 3) patent life, 4) discount rate (21% as of December 31, 2020 and 2019), and 5) rate of royalty payment (3% as of December 31, 2020 and 2019). In accordance with ASC-820-10-50-2(g), the Company performed sensitivity analyses of the liability, which was classified as a Level 3 financial instrument. The contingent royalty obligation estimate may be significantly impacted by changes in assumptions used in these analyses. For example, the Company recalculated the fair value of the liability by applying a +/- 2% change to the input variable in the discounted cash flow model; the discount rate. A 2% decrease in the discount rate would increase the liability by approximately $260 and a 2% increase in the discount rate would decrease the liability by approximately $66. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 5 – Inventory Inventory at December 31, 2020 and 2019 consisted of the following: December 31, 2020 2019 Raw materials $ 333 $ 294 Work-in-process 211 124 Finished goods 529 596 Inventory reserve (268 ) - Inventory, net $ 805 $ 1,014 In addition to the inventory reserve shown above, for the years ended December 31, 2020 and 2019, an inventory write-down charge of $133 and $76, respectively, was recorded. |
Fixed assets, Net
Fixed assets, Net | 12 Months Ended |
Dec. 31, 2020 | |
Fixed assets, Net [Abstract] | |
Fixed assets, net | Note 6 – Fixed assets, net Fixed assets, net, consists of the following: December 31, 2020 2019 Office equipment $ 167 $ 148 Computers and software 299 335 Machinery 455 455 Lab and medical equipment 1,039 568 Leasehold improvements 185 180 Total 2,145 1,686 Less accumulated depreciation and amortization (967 ) (630 ) Fixed assets, net $ 1,178 $ 1,056 Depreciation and amortization expense for the years ended December 31, 2020 and 2019 was $377 and $223, respectively. The Company incurred a loss on the impairment of fixed assets in the amount of $18 and $35 for the years end December 31, 2020 and 2019, respectively. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | Note 7 – Leases The Company leases an office in Fort Lauderdale, Florida under an operating lease. The term expires November 2024. The annual base rent is subject to annual increases of 2.75%. As described within Note 10, the Company shares this space with a related party pursuant to the Shared Space Agreement, as defined below. The Company leases an office in Israel under an operating lease. The term expires on December 31, 2022. The annual base rent is subject to increases of 4%. The Company leases vehicles under operating leases that expire at various dates through 2022. Many of these leases provide for payment by the Company, as the lessee, of taxes, insurance premiums, costs of maintenance and other costs which are expensed as incurred. Certain operating leases include escalation clauses and some of which may include options to extend the leases for up to 3 years. An initial right-of-use asset of $1,065 was recognized as a non-cash asset and operating lease liabilities of $1,074 was recognized as a non-cash liability. An initial right-of-use asset and operating lease liability in the amount of $176 was recognized as a non-cash asset and liability upon the exercise of its option to extend the Israel lease. The components of lease cost and supplemental balance sheet information for the Company's lease portfolio were as follows: Year Ended December 31, 2020 2019 Lease Cost Operating lease cost, net of related party license fee $ 176 $ 298 Variable lease cost 118 99 Total lease cost $ 294 $ 397 As of December 31, 2020 2019 Assets Operating lease, right-of-use- asset $ 766 $ 1,021 Liabilities Current Operating lease liabilities $ 238 $ 321 Non-current Operating lease liabilities, net of current portion 547 713 Total lease liabilities $ 785 $ 1,034 Other information: Weighted average remaining lease term - operating leases 3.33 years 4.10 years Weighted-average discount rate - operating leases 7.78 % 7.67 % The Company records operating lease payments to lease expense using the straight-line method. The Company's lease expense was $294 and $397 for the years ended December 31, 2020 and 2019, respectively, included in general and administrative expenses which is net of the related party license fee of $172 and $18 for the years ended December 31, 2020 and 2019, respectively (see Note 10). Future minimum lease payments under non-cancellable operating leases as of December 31, 2020 were as follows: Year Ended December 31, Amount 2021 $ 287 2022 273 2023 184 2024 141 Total future minimum lease payments 885 Imputed interest (100 ) Total liability $ 785 The following table summarizes the cash paid for amounts included in the measurement of lease liabilities for the years ended December 31, 2020 and 2019: Years Ended December 31, 2020 2019 Cash paid for amounts included in measurement of lease liabilities: $ (335 ) $ (346 |
Term Debt
Term Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Term Debt | Note 8 – Term Debt On December 13, 2019 (the "Effective Date"), the Company entered into a Loan and Security Agreement (the "Loan Agreement") for $8,000 (the "Term Debt") with Silicon Valley Bank (the "Bank" or "SVB"). On April 10, 2020, the Company entered into a Deferral Agreement (the "Deferral Agreement") with SVB, effective April 2, 2020, which amends certain provisions of the Loan and Security Agreement, between the Company and SVB. Pursuant to and among other changes effected by, the Deferral Agreement, as of April 2, 2020, the originally scheduled period of monthly interest-only payments under the Loan Agreement, and the originally scheduled maturity date of the Loan Agreement, have each been extended by six months. As a result, pursuant to the Deferral Agreement, the Loan Agreement now provides for monthly interest-only payments through June 30, 2022, followed by monthly payments of principal and interest until June 1, 2024. The Term Debt of $8,000 bears an interest rate equal to the greater of (i) one-half of one percent (0.50%) above the Prime Rate and (ii) five and one-half percent (5.50%). At December 31, 2020, the interest rate was 5.69%. The Term Debt is collateralized by substantially all assets of the Company. Additionally, the Company has pledged 65% of the outstanding capital stock in the Company's foreign subsidiary, Motus GI Medical Technologies, Ltd., to collateralize the Term Debt. Interest payments have commenced on January 1, 2020, following each month until the maturity date. Principal payments will commence July 1, 2022 and continuing for 24 consecutive months thereafter. The Company may prepay all, but not less than all, of the outstanding principal balance of the Term Debt subject to prepayment premium of $240, plus all other sums, if any, that shall have become due and payable. The Company incurred $50 of debt issuance costs related to the Term Debt. For the years ended December 31, 2020 and 2019, $25 and $4 of debt issuance costs was amortized to interest expense, respectively, using the effective interest method. The effective interest rate on the Term Debt for the years ended December 31, 2020 and 2019 was 5.69% and 6.73%, respectively. The Company accounts for its bank indebtedness at amortized cost. Further, under the terms of the agreement, the Company must maintain unrestricted cash in accounts with the Bank of at least $10,000. The covenant was met by the Company as of December 31, 2020. The Company's cash forecast indicates that it will need to raise additional funds during 2021, which is part of the current operating plan, in order to meet this liquidity requirement covenant during the coming year. The Term Debt includes a subjective acceleration clause. Since March 2020, the Company has been evaluating the actual and potential business impacts related to the COVID-19 pandemic. In response to the pandemic, certain measures were taken by authorities that could result in adverse financial impacts to the Company, including requiring Company workers to stay home. The Company considered the probability of a further slow-down of its sales team and the related impact on the potential to trigger the Liquidity Covenant, along with the volatility of the capital markets, which could cause SVB to exercise the subjective acceleration clause in determining the classification of the Company's Term Debt. When considering these factors, the Company determined the likelihood of acceleration could be probable as the pandemic continues, and therefore the Company has classified the Term Debt in current liabilities. Future maturities of the Term Debt are as follows: Years Ending December 31, Amount 2021 $ - 2022 2,000 2023 4,000 2024 2,000 Total 8,000 Less unamortized debt issuance costs (21 ) Total Term Debt, less debt issuance costs $ 7,979 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 9 – Commitments and Contingencies Royalties to the IIA The Company has received grants from the Government of the State of Israel through the Israeli National Authority for Technical Innovation (the "IIA") for the financing of a portion of its research and development expenditures. The total amount that was received and recorded between the periods ending December 31, 2011 through 2016 was $1,332. No amounts were received during the years December 31, 2020 and 2019. The Company has a contingent obligation to the IIA for the total amount received along with the accumulated LIBOR interest to date in the amount of $1,407 and $1,396 as of December 31, 2020 and 2019, respectively. This obligation is repaid in the form of royalties on revenues generated in any fashion with a rate that is currently at 4% (which may be increased under certain circumstances). The Company may be obligated to pay up to 100% (which may be increased under certain circumstances) of the U.S. dollar-linked value of the grants received, plus interest at the rate of 12-month LIBOR. Repayment of the grants is contingent upon the successful completion of the Company's R&D programs and generating sales. The Company has no obligation to repay these grants if the R&D program fails, is unsuccessful, or aborted, or if no sales are generated. The Company has recorded an immaterial expense for the years ended December 31, 2020 and 2019, and an immaterial liability at December 31, 2020 and 2019. Royalty Payment Rights on Royalty Payment Rights Certificates The Company filed a Certificate of Designation of Preferences, Rights and Limitations (the "Certificate of Designation"), establishing the rights and preferences of the holders of the Series A Convertible Preferred Stock, including certain directors and officers of the Company (the "Royalty Payment Rights"). As set forth in the Certificate of Designation, the Royalty Payment Rights initially entitled the holders in aggregate, to a royalty in an amount of: ● 3% of net sales subject to a maximum in any calendar year equal to the total dollar amount of Units closed on in the Company's 2017 private placement (the "2017 Private Placement"); and ● 5% of licensing proceeds subject to a maximum in any calendar year equal to the total dollar amount of Units closed on in the 2017 Private Placement. In addition, in connection with completion of the 2017 Private Placement, the Company issued the placement agent royalty payment rights certificates (the "Placement Agent Royalty Payment Rights Certificates") which grants the placement agent, and its designees, the right to receive, in the aggregate, 10% of the amount of payments paid to the holders of the Series A Convertible Preferred Stock, or the holders of the Royalty Payment Rights Certificates (the "Royalty Payment Rights Certificates"), upon the conversion of the Series A Convertible Preferred Stock into shares of the Company's common stock. The Placement Agent Royalty Payment Rights Certificates are on substantially similar terms as the Royalty Payment Rights of the Series A Convertible Preferred Stock. The Royalty Payment Rights Certificate obligation and Placement Agent Royalty Payment Rights Certificate obligation (the "Contingent Royalty Obligation") was recorded as a liability at fair value as "Contingent royalty obligation" in the consolidated balance sheets at December 31, 2020 and 2019 (see Contingent Royalty Obligation below). The fair value at inception was allocated to the royalty rights and the residual value was allocated to the preferred shares and recorded as equity. The Company amended its Certificate of Designation to modify the Royalty Payment Rights when the Company consummated its Initial Public Offering ("IPO") on February 16, 2018, at which time the Company converted the Series A Convertible Preferred Stock into shares of the Company's common stock and issued the Royalty Payment Rights Certificates. Pursuant to the terms of the Royalty Payment Rights Certificates, if and when the Company generates sales of the current and potential future versions of the Pure-Vu System, including disposables, parts, and services, or if the Company receives any proceeds from the licensing of the current and potential future versions of the Pure-Vu System, then the Company will pay to the holders of the Royalty Payment Rights Certificates a royalty (the "Royalty Amount") equal to, in the aggregate, in royalty payments in any calendar year for all products: ● 3% of Net Sales* for commercialized product directly; and ● 5% of any Licensing Proceeds** for rights to commercialize the product if sublicensed by the Company to a third-party. * Notwithstanding the foregoing, with respect to Net Sales based Royalty Amounts, (a) no Net Sales based Royalty Amount shall begin to accrue or become payable until the Company has first generated, in the aggregate, since its inception, Net Sales equal to $20,000 (the "Initial Net Sales Milestone"), and royalties shall only be computed on, and due with respect to, Net Sales generated in excess of the Initial Net Sales Milestone, and (b) the total Net Sales based Royalty Amount due and payable in any calendar year shall be subject to a royalty cap amount per calendar year of $30,000. "Net Sales" is defined in the Royalty Payment Rights Certificates. The Company has not reached the Initial Net Sales Milestone as of December 31, 2020. ** Notwithstanding the foregoing, with respect to Licensing Proceeds based Royalty Amounts, (a) no Licensing Proceeds based Royalty Amount shall begin to accrue or become payable until the Company has first generated, in the aggregate, since its inception, Licensing Proceeds equal to $3,500 (the "Initial Licensing Proceeds Milestone"), and royalties shall only be computed on, and due with respect to, Licensing Proceeds in excess of the Initial Licensing Proceeds Milestone and (b) the total Licensing Proceeds based Royalty Amount due and payable in any calendar year shall be subject to a royalty cap amount per calendar year of $30,000. "Licensing" Proceeds is defined in the Certificate. The Company has not reached the Initial Licensing Proceeds Milestone as of December 31, 2020. The Royalty Amount will be payable up to the later of (i) the latest expiration date of the Company's patents issued as of December 22, 2016, or (ii) the latest expiration date of any pending patents as of December 22, 2016 that have since been issued or may be issued in the future (which is currently May 2036). Following the expiration of all such patents, the holders of the Royalty Payment Rights Certificates and the holders of the Placement Agent Royalty Payment Rights Certificates will no longer be entitled to any further royalties for any period following the latest to occur of such patent expiration. On February 16, 2018, the date of the closing of the IPO, (1) the amendment to the Certificate of Designation became effective, (2) all outstanding shares of Series A Convertible Preferred Stock were converted into shares of the Company's common stock pursuant to a mandatory conversion, and (3) the Royalty Payment Rights Certificates were issued to the former holders of the Series A Convertible Preferred Stock. Contingent Royalty Obligation The Contingent Royalty Obligation was recorded as a non-current liability at fair value in the consolidated balance sheets at December 31, 2020 and 2019 in the amount of $1,617 and $1,872, respectively. A gain on change in fair value of Contingent Royalty Obligation of $255 and $81 was recorded for the years ended December 31, 2020 and 2019, respectively. Other Commitments and Contingencies The Company has a severance contingency for severance payments to its CEO, COO, and CFO in the aggregate of approximately $1,319, in the event that they are terminated without cause or leave due to good reason, as outlined in their employee agreements. Management estimates that the likelihood of payment is remote; therefore, no liability was reflected in these consolidated financial statements. Any serious disruption with the Company's operations due to the COVID-19 outbreak could impair the Company's ability to generate sufficient cash to repay its debt obligations when they become due and payable, either when they mature, or in the event of a default, which will cause the Company to breach its covenants and may negatively impact the Company's business operations, financial condition, and results of operations. The Company is unable to predict the outcome of these matters and is unable to make a meaningful estimate of the amount or range of loss, if any, that could result from an unfavorable outcome. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 10 – Related Party Transactions Shared Space Agreement In January 2020, the Company entered into a license agreement (the “Shared Space Agreement”) with Orchestra BioMed, Inc., formerly a greater than 5% holder of the Company’s common stock and entity in which David Hochman, the Chairman of the Company’s board of directors, serves as the Chairman of the board of directors and Chief Executive Officer, and Darren Sherman, a member of the Company’s board of directors, serves as a director and as President and Chief Operating Officer. During the year ended December 31, 2020 and 2019, the Company recorded license fee of $172 and $18, respectively, in relation to the Shared Space Agreement. This amount is netted with rent expense in general and administrative expenses. Orchestra BioMed, Inc. will continue to pay a monthly license fee based on the shared space to the Company until the expiration of the Shared Space Agreement in September 2024. Aggregate license fees will range from $162 to $198 in any given calendar year during the term of the Shared Space Agreement. |
Stock- based compensation
Stock- based compensation | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stock- based compensation | Note 11 – Stock- based compensation Issuance of Common Stock Non-employee members of the Board of Directors were granted an aggregate of 103,404 shares of Common Stock as compensation, in lieu $111 of cash compensation, for service as directors during the year ended December 31, 2020. The Company recorded $56 in accrued expenses as of December 30, 2020, in relation to the service as directors for the three months ended December 31, 2020. On January 13, 2021, the non-employee members of the Board of Directors were granted an aggregate of 52,317 shares of Common Stock as compensation, in lieu of cash compensation, for service as directors during the fourth quarter of 2020, pursuant to the Company's non-employee director compensation policy. The number of shares granted to the Company's directors, in lieu of cash compensation, is determined by the dollar amount of quarterly fees due under the non-employee director compensation policy divided by the fair market value of a share of Common Stock as of the grant date. On September 1, 2020 the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") under which it sold and issued to an institutional investor (the "Holder"), in a registered direct offering, an aggregate of 3,200,000 shares of the Company's common stock par value $0.0001 per share (the "Common Stock"), and pre-funded warrants to purchase an aggregate of 5,533,625 shares of Common Stock (the "Pre-Funded Warrants"). The offering price was $1.145 for each share of Common Stock and $1.144 for each Pre-Funded Warrant. The Pre-Funded Warrants were immediately exercisable at a price of $0.001 per share of Common Stock. The shares of common stock into which the Pre-Funded Warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date. Pursuant to the Securities Purchase Agreement, in a concurrent private placement, the Company has also agreed to issue to the purchaser warrants to purchase up to 8,733,625 shares of Common Stock (the "Private Placement Warrants"). These warrants were immediately exercisable at an exercise price of $1.30 per share and expire on the fifth anniversary of the date of issuance. In connection with the closing of the offering, the Company received gross proceeds of $9,994 before deducting placement agent fees and other offering expenses of $849, from the issuance of the Common Stock, the Pre-Funded Warrants and the Private Placement Warrants. Issuance of Warrants to Purchase Common Stock On January 1, 2019, the Company entered into an amended and restated consultant agreement to restate and replace the existing consultant agreement dated October 1, 2018 with a service provider which shall continue until September 30, 2019, unless and until sooner terminated by the Company or service provider by providing at least thirty days prior written notice. Pursuant to the agreement, the Company issued a fully-vested and nonforfeitable warrant on February 13, 2019 to purchase 50,000 shares of the Company's common stock, with an exercise price of $5.00 per share, and expires March 20, 2022. The Company recorded $90 as general and administrative expense in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2019. On February 13, 2019, the Company issued to an existing service provider for past services rendered a fully-vested and nonforfeitable warrant to purchase 30,000 shares of the Company's common stock, with an exercise price of $5.00 per share, and expires March 20, 2022. The Company recorded $55 as general and administrative expense in the accompanying consolidated statement of comprehensive loss for the year ended December 31, 2019. On February 6, 2020, the Company entered into a services agreement whereby it agreed to issue warrants to purchase 120,000 shares of common stock of the Company. The warrants will vest over a one-year period on a monthly basis and expire three years from the date of issuance. 60,000 of the granted warrants are exercisable at a price equal to $2.16 per share of common stock and 60,000 of the remaining warrants granted are exercisable at a price equal to $3.50 per share of common stock. The fair value of the warrants were valued on the date of grant at $112 using the Black-Scholes option-pricing model with the following parameters: (1) risk-free interest rate of 1.43%; (2) expected life in years of 3.0; (3) expected stock volatility of 74.82%; and (4) expected dividend yield of 0%. The Company recorded $102 as general and administrative expense in the accompanying consolidated statement of comprehensive loss in relation to the consulting agreement for the year ended December 31, 2020. On June 11, 2020, the Company entered into a services agreement whereby it agreed to issue warrants to purchase 50,000 shares of common stock of the Company which vested immediately. The warrants are exercisable at $1.17 per share and expire three years from the date of issuance. The fair value of the warrants were valued on the date of grant at $28 using the Black-Scholes option-pricing model with the following parameters: (1) risk-free interest rate of 0.22%; (2) expected life in years of 3.0; (3) expected stock volatility of 73.06%; and (4) expected dividend yield of 0%. The Company recorded $28 as general and administrative expense in the accompanying consolidated statement of comprehensive loss in relation to the consulting agreement for the year ended December 31, 2020. On July 10, 2020 and August 3, 2020, the Company issued an aggregate of 50,000 shares of common stock upon exercise of the warrant which resulted in aggregate proceeds of approximately $59. In connection with the Securities Purchase Agreement, as described above, the Company issued the Pre-Funded Warrants to purchase up to 5,533,625 shares of its common stock with the aggregate exercise price already being pre-funded to the Company on September 1, 2020 and, consequently, no additional consideration other than the nominal exercise price of $0.001 per warrant share shall be required to be paid to effect any exercise of the Pre-Funded Warrants. The Pre-Funded Warrants will be exercisable until it is exercised in full. Pursuant to the Securities Purchase Agreement, on September 1, 2020, the Company also issued the Private Placement Warrants to purchase 8,733,625 of its common stock at an exercise price of $1.30 per share that expires on September 1, 2025. The terms of both warrants include certain provisions related to fundamental transactions, a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions. Therefore, the warrants have been classified as equity upon issuance. As of February 16, 2021, the Pre-Funded Warrants for 5,533,625 shares of common stock and the Private Placement Warrants for 8,733,625 shares of common stock have been exercised. Warrants A summary of the Company's warrants to purchase common stock activity is as follows: Shares Underlying Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at January 1, 2019 2,629,468 $ 5.24 3.58 $ - Granted 141,333 5.62 Forfeited (25,000 ) 7.39 Outstanding at December 31, 2019 2,745,801 5.24 2.58 $ - Granted 14,437,250 1.25 Exercised (50,000 ) 1.17 * Forfeited (75,000 ) 8.71 Outstanding and exercisable at December 31, 2020 17,058,051 $ 1.86 5.78 $ - * represents amount less than $1,000 As of December 31, 2020 17,048,051 shares of the Company's common stock were issuable upon exercise of outstanding warrants. Stock Options 2016 Equity Incentive Plan In December 2016, the Company adopted the Motus GI Holdings, Inc. 2016 Equity Incentive Plan (the "2016 Plan"). Pursuant to the 2016 Plan, the Company's board of directors may grant options to purchase shares of the Company's common stock, stock appreciation rights, restricted stock, stock units, performance shares, performance units, incentive bonus awards, other cash-based awards and other stock-based awards to employees, officers, directors, consultants and advisors. Pursuant to the terms of an annual evergreen provision in the 2016 Plan, the number of shares of common stock available for issuance under the 2016 Plan shall increase annually by six percent (6%) of the total number of shares of common stock outstanding on December 31st of the preceding calendar year; provided, however, that the board of directors may act prior to the first day of any calendar year to provide that there shall be no increase such calendar year, or that the increase shall be a lesser number of shares of our common stock than would otherwise occur. On January 1, 2021, pursuant to an annual evergreen provision, the number of shares of common stock reserved for future grants was increased by 1,936,339 shares. Under the 2016 Plan, effective as of January 1, 2021, the maximum number of shares of the Company's common stock authorized for issuance is 7,592,663. As of December 31, 2020, there were 387 shares of common stock available for future grant under the 2016 Plan. A summary of the Company's stock option activity is as follows: Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at January 1, 2019 2,520,101 $ 4.32 8.72 $ - Granted 1,242,144 4.02 Exercised (416 ) 3.78 * Forfeited (242,060 ) 4.24 Outstanding at December 31, 2019 3,519,769 4.22 7.91 - Granted 2,650,666 1.46 Forfeited (1,141,316 ) 3.17 Outstanding at December 31, 2020 5,029,119 $ 3.00 7.96 $ - * represents amount less than $1,000 The options granted during the years ended December 31, 2020 and 2019 were valued using the Black-Scholes option pricing model using the following weighted average assumptions: For the year ended December 31, 2020 2019 Expected term, in years 5.6 5.8 Expected volatility 82.70 % 72.89 % Risk-free interest rate 0.86 % 2.34 % Dividend yield - - Grant date fair value $ 1.83 $ 2.58 As of December 31, 2020, unamortized share based compensation for stock options was $2,131, with a weighted-average recognition period of 0.81 years. As of December 31, 2020, outstanding options to purchase 2,537,941 shares of common stock were exercisable with a weighted-average exercise price per share of $4.18. For the years ended December 31, 2020 and 2019, the Company recorded $2,299 and $2,393, respectively, for share based compensation expense related to stock options. Restricted Stock Units The Company recorded $476 and $280 as general and administrative expense in the accompanying consolidated statements of comprehensive loss for the years ended December 31, 2020 and 2019, respectively, in relation to the aggregate 501,265 restricted stock units issued to date to the executives and directors. A summary of the Company's restricted stock unit awards activity is as follows: Number of Shares Aggregate Nonvested at January 1, 2019 165,000 $ 4.91 Granted 76,112 4.32 Vested (55,523 ) 4.76 Nonvested at December 31, 2019 185,589 $ 4.71 Granted 260,154 2.16 Vested (107,818 ) 3.59 Nonvested at December 31, 2020 337,925 $ 3.10 At December 31, 2020, unamortized stock compensation for restricted stock units was $897, with a weighted-average recognition period of 1.08 years. Stock- based Compensation The following table sets forth total non-cash share based compensation for the issuance of common stock, options to purchase common stock, warrants to purchase common stock, and restricted stock unit awards by operating statement classification for the years ended December 31, 2020 and 2019: December 31, 2020 2019 Research and development $ 588 $ 697 Sales and marketing 340 325 General and administrative 1,977 2,183 Total $ 2,905 $ 3,205 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12 – Income Taxes Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company's deferred tax assets relate primarily to its net operating loss carryforwards and other balance sheet basis differences. In accordance with ASC 740, "Income Taxes," the Company recorded a valuation allowance to fully offset the gross deferred tax asset, because it is not more likely than not that the Company will realize future benefits associated with these deferred tax assets at December 31, 2020 and 2019. As of December 31, 2020 and 2019, the Company had deferred tax assets of $22.3 million and $17.3 million, respectively, against which a full valuation allowance of $22.3 million and $17.3 million, respectively, had been recorded. The change in the valuation allowance for the year ended December 31, 2020 was an increase of $5.0 million. The increase in the valuation allowance for the year ended December 31, 2020 was mainly attributable to increases in net operating losses and non-deductible share based compensation, which resulted in an increase in the deferred tax assets with a corresponding valuation allowance. Significant components of the Company's deferred tax assets at December 31, 2020 and 2019 were as follows: December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards – Federal and state $ 3,371 $ 2,183 Net operating loss carryforwards – Israel 16,323 12,680 Share based compensation 1,268 1,004 Capitalized research and development 734 731 Accrued liabilities and reserves 743 841 Total deferred tax assets 22,439 17,439 Deferred tax liabilities: Right of use asset (132 ) (168 ) Other (16 ) (5 ) Total deferred tax liabilities (148 ) (173 ) Net deferred tax assets before valuation allowance 22,291 17,266 Valuation allowance (22,291 ) (17,266 ) Net deferred tax assets after valuation allowance $ - $ - A reconciliation of the federal statutory tax rate and the effective tax rates for the years ended December 31, 2020 and 2019 is as follows: For the Year Ended December 31, 2020 2019 U.S. federal statutory tax rate 21.0 % 21.0 % State income taxes, net of federal benefit 4.2 0.9 U.S. vs. foreign tax rate differential 1.5 1.7 Non-deductible expenses (0.6 ) (1.4 ) Change in valuation allowance (26.1 ) (22.2 ) Effective tax rate - % - % The Company had approximately $91.0 million and $71.0 million of gross net operating loss ("NOL") carryforwards (federal, state and Israel) as of December 31, 2020 and 2019, respectively. Sections 382 and 383 of the Internal Revenue Code, and similar state regulations, contain provisions that may limit the NOL carryforwards available to be used to offset income in any given year upon the occurrence of certain events, including changes in the ownership interests of significant stockholders. In the event of a cumulative change in ownership in excess of 50% over a three-year period, the amount of the NOL carryforwards that the Company may utilize in any one year may be limited. A reconciliation of the Company's NOLs for the years ended December 31, 2020 and 2019 is as follows: December 31, 2020 2019 U.S. Federal NOL's $ 10,724 $ 8,630 U.S. State NOL's 9,314 7,219 Israel NOL's 70,971 55,132 Total NOL's $ 91,009 $ 70,981 The Company's federal and state NOL's of $3.3 million and $9.3 million, respectively, begin to expire after 2036 through 2040. The Company's federal NOL of $7.4 million, generated since 2018, and the Israel NOL of $71.0 million do not expire. A check the box election for Israel was made and accepted by the IRS as of January 1st, 2019. As such, approximately $21.2 million of Israeli NOLs are available for use in the U.S and have an indefinite life. The Company follows guidance on accounting for uncertainty in income taxes which prescribes a minimum threshold a tax position is required to meet before being recognized in the financial statements. The Company does not have any liabilities as of December 31, 2020 and 2019 to account for potential income tax exposure. The Company is obligated to file income tax returns in the U.S. federal jurisdiction, several U.S. States and Israel. Since the Company had losses in the past, all prior years that generated net operating loss carry-forwards are open and subject to audit examination in relation to the net operating loss generated from those years. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act, or the CARES Act, was enacted in the United States, the impact of which was not material. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Note 13 – Restructuring In March 2020, the Company adopted the 2020 Plan in response to the ongoing disruptions from the COVID-19 outbreak, and to better align its cost structure with the resources required to more efficiently and effectively execute on its commercial strategy of creating a strong foundation in the market by establishing national and regional hospital networks as Pure Vu reference centers. Most significantly, the 2020 Plan resulted in the reduction of the Company’s overall headcount by approximately 50%, including a significant reduction of the Company’s commercial team in the US, the implementation of tighter expense controls, and the termination of the lease of the Company’s planned corporate office facility in Norwood, Massachusetts. During the year ended December 31, 2020 the Company recorded charges of $624 related to the 2020 Plan, of which $445 were related to employee severance and other benefits included in sales and marketing expense and research and developments expense in the statement of comprehensive loss and $179 were related to lease termination and fixed asset impairments included in general and administrative expenses in the statement of comprehensive loss. There are no remaining unpaid liabilities related to restructuring charges as of December 31, 2020. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 – Subsequent Events On January 27, 2021, the Company entered into a Warrant Exercise Agreement (the "Exercise Agreement") with the Holder, at which time 8,000,000 of the Private Placement Warrants remained outstanding, due to the prior exercise of 733,625 of the Private Placement Warrants on January 22, 2021. Pursuant to the Exercise Agreement, in order to induce the Holder to exercise all of its remaining outstanding 8,000,000 Private Placement Warrants for cash, the Company agreed to issue to the Holder, new warrants (the "New Warrants") to purchase 0.75 shares of Common Stock for each share of Common Stock issued upon such exercise of the remaining 8,000,000 Private Placement Warrants pursuant to the Exercise Agreement, or an aggregate of 6,000,000 New Warrants. The terms of the New Warrants are substantially similar to those of the Private Placement Warrants, except that the New Warrants will have an exercise price of $2.12, will be immediately exercisable and will expire five years from the date of the Exercise Agreement. In addition, the Holder paid a cash payment of $0.10 for each New Warrant issued to the Holder, for an aggregate of $600,000 to the Company. The Company received aggregate gross proceeds before expenses of approximately $11.0 million from the exercise of all of the remaining 8,000,000 outstanding Private Placement Warrants held by the Holder and the payment of the purchase price for the New Warrants. In connection with the Exercise Agreement, the Company entered into a financial advisory agreement (the "Letter Agreement") with A.G.P./Alliance Global Partners ("A.G.P."), pursuant to which A.G.P. acted as exclusive financial advisor to the Company in this transaction and received a cash fee of $300,000 upon full cash exercise of the Private Placement Warrants. As additional compensation, A.G.P. will receive a cash fee equal to $200,000 upon the cash exercise in full of the New Warrants. On January 20, 2021, the Company entered into a services agreement with a service provider whereby it agreed to issue warrants to purchase an aggregate 340,020 shares of common stock of the Company with an exercise price equal to $1.75 per share of common stock, which will vest over a one-year period on a monthly basis and will have an exercise period of three years from the date of issuance. On February 17, 2021, the Company's Compensation Committee approved the issuance of 949,500 options, in the aggregate, to executives and employees which vest over a three-year period on a quarterly basis to purchase shares of the Company's common stock with an exercise price equal to $1.78 per share of common stock. On February 17, 2021, the Company's Compensation Committee approved the issuance of 160,000 restricted stock unit awards to non-employee directors which vest on the first anniversary of the date of grant, and 266,000 restricted stock unit awards, to executives which vest over a three-year period on a quarterly basis. On February 17, 2021, the Company's Compensation Committee approved the issuance of 160,000 options, in the aggregate, to non-employee directors which vest on the first anniversary of the date of grant to purchase shares of the Company's common stock with an exercise price equal to $1.78 per share of common stock. On February 17, 2021, the Company's Compensation Committee approved a modification to the non-employee director compensation policy to permit payment of the fees for service as directors for 2021 in grants of the Company's common stock, in lieu of cash compensation. Non-employee members of the Board of Directors were granted an aggregate of 121,237 shares of common stock at a price equal to $1.78 per share of common stock, as compensation, in lieu of $216 of cash compensation, for service as directors for 2021. |
Significant Accounting Polici_2
Significant Accounting Policies and Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of presentation and use of estimates | Basis of presentation and use of estimates The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP") and include the accounts of the Company and its wholly owned subsidiaries, Motus Ltd., an Israel corporation, which has operations in Tirat Carmel, Israel, and Motus Inc., a Delaware corporation, which has operations in the U.S. All inter-company accounts and transactions have been eliminated in consolidation. Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification, or ASC, and Accounting Standards Updates, or ASUs, of the Financial Accounting Standards Board. The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Functional currency and foreign currency translation | Functional currency and foreign currency translation The functional currency of the Company, inclusive of foreign subsidiaries, is the U.S dollar (“dollar”) since the dollar is the currency of the primary economic environment in which the Company has operated and expects to continue to operate in the foreseeable future. Transactions and balances denominated in dollars are presented at their original amounts. Transactions and balances denominated in foreign currencies have been re-measured to dollars in accordance with the provisions of ASC 830-10, “Foreign Currency Translation”. All transaction gains and losses from re-measurement of monetary balance sheet items denominated in non-dollar currencies are reflected in the consolidated statement of comprehensive loss as foreign currency (loss) gain, as appropriate. |
Cash and cash equivalents | Cash and cash equivalents The Company considers all highly liquid investment securities with an original maturity of three months or less to be cash equivalents. Due to the short-term maturity of such investments, the carrying amounts are a reasonable estimate of fair value. Cash and cash equivalents include cash on-hand and highly-rated U.S. government backed money market fund investments. |
Investments | Investments The Company accounts for investments held as “available-for-sale” in accordance with ASC 320, “Investments - Debt and Equity Securities”. The Company has one equity investment in a mutual fund and classifies this investment as a current asset and carries it at fair value. Unrealized gains and losses are recorded in finance income (expense), net on the consolidated statement of comprehensive loss. Realized gains or losses on mutual fund transactions are reported in the consolidated statement of comprehensive loss. The mutual fund is maintained at one financial institution. The Company’s investment policy is focused on the preservation of capital, liquidity and return. From time to time, the Company may sell certain securities, but the objectives are generally not to generate profits on short-term differences in price. |
Revenue recognition | Revenue recognition Sales contracts executed for the second generation Pure-Vu System is accounted for in accordance with ASC Topic 606 - Revenue from Contracts with Customers ("ASC 606") to depict the transfer of control to the Company's customers in an amount reflecting the consideration to which the Company expects to be entitled to. The Pure-Vu System consists of a Workstation (a "Workstation") and single use disposable sleeve (a "Disposable"). ASC 606 applies to all contracts with customers, except for contracts that are within the scope of other standards, such as leases and collaboration arrangements. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps: (1) identify the contract with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract and (5) recognize revenue when a performance obligation is satisfied. Commercial placements of the second generation system include the Workstation, sale of the Disposables, and a service plan. The Workstation is operational without any significant customization and modification and the Disposables are specialized consumables that are readily available for purchase from the Company. Therefore, revenue from the sale of a Workstation is recognized after the customer commits to purchase the Workstation and the Workstation is delivered, which is when title is transferred. Disposables are identified as a separate performance obligation, and therefore, revenue from the sale of Disposables is recognized when the Disposables are delivered to the customer and title is transferred. A free one-year service plan is included with the purchase of any second generation Pure-Vu Workstation. An extended service plan with varying support and maintenance of the Workstation is offered for sale after the free one-year service plan period. In the case of the free one-year service plan, a portion of the Workstation sales price is deferred and recognized ratably over the one-year service plan term based upon the relative standalone value. The standalone selling price of the Workstation is set at the beginning of the contract based on observable prices from standalone sales of the Workstation, however, at times, the Company has offered discounts from that price to certain customers. The standalone sales price of the one year service plan is based on the expected costs of replacement parts and direct costs to perform the service plus a standard margin, as set by the Company. The standard margin assumed is consistent with the margin expected in pricing the extended service plan. Revenue for the extended service plans is recognized ratably over the term of the service plan contract period. At times, the Company may include a limited time free trial to potential customers to evaluate the Workstation for a period of up to 6 months and in certain instances extend the period to an aggregate of up to 11 months. The Company considers the 6-11 month usage period as a non-contiguous limited trial period because the total length of the free trial is still less than one year. In scenarios where the Company continues to provide the Workstation to a customer for a usage period of greater than one year, the arrangement falls outside of the scope of ASC 606, as described below. Management does not collect any upfront payments or deposits prior to commencing a free trial period. No revenue is recognized for the Workstation during the duration of a free trial, however, any Disposables purchased by the evaluator are recognized when delivered, as described above. For contracts outside the scope of ASC 606, the Company determines income for proposed supply arrangements under 1) ASC 842 as it pertains to an embedded lease of the Workstation within a proposed supply arrangement and 2) ASC 606 for the sale of the sleeves within the proposed supply arrangement. The Company allocates the transaction price to the performance obligations within the proposed supply arrangements using the total estimated purchases method for both (i) arrangements that contain minimum purchase commitments and (ii) those arrangements that do not contain a minimum purchase commitment, but instead offer a volume discount for purchases that exceed a specified tier. During the year ended December 31, 2020, the Company recognized revenue of $98, which primarily consisted of revenue from the sales of Disposables. During the year ended December 31, 2019 the Company recognized revenue of $107, which consisted of $46 from the sale of a Workstation and the remaining revenue from the sales of Disposables. Deferred revenue is de minimis at December 31, 2020 and 2019. Lease revenue was de minimis for the years ended December 31, 2020 and 2019. |
Contract Costs | Contract Costs Incremental commissions, if applicable, above a base commission level, are paid to sales representatives upon certain eligible sales, which are paid upon execution of the sales agreement. The guidance within ASC 606 provides a practical expedient if the amortization period of the assets that the entity otherwise would have recognized is one year or less. The Company chose to apply the available practical expedient as the commission paid on eligible sales orders relates to the period in which the sales order was fulfilled. For the years ending December 31, 2020 and 2019, incremental commissions paid on eligible sales orders were $0 and $27, respectively. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Company makes estimates for the allowance for doubtful accounts based upon its assessment of various factors, including historical experience, the age of the accounts receivable balances, credit quality of our customers, current economic conditions, and other factors that may affect customers' ability to pay. As of December 31, 2020 and 2019, the allowance for doubtful accounts was $0. |
Inventory | Inventory Inventory is stated at lower of cost and net realizable value using the weighted average cost method and is evaluated at least annually for impairment. The Company records an inventory reserve for losses associated with dated, expired, excess and obsolete items. Reserves and write-downs of inventory is based on management's current knowledge with respect to inventory levels, planned production, and extension capabilities of materials on hand. A significant change in the timing or level of demand for the Company's products compared to forecasted amounts may result in recording additional charges for excess and obsolete inventory in the future. The Company records charges for excess and obsolete inventory within cost of revenues. |
Leases | Leases Effective January 1, 2019, the Company adopted ASC 842- Leases (“ASC 842”). The lease standard provided a number of optional practical expedients in transition. The Company elected the package of practical expedients. As such, the Company did not have to reassess whether expired or existing contracts are or contain a lease; did not have to reassess the lease classifications or reassess the initial direct costs associated with expired or existing leases. The lease standard also provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption under which the Company will not recognize right-of-use (“ROU”) assets or lease liabilities, and this includes not recognizing ROU assets or lease liabilities for existing short-term leases. The Company elected the practical expedient to not separate lease and non-lease components for certain classes of assets (facilities). At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and short-term and long-term lease liabilities, as applicable. The Company does not have financing leases. Operating lease liabilities and their corresponding right-of-use assets are initially recorded based on the present value of lease payments over the expected remaining lease term. Certain adjustments to the right-of-use asset may be required for items such as incentives received. The interest rate implicit in lease contracts is typically not readily determinable. As a result, the Company utilizes its incremental borrowing rate to discount lease payments, which reflects the fixed rate at which the Company could borrow on a collateralized basis the amount of the lease payments in the same currency, for a similar term, in a similar economic environment. Prospectively, the Company will adjust the right-of-use assets for straight-line rent expense or any incentives received and remeasure the lease liability at the net present value using the same incremental borrowing rate that was in effect as of the lease commencement or transition date. |
Fixed assets, net | Fixed assets, net Fixed assets are stated at cost less accumulated depreciation. Depreciation is calculated based on the straight-line method, at annual rates reflecting the estimated useful lives of the related assets, as follows: Office equipment 5-15 years Computers and software 3-5 years Machinery 5-10 years Lab and medical equipment 3-7 years Leasehold improvements Shorter of lease term or useful life |
Share based compensation | Share based compensation The Company adopted Accounting Standards Update 2018-07 (“ASU 2018-07”), “Improvement to Nonemployee Share Based Payment Accounting”, which expanded the scope of ASC 718 to include share- based payment transactions for acquiring goods and services from nonemployees. The guidance was applied prospectively to all new awards granted after the date of adoption. In addition, the guidance was applied to all existing equity-classified awards for which a measurement date has not been established under ASC 505-50 by the adoption date by remeasuring at fair value as of the adoption date, and recording a cumulative effect adjustment to opening accumulated deficit on January 1, 2019. For the Company’s equity-classified awards for which a measurement date has not been established under ASC 505-50, the fair value on January 1, 2019, the adoption date, approximated the value assigned on December 31, 2018, therefore no cumulative adjustment to opening accumulated deficit was required. Under the revised guidance, the accounting for awards issued to non-employees will be similar to the model for employee awards, except that ASU 2018-07: ● allows the Company to elect on an award-by-award basis to use the contractual term as the expected term assumption in the option pricing model, and ● the cost of the grant is recognized in the same period(s) and in the same manner as if the grantor had paid cash. Employee and Non-Employee Share Based Compensation The Company applies ASC 718-10, “Share- Based Payment,” which requires the measurement and recognition of compensation expenses for all share based payment awards made to employees and directors including employee stock options under the Company’s stock plans and equity awards issued to non-employees based on estimated fair values. ASC 718-10 requires companies to estimate the fair value of equity-based option awards on the date of grant using an option-pricing model. The fair value of the award is recognized as an expense on a straight-line basis over the requisite service periods in the Company’s consolidated statements of comprehensive loss. The Company recognizes share based award forfeitures as they occur. The Company estimates the fair value of granted option equity awards using a Black-Scholes options pricing model. The option-pricing model requires a number of assumptions, of which the most significant are share price, expected volatility and the expected option term (the time from the grant date until the options are exercised or expire). Expected volatility is estimated based on volatility of similar companies in the technology sector. The Company has historically not paid dividends and has no foreseeable plans to issue dividends. The risk-free interest rate is based on the yield from governmental zero-coupon bonds with an equivalent term. The expected option term is calculated for options granted to employees and directors using the “simplified” method. Grants to non-employees are based on the contractual term. Changes in the determination of each of the inputs can affect the fair value of the options granted and the results of operations of the Company. Restricted Stock Units The Company issues restricted stock units under its 2016 Equity Incentive Plan. The fair value of the restricted stock units is based on the closing stock price on the date of grant and is expensed as operating expense over the period during which the units vest. Each restricted stock unit entitles the grantee to one share of common stock to be received upon vesting up to four years after the grant date. Recipients of restricted stock units have no voting rights until the vesting of the award. |
Basic and diluted net loss per share | Basic and diluted net loss per share Basic loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year. The shares of common stock into which the Pre-Funded Warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date. Diluted loss per share is computed by dividing the net loss by the weighted average number of common shares outstanding during the year, plus the number of common shares that would have been outstanding if all potentially dilutive ordinary shares had been issued, using the treasury stock method, in accordance with ASC 260-10 "Earnings per Share". Potentially dilutive common shares were excluded from the calculation of diluted loss per share for all periods presented due to their anti-dilutive effect due to losses in each period. |
Research and development expenses | Research and development expenses Research and development expenses are charged to the consolidated statement of comprehensive loss as incurred. |
Patent costs | Patent costs Costs incurred in connection with acquiring patent rights and the protection of proprietary technologies are expensed as incurred. |
Debt issuance costs | Debt issuance costs Debt issuance costs represent the costs associated with the issuance of a debt instrument and are amortized using the effective interest method over the life of the related debt instrument. The Company records debt issuance costs as a debt discount and is a reduction of the carrying amount of the debt liability. |
Liabilities due to termination of employment agreements | Liabilities due to termination of employment agreements Under Israeli employment laws, employees of Motus Ltd. are included under Article 14 of the Severance Compensation Act, 1963 ("Article 14") for a portion of their salaries. According to Article 14, these employees are entitled to monthly deposits made by Motus Ltd. on their behalf with insurance companies. Payments in accordance with Article 14 release Motus Ltd. from any future severance payments (under the Israeli Severance Compensation Act, 1963) with respect of those employees. The aforementioned deposits are not recorded as an asset in the Company's balance sheet, and there is no liability recorded as the Company does not have a future obligation to make any additional payments. |
Income taxes | Income taxes The Company provides for income taxes using the asset and liability approach. Deferred tax assets and liabilities are recorded based on the differences between the financial statement and tax bases of assets and liabilities and the tax rates in effect when these differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. As of December 31, 2020 and 2019, the Company had a full valuation allowance against deferred tax assets. The Company is subject to the provisions of ASC 740-10-25, Income Taxes (ASC 740). ASC 740 prescribes a more likely-than-not threshold for the financial statement recognition of uncertain tax positions. ASC 740 clarifies the accounting for income taxes by prescribing a minimum recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. On a quarterly basis, the Company undergoes a process to evaluate whether income tax accruals are in accordance with ASC 740 guidance on uncertain tax positions. There are currently no open Federal or State audits. The Company has not recorded any liability for uncertain tax positions at December 31, 2020 or December 31, 2019. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was signed into law to address the COVID-19 crisis. The CARES Act is an approximately $2 trillion emergency economic stimulus package that includes numerous U.S. federal income tax provisions, including various payroll tax incentives and the modification of: (i) net operating loss rules, (ii) the alternative minimum tax refund and (iii) business interest deduction limitations under Section 163(j) of the Internal Revenue Code. The impact of the CARES Act on the Company was not material. For the years ended December 31, 2020 and 2019, the Company recorded zero income tax expense. No tax benefit has been recorded in relation to the pre-tax loss for the years ended December 31, 2020 and 2019, due to a full valuation allowance to offset any deferred tax asset related to net operating loss carry forwards attributable to the losses. |
Restructuring charges | Restructuring charges Restructuring charges are comprised of severance costs related to workforce reductions and other costs directly related to the 2020 Plan, including lease exit and fixed asset impairment. The Company recognizes restructuring charges when the liability is incurred. Employee termination benefits are accrued at the date management has committed to a plan of termination and employees have been notified of their termination dates and expected severance payments, see note 13. |
Fair value of financial instrument | Fair value of financial instrument The Company accounts for financial instruments in accordance with ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"). ASC 820 establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under ASC 820 are described below: Level 1 – Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; Level 2 – Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices, and inputs that are not directly observable but are corroborated by observable market data; Level 3 – Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable. There were no changes in the fair value hierarchy leveling during the years ended December 31, 2020 and 2019. |
New Accounting Pronouncements- Recently Adopted | New Accounting Pronouncements- Recently Adopted From time to time, new accounting pronouncements are issued by the FASB or other standard setting bodies that the Company adopts as of the specified effective date. Unless otherwise discussed below, the Company does not believe that the adoption of recently issued standards have or may have a material impact on its consolidated financial statements and disclosures. In August 2018, the FASB issued ASU 2018-13, “Changes to Disclosure Requirements for Fair Value Measurements”, which will improve the effectiveness of disclosure requirements for recurring and nonrecurring fair value measurements. ASU 2018-13 removes, modifies, and adds certain disclosure requirements, and is effective for all entities for fiscal years ending after December 15, 2019. The Company adopted ASU 2018-13 on January 1, 2020. The adoption of ASU 2018-13 did not have a material impact on the Company’s financial position or results of operations. In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes”, or ASU 2019-12, which is intended to simplify the accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard will be effective beginning January 1, 2021. The adoption of ASU 2019-12 did not have a material impact on the Company’s financial position or results of operations. |
New Accounting Pronouncements- Not Yet Adopted | New Accounting Pronouncements- Not Yet Adopted In June 2016, the FASB issued ASU 2016-13, “Financial Instruments – Credit Losses” to improve information on credit losses for financial assets and net investment in leases that are not accounted for at fair value through net income. ASU 2016-13 replaces the current incurred loss impairment methodology with a methodology that reflects expected credit losses. In April 2019 and May 2019, the FASB issued ASU No. 2019-04, “Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments” and ASU No. 2019-05, “Financial Instruments-Credit Losses (Topic 326): Targeted Transition Relief” which provided additional implementation guidance on the previously issued ASU. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments - Credit Loss (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842),” which defers the effective date for public filers that are considered small reporting companies (“SRC”) as defined by the Securities and Exchange Commission to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Since the Company is an SRC, implementation is not needed until January 1, 2023. The Company will continue to evaluate the effect of adopting ASU 2016-13 will have on the Company’s financial statements and disclosures. |
Significant Accounting Polici_3
Significant Accounting Policies and Basis of Presentation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Schedule of fixed assets are stated at cost less accumulated depreciation | Office equipment 5-15 years Computers and software 3-5 years Machinery 5-10 years Lab and medical equipment 3-7 years Leasehold improvements Shorter of lease term or useful life |
Investments and Fair Value of_2
Investments and Fair Value of Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of available-for-sale equity securities | December 31, 2019 Amortized Carrying Mutual fund, available-for-sale $ 8,198 $ 8,203 Total $ 8,198 $ 8,203 |
Schedule of fair value of financial assets and liabilities | December 31, 2020 Level 1 Level 2 Level 3 Fair Value Assets Investments $ - $ - $ - $ - Liabilities Contingent royalty obligation $ - $ - $ 1,617 $ 1,617 December 31, 2019 Level 1 Level 2 Level 3 Fair Value Assets Investments $ 8,203 $ - $ - $ 8,203 Liabilities Contingent royalty obligation $ - $ - $ 1,872 $ 1,872 |
Schedule of estimated fair value of Level 3 contingent royalty obligation | Fair Value Measurements of Contingent Royalty Obligation (Level 3) Balance at December 31, 2018 $ 1,953 Change in estimated fair value of contingent royalty obligation (81 ) Balance at December 31, 2019 1,872 Change in estimated fair value of contingent royalty obligation (255 ) Balance at December 31, 2019 $ 1,617 |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | December 31, 2020 2019 Raw materials $ 333 $ 294 Work-in-process 211 124 Finished goods 529 596 Inventory reserve (268 ) - Inventory, net $ 805 $ 1,014 |
Fixed assets, Net (Tables)
Fixed assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fixed assets, Net [Abstract] | |
Schedule of fixed assets, net | December 31, 2020 2019 Office equipment $ 167 $ 148 Computers and software 299 335 Machinery 455 455 Lab and medical equipment 1,039 568 Leasehold improvements 185 180 Total 2,145 1,686 Less accumulated depreciation and amortization (967 ) (630 ) Fixed assets, net $ 1,178 $ 1,056 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of lease cost and supplemental balance sheet information | Year Ended December 31, 2020 2019 Lease Cost Operating lease cost, net of related party license fee $ 176 $ 298 Variable lease cost 118 99 Total lease cost $ 294 $ 397 As of December 31, 2020 2019 Assets Operating lease, right-of-use- asset $ 766 $ 1,021 Liabilities Current Operating lease liabilities $ 238 $ 321 Non-current Operating lease liabilities, net of current portion 547 713 Total lease liabilities $ 785 $ 1,034 Other information: Weighted average remaining lease term - operating leases 3.33 years 4.10 years Weighted-average discount rate - operating leases 7.78 % 7.67 % |
Schedule of future minimum lease payments under non-cancellable operating leases | Year Ended December 31, Amount 2021 $ 287 2022 273 2023 184 2024 141 Total future minimum lease payments 885 Imputed interest (100 ) Total liability $ 785 |
Schedule of cash paid for amounts included in the measurement of lease liabilities | Years Ended December 31, 2020 2019 Cash paid for amounts included in measurement of lease liabilities: $ (335 ) $ (346 ) |
Term Debt (Tables)
Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of future maturities of term debt | Years Ending December 31, Amount 2021 $ - 2022 2,000 2023 4,000 2024 2,000 Total 8,000 Less unamortized debt issuance costs (21 ) Total Term Debt, less debt issuance costs $ 7,979 |
Stock- based compensation (Tabl
Stock- based compensation (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Schedule of warrants | Shares Underlying Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at January 1, 2019 2,629,468 $ 5.24 3.58 $ - Granted 141,333 5.62 Forfeited (25,000 ) 7.39 Outstanding at December 31, 2019 2,745,801 5.24 2.58 $ - Granted 14,437,250 1.25 Exercised (50,000 ) 1.17 * Forfeited (75,000 ) 8.71 Outstanding and exercisable at December 31, 2020 17,058,051 $ 1.86 5.78 $ - * represents amount less than $1,000 |
Schedule of stock option activity | Shares Underlying Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate Intrinsic Value Outstanding at January 1, 2019 2,520,101 $ 4.32 8.72 $ - Granted 1,242,144 4.02 Exercised (416 ) 3.78 * Forfeited (242,060 ) 4.24 Outstanding at December 31, 2019 3,519,769 4.22 7.91 - Granted 2,650,666 1.46 Forfeited (1,141,316 ) 3.17 Outstanding at December 31, 2020 5,029,119 $ 3.00 7.96 $ - * represents amount less than $1,000 |
Schedule of option pricing model using weighted average assumptions | For the year ended December 31, 2020 2019 Expected term, in years 5.6 5.8 Expected volatility 82.70 % 72.89 % Risk-free interest rate 0.86 % 2.34 % Dividend yield - - Grant date fair value $ 1.83 $ 2.58 |
Schedule of restricted stock unit awards activity | Number of Shares Aggregate Nonvested at January 1, 2019 165,000 $ 4.91 Granted 76,112 4.32 Vested (55,523 ) 4.76 Nonvested at December 31, 2019 185,589 $ 4.71 Granted 260,154 2.16 Vested (107,818 ) 3.59 Nonvested at December 31, 2020 337,925 $ 3.10 |
Schedule of share based compensation | December 31, 2020 2019 Research and development $ 588 $ 697 Sales and marketing 340 325 General and administrative 1,977 2,183 Total $ 2,905 $ 3,205 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of deferred tax assets | December 31, 2020 2019 Deferred tax assets: Net operating loss carryforwards – Federal and state $ 3,371 2,183 Net operating loss carryforwards – Israel 16,323 12,680 Share based compensation 1,268 1,004 Capitalized research and development 734 731 Accrued liabilities and reserves 743 841 Total deferred tax assets 22,439 17,439 Deferred tax liabilities: Right of use asset (132 ) (168 ) Other (16 ) (5 ) Total deferred tax liabilities (148 ) (173 ) Net deferred tax assets before valuation allowance 22,291 17,266 Valuation allowance (22,291 ) (17,266 ) Net deferred tax assets after valuation allowance $ - $ - |
Schedule of effective income tax rate reconciliation | For the Year Ended December 31, 2020 2019 U.S. federal statutory tax rate 21.0 % 21.0 % State income taxes, net of federal benefit 4.2 0.9 U.S. vs. foreign tax rate differential 1.5 1.7 Non-deductible expenses (0.6 ) (1.4 ) Change in valuation allowance (26.1 ) (22.2 ) Effective tax rate - % - % |
Schedule of reconciliation NOLs | December 31, 2020 2019 U.S. Federal NOL's $ 10,724 $ 8,630 U.S. State NOL's 9,314 7,219 Israel NOL's 70,971 55,132 Total NOL's $ 91,009 $ 70,981 |
Description of Business (Detail
Description of Business (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
U.S. [Member] | |
Inpatient colonoscopy procedures cost | $ 1,500 |
Worldwide [Member] | |
Inpatient colonoscopy procedures cost | $ 4,800 |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) $ in Thousands | Sep. 01, 2020 | Jan. 27, 2021 | Dec. 31, 2020 |
Term debt under loan agreement | $ 8,000 | ||
Warrant Exercise Agreement [Member] | Subsequent Event [Member] | |||
Warrant exercise agreement, description | The Company entered into a Warrant Exercise Agreement (the "Exercise Agreement") with the Holder, at which time 8,000,000 of the Private Placement Warrants remained outstanding, due to the prior exercise of 733,625 of the Private Placement Warrants on January 22, 2021. Pursuant to the Exercise Agreement, in order to induce the Holder to exercise all of its remaining outstanding 8,000,000 Private Placement Warrants for cash, the Company agreed to issue to the Holder, new warrants (the "New Warrants") to purchase 0.75 shares of Common Stock for each share of Common Stock issued upon such exercise of the remaining 8,000,000 Private Placement Warrants pursuant to the Exercise Agreement, or an aggregate of 6,000,000 New Warrants. The terms of the New Warrants are substantially similar to those of the Private Placement Warrants, except that the New Warrants will have an exercise price of $2.12, will be immediately exercisable and will expire five years from the date of the Exercise Agreement. In addition, the Holder paid a cash payment of $0.10 for each New Warrant issued to the Holder, for an aggregate of $600,000 to the Company. The Company received aggregate gross proceeds before expenses of approximately $11.0 million from the exercise of all of the remaining 8,000,000 outstanding Private Placement Warrants held by the Holder and the payment of the purchase price for the New Warrants. | ||
Securities Purchase Agreement [Member] | Common Stock [Member] | |||
Securities purchase agreement, description | The Company entered into a securities purchase agreement (the "Securities Purchase Agreement") under which the Company sold and issued to an institutional investor (the "Holder"), in a registered direct offering, an aggregate of 3,200,000 shares of the Company's common stock par value $0.0001 per share (the "Common Stock"), and pre-funded warrants to purchase an aggregate of 5,533,625 shares of Common Stock (the "Pre-Funded Warrants"). The offering price was $1.145 for each share of Common Stock and $1.144 for each Pre-Funded Warrant. The Pre-Funded Warrants were immediately exercisable at a price of $0.001 per share of Common Stock. Pursuant to the Securities Purchase Agreement, in a concurrent private placement, the Company also agreed to issue to the Holder warrants to purchase up to 8,733,625 shares of Common Stock (the "Private Placement Warrants"). These warrants were immediately exercisable at an exercise price of $1.30 per share and expire on the fifth anniversary of the date of issuance. In connection with the closing of the offering, the Company received gross proceeds of $10.0 million before deducting placement agent fees and other offering expenses of $0.8 million, from the issuance of the Common Stock, the Pre-Funded Warrants and the Private Placement Warrants. | ||
Silicon Valley Bank [Member] | |||
Unrestricted cash | $ 10,000 |
Significant Accounting Polici_4
Significant Accounting Policies and Basis of Presentation (Details 1) | 12 Months Ended |
Dec. 31, 2020 | |
Office equipment [Member] | Minimum [Member] | |
Useful lives | 5 years |
Office equipment [Member] | Maximum [Member] | |
Useful lives | 15 years |
Computers and software [Member] | Minimum [Member] | |
Useful lives | 3 years |
Computers and software [Member] | Maximum [Member] | |
Useful lives | 5 years |
Machinery [Member] | Minimum [Member] | |
Useful lives | 5 years |
Machinery [Member] | Maximum [Member] | |
Useful lives | 10 years |
Lab and medical equipment [Member] | Minimum [Member] | |
Useful lives | 3 years |
Lab and medical equipment [Member] | Maximum [Member] | |
Useful lives | 7 years |
Leasehold improvements [Member] | |
Useful lies, description | Shorter of lease term or useful life |
Significant Accounting Polici_5
Significant Accounting Policies and Basis of Presentation (Details Narrative) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 27, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounting Policies [Abstract] | |||
Revenue recognized | $ 98 | $ 107 | |
Commissions paid | 0 | 27 | |
Allowance for doubtful accounts | 0 | $ 0 | |
Emergency economic stimulus package, description | The Coronavirus Aid, Relief, and Economic Security Act (CARES Act), was signed into law to address the COVID-19 crisis. The CARES Act is an approximately $2 trillion emergency economic stimulus package that includes numerous U.S. federal income tax provisions, including various payroll tax incentives and the modification of: (i) net operating loss rules, (ii) the alternative minimum tax refund and (iii) business interest deduction limitations under Section 163(j) of the Internal Revenue Code. The impact of the CARES Act on the Company was not material. | ||
Sale of workstation | $ 46 |
Investments and Fair Value of_3
Investments and Fair Value of Financial Instruments (Details) - Fair Value, Measurements, Recurring [Member] $ in Thousands | Dec. 31, 2019USD ($) |
Amortized Cost | $ 8,198 |
Carrying value | 8,203 |
Mutual Fund [Member] | Available-for-sale Securities [Member] | |
Amortized Cost | 8,198 |
Carrying value | $ 8,203 |
Investments and Fair Value of_4
Investments and Fair Value of Financial Instruments (Details 1) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Investments | $ 8,203 | |
Liabilities | ||
Contingent royalty obligation | 1,617 | 1,872 |
Level 1 [Member] | ||
Assets | ||
Investments | 8,203 | |
Liabilities | ||
Contingent royalty obligation | ||
Level 2 [Member] | ||
Assets | ||
Investments | ||
Liabilities | ||
Contingent royalty obligation | ||
Level 3 [Member] | ||
Assets | ||
Investments | ||
Liabilities | ||
Contingent royalty obligation | $ 1,617 | $ 1,872 |
Investments and Fair Value of_5
Investments and Fair Value of Financial Instruments (Details 2) - Contingent Royalty Obligation [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | ||
Balance at beginning | $ 1,872 | $ 1,953 |
Change in estimated fair value of contingent royalty obligation | (255) | (81) |
Balance at ending | $ 1,617 | $ 1,872 |
Investments and Fair Value of_6
Investments and Fair Value of Financial Instruments (Details Narrative) - USD ($) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Contingent royalty obligation | ||
Fair value of the liability, description | The Company recalculated the fair value of the liability by applying a +/- 2% change to the input variable in the discounted cash flow model; the discount rate. A 2% decrease in the discount rate would increase the liability by approximately $260 and a 2% increase in the discount rate would decrease the liability by approximately $66. | |
Discount Rate [Member] | ||
Increase (Decrease) in discount rate | 21.00% | 21.00% |
Royalty payment | 3.00% | 3.00% |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 333 | $ 294 |
Work-in-process | 211 | 124 |
Finished goods | 529 | 596 |
Inventory reserve | (268) | |
Ending inventory | $ 805 | $ 1,014 |
Inventory (Details Narrative)
Inventory (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Inventory Disclosure [Abstract] | ||
Inventory write-down charge | $ 133 | $ 76 |
Fixed assets, Net (Details)
Fixed assets, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Total | $ 2,145 | $ 1,686 |
Less: accumulated depreciation and amortization | (967) | (630) |
Fixed assets, net | 1,178 | 1,056 |
Office equipment [Member] | ||
Total | 167 | 148 |
Computers and software [Member] | ||
Total | 299 | 335 |
Machinery [Member] | ||
Total | 455 | 455 |
Lab and medical equipment [Member] | ||
Total | 1,039 | 568 |
Leasehold improvements [Member] | ||
Total | $ 185 | $ 180 |
Fixed assets, Net (Details Narr
Fixed assets, Net (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fixed assets, Net [Abstract] | ||
Depreciation and amortization expense | $ 377 | $ 223 |
Fixed asset impairment charge | $ 18 | $ 35 |
Leases (Details)
Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease Cost | ||
Operating lease cost, net of related party license fee | $ 176 | $ 298 |
Variable lease cost | 118 | 99 |
Total lease cost | 294 | 397 |
Assets | ||
Operating lease, right-of-use- asset | 766 | 1,021 |
Current | ||
Operating lease liabilities | 238 | 321 |
Non-current | ||
Operating lease liabilities, net of current portion | 547 | 713 |
Total lease liabilities | $ 785 | $ 1,034 |
Other Information: | ||
Weighted average remaining lease term - operating leases, in years | 3 years 3 months 29 days | 4 years 1 month 6 days |
Weighted average discount rate - operating leases | 7.78% | 7.67% |
Leases (Details 1)
Leases (Details 1) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Twelve Months Ended December 31, | ||
2020 | $ 331 | |
2021 | $ 287 | 278 |
2022 | 273 | 264 |
2023 | 184 | 184 |
2024 | 141 | 142 |
Total future minimum lease payments | 885 | 1,199 |
Imputed interest | (100) | (165) |
Total liability | $ 785 | $ 1,034 |
Leases (Details 2)
Leases (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Cash paid for amounts included in measurement of lease liabilities: | $ (335) | $ (346) |
Leases (Details Narrative)
Leases (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Lease expense | $ 294 | $ 397 |
Net of related party license fee | 172 | 18 |
Right-of-use asset | 766 | 1,021 |
Operating lease liabilities | 785 | 1,034 |
Non-cash asset and liability | $ 176 | $ 298 |
Office [Member] | Florida [Member] | ||
Expire date | Nov. 30, 2024 | |
Percentage of increase in annual base rent | 2.75% | |
Office [Member] | Israel [Member] | ||
Expire date | Dec. 31, 2022 | |
Percentage of increase in annual base rent | 4.00% | |
Renewal Term | 3 years | |
Right-of-use asset | $ 1,065 | |
Operating lease liabilities | $ 1,074 |
Term Debt (Details)
Term Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Years Ending December 31 | ||
2021 | ||
2022 | 2,000 | |
2023 | 4,000 | |
2024 | 2,000 | |
Total | 7,979 | $ 7,754 |
Less unamortized debt issuance costs | 21 | |
Total Term Debt, less debt issuance costs | $ 7,979 |
Term Debt (Details Narrative)
Term Debt (Details Narrative) - USD ($) $ in Thousands | Jan. 02, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | |||
Term debt | $ 8,000 | ||
Term debt, description | Interest payments have commenced on January 1, 2020, following each month until the maturity date. Principal payments will commence July 1, 2022 and continuing for 24 consecutive months thereafter. The Company may prepay all, but not less than all, of the outstanding principal balance of the Term Debt subject to prepayment premium of $240, plus all other sums, if any, that shall have become due and payable. | (i) one-half of one percent (0.50%) above the Prime Rate and (ii) five and one-half percent (5.50%). At December 31, 2020, the interest rate was 5.69%. The Term Debt is collateralized by substantially all assets of the Company. Additionally, the Company has pledged 65% of the outstanding capital stock in the Company's foreign subsidiary, Motus GI Medical Technologies, Ltd., to collateralize the Term Debt. | |
Debt issuance costs | $ 50 | ||
Amortized to interest expense | $ 25 | $ 4 | |
Interest rate | 5.69% | 6.73% | |
Bank Least | $ 10,000 |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | 60 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2016 | |
Royalty received | $ 1,407 | $ 1,396 | |
Contingent royalty obligation | 1,617 | 1,872 | |
Gain (loss) on change in fair value of contingent royalty obligation | 255 | $ 81 | |
Severance costs | $ 1,319 | ||
Series A Convertible Preferred Stock [Member] | |||
Percentage of payment amount | 10.00% | ||
Royalty Arrangements To Israeli National Authority For Technical Innovation [Member] | |||
Royalty received | $ 1,332 | ||
Description of royalty payment | Royalties on revenues generated in any fashion with a rate that is currently at 4% (which may be increased under certain circumstances). The Company may be obligated to pay up to 100% (which may be increased under certain circumstances) of the U.S. dollar-linked value of the grants received, plus interest at the rate of 12-month LIBOR. | ||
Royalty Payment Rights Certificates [Member] | Series A Convertible Preferred Stock [Member] | |||
Description of royalty payment | The Royalty Payment Rights initially entitled the holders in aggregate, to a royalty in an amount of: ● 3% of net sales subject to a maximum in any calendar year equal to the total dollar amount of Units closed on in the Company’s 2017 private placement (the “2017 Private Placement”); and ● 5% of licensing proceeds subject to a maximum in any calendar year equal to the total dollar amount of Units closed on in the 2017 Private Placement. | ||
Royalty Payment Rights Certificates [Member] | Series A Convertible Preferred Stock [Member] | Pure-Vu System [Member] | |||
Description of royalty payment | The Company will pay to the holders of the Royalty Payment Rights Certificates a royalty (the "Royalty Amount") equal to, in the aggregate, in royalty payments in any calendar year for all products: ● 3% of Net Sales* for commercialized product directly; and ● 5% of any Licensing Proceeds** for rights to commercialize the product if sublicensed by the Company to a third-party. * Notwithstanding the foregoing, with respect to Net Sales based Royalty Amounts, (a) no Net Sales based Royalty Amount shall begin to accrue or become payable until the Company has first generated, in the aggregate, since its inception, Net Sales equal to $20,000 (the "Initial Net Sales Milestone"), and royalties shall only be computed on, and due with respect to, Net Sales generated in excess of the Initial Net Sales Milestone, and (b) the total Net Sales based Royalty Amount due and payable in any calendar year shall be subject to a royalty cap amount per calendar year of $30,000. "Net Sales" is defined in the Royalty Payment Rights Certificates. The Company has not reached the Initial Net Sales Milestone as of December 31, 2019. ** Notwithstanding the foregoing, with respect to Licensing Proceeds based Royalty Amounts, (a) no Licensing Proceeds based Royalty Amount shall begin to accrue or become payable until the Company has first generated, in the aggregate, since its inception, Licensing Proceeds equal to $3,500 (the "Initial Licensing Proceeds Milestone"), and royalties shall only be computed on, and due with respect to, Licensing Proceeds in excess of the Initial Licensing Proceeds Milestone and (b) the total Licensing Proceeds based Royalty Amount due and payable in any calendar year shall be subject to a royalty cap amount per calendar year of $30,000. "Licensing" Proceeds is defined in the Certificate. The Company has not reached the Initial Licensing Proceeds Milestone as of December 31, 2020. |
Related Party Transactions (Det
Related Party Transactions (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Jan. 02, 2020 | |
Percentage of holder of common stock | 50.00% | |
Shared Space Agreement [Memeber] | ||
License fee | $ 172 | |
Percentage of holder of common stock | 5.00% | |
License fee expiration date | Sep. 30, 2024 | |
Shareholder Loan [Member] | ||
License fee | $ 18 | |
Shareholder Loan [Member] | Minimum [Member] | ||
License fee | 162 | |
Shareholder Loan [Member] | Maximum [Member] | ||
License fee | $ 198 |
Stock- Based Compensation (Deta
Stock- Based Compensation (Details) - Warrant [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | ||
Class of Warrant or Right, Shares Underlying Warrants [Roll Forward] | |||
Outstanding at beginning | 2,745,801 | 2,629,468 | |
Granted | 14,437,250 | 141,333 | |
Exercised | (50,000) | ||
Forfeited | (75,000) | (25,000) | |
Outstanding at ending | 17,058,051 | 2,745,801 | |
Class of Warrant or Right, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding at beginning | $ 5.24 | $ 5.24 | |
Granted | 1.25 | 5.62 | |
Exercised | 1.17 | ||
Forfeited | 8.74 | 7.39 | |
Outstanding at ending | $ 1.86 | $ 5.24 | |
Class of Warrant or Right, Weighted average Remaining Contractual Life (years) [Roll Forward] | |||
Outstanding at beginning | 2 years 6 months 29 days | 3 years 6 months 29 days | |
Outstanding at ending | 5 years 9 months 11 days | 2 years 6 months 29 days | |
Class of Warrant or Right, Aggregate Intrinsic Value [Roll Forward] | |||
Outstanding at beginning | |||
Exercised | [1] | ||
Outstanding at ending | |||
[1] | represents amount less than $1,000 |
Stock- Based Compensation (De_2
Stock- Based Compensation (Details 1) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |||
Outstanding beginning | 5,029,119 | 3,519,769 | |
Granted | 1,242,144 | 2,650,666 | |
Exercised | (416) | ||
Forfeited | (242,060) | (1,141,316) | |
Outstanding ending | 3,519,769 | 5,029,119 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Roll Forward] | |||
Outstanding beginning | $ 3 | $ 4.22 | |
Granted | 4.02 | 1.46 | |
Exercised | 3.78 | ||
Forfeited | 4.24 | 3.17 | |
Outstanding ending | $ 4.22 | $ 3 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Life [Roll Forward] | |||
Outstanding beginning | 8 years 8 months 19 days | 7 years 10 months 28 days | |
Outstanding ending | 7 years 10 months 28 days | 7 years 11 months 15 days | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Aggregate Intrinsic Value [Roll Forward] | |||
Outstanding beginning | |||
Exercised | [1] | ||
Outstanding ending | |||
[1] | represents amount less than $1,000 |
Stock- Based Compensation (De_3
Stock- Based Compensation (Details 2) - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Equity [Abstract] | ||
Expected term, in years | 5 years 7 months 6 days | 5 years 9 months 18 days |
Expected volatility | 82.70% | 72.89% |
Risk-free interest rate | 0.86% | 2.34% |
Dividend yield | ||
Grant date fair value | $ 1.83 | $ 2.58 |
Stock- Based Compensation (De_4
Stock- Based Compensation (Details 3) - Restricted Stock Units (RSUs) [Member] - $ / shares | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Number of Shares | ||
Nonvested at beginning | 185,589 | 165,000 |
Granted | 260,154 | 76,112 |
Vested | (107,818) | (55,523) |
Nonvested at ending | 337,925 | 185,589 |
Aggregate Weighted Average Grant Date Fair Value | ||
Nonvested at beginning | $ 4.71 | $ 4.91 |
Granted | 2.16 | 4.32 |
Vested | 3.59 | 4.76 |
Nonvested at ending | $ 3.10 | $ 4.71 |
Stock- Based Compensation (De_5
Stock- Based Compensation (Details 4) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Total | $ 2,905 | $ 3,205 |
Research and development [Member] | ||
Total | 588 | 697 |
Sales and marketing [Member] | ||
Total | 340 | 325 |
General and administrative [Member] | ||
Total | $ 1,977 | $ 2,183 |
Stock- Based Compensation (De_6
Stock- Based Compensation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands | Sep. 01, 2020 | Jun. 11, 2020 | Feb. 06, 2020 | Feb. 13, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 06, 2019 | Jan. 02, 2019 | Dec. 31, 2018 | Oct. 06, 2018 | Oct. 02, 2018 | Dec. 31, 2016 |
Directors receives service, description | Non-employee members of the Board of Directors were granted an aggregate of 103,404 shares of Common Stock as compensation, in lieu $111 of cash compensation, for service as directors during the year ended December 31, 2020. The Company recorded $56 in accrued expenses as of December 30, 2020, in relation to the service as directors for the three months ended December 31, 2020. On January 13, 2021, the non-employee members of the Board of Directors were granted an aggregate of 52,317 shares of Common Stock as compensation, in lieu of cash compensation, for service as directors during the fourth quarter of 2020, pursuant to the Company's non-employee director compensation policy. The number of shares granted to the Company's directors, in lieu of cash compensation, is determined by the dollar amount of quarterly fees due under the non-employee director compensation policy divided by the fair market value of a share of Common Stock as of the grant date. | |||||||||||
General and administrative expense | $ 9,562 | $ 9,497 | ||||||||||
Description of service agreement | The Company entered into a services agreement whereby it agreed to issue warrants to purchase 50,000 shares of common stock of the Company which vested immediately. The warrants are exercisable at $1.17 per share and expire three years from the date of issuance. The fair value of the warrants were valued on the date of grant at $28 using the Black-Scholes option-pricing model with the following parameters: (1) risk-free interest rate of 0.22%; (2) expected life in years of 3.0; (3) expected stock volatility of 73.06%; and (4) expected dividend yield of 0%. The Company recorded $28 as general and administrative expense in the accompanying consolidated statement of comprehensive loss in relation to the consulting agreement for the year ended December 31, 2020. On July 10, 2020 and August 3, 2020, the Company issued an aggregate of 50,000 shares of common stock upon exercise of the warrant which resulted in aggregate proceeds of approximately $59. | |||||||||||
Common stock issuable upon exercise of outstanding warrants | 17,048,051 | |||||||||||
Description of incentive plan | On January 1, 2021, pursuant to an annual evergreen provision, the number of shares of common stock reserved for future grants was increased by 1,936,339 shares. Under the 2016 Plan, effective as of January 1, 2021, the maximum number of shares of the Company's common stock authorized for issuance is 7,592,663. As of December 31, 2020, there were 387 shares of common stock available for future grant under the 2016 Plan. | |||||||||||
Weighted-average recognition period | 9 months 22 days | |||||||||||
Number of outstanding options to purchase | 2,537,941 | |||||||||||
Weighted-average exercise price (in dollars per share) | $ 4.18 | |||||||||||
Unamortized share based compensation for stock options | $ 2,131 | |||||||||||
Share based compensation expense related to stock options | 2,299 | 2,393 | ||||||||||
Restricted stock unit | 501,265 | |||||||||||
Unamortized stock compensation for restricted stock units | $ 897 | |||||||||||
Weighted-average recognition period restricted stock units | 1 year 29 days | |||||||||||
Restricted Stock Units (RSUs) [Member] | ||||||||||||
General and administrative expense | $ 476 | $ 280 | ||||||||||
Granted | 260,154 | 76,112 | ||||||||||
Common Stock [Member] | ||||||||||||
Percentage of number of shares | 6.00% | |||||||||||
Warrant [Member] | ||||||||||||
Warrant exercise price (in dollars per share) | $ 1.86 | $ 5.24 | $ 5.24 | |||||||||
Agreement [Member] | Common Stock [Member] | ||||||||||||
Securities purchase agreement, description | The Company entered into a securities purchase agreement (the "Securities Purchase Agreement") under which it sold and issued to an institutional investor (the "Holder"), in a registered direct offering, an aggregate of 3,200,000 shares of the Company's common stock par value $0.0001 per share (the "Common Stock"), and pre-funded warrants to purchase an aggregate of 5,533,625 shares of Common Stock (the "Pre-Funded Warrants"). The offering price was $1.145 for each share of Common Stock and $1.144 for each Pre-Funded Warrant. The Pre-Funded Warrants were immediately exercisable at a price of $0.001 per share of Common Stock. The shares of common stock into which the pre-funded warrants may be exercised are considered outstanding for the purposes of computing earnings per share because the shares may be issued for little or no consideration, are fully vested, and are exercisable after the original issuance date. Pursuant to the Securities Purchase Agreement, in a concurrent private placement, the Company has also agreed to sell and issue to the purchaser warrants to purchase up to 8,733,625 shares of Common Stock (the "Private Placement Warrants"). These warrants were immediately exercisable at an exercise price of $1.30 per share and expire on the fifth anniversary of the date of issuance. In connection with the closing of the offering, the Company received gross proceeds of $9,994 before deducting placement agent fees and other offering expenses of $849, from the issuance of the Common Stock, the Pre-Funded Warrants and the Private Placement Warrants. | |||||||||||
Agreement [Member] | Warrant [Member] | ||||||||||||
Securities purchase agreement, description | The Securities Purchase Agreement, as described above, the Company issued the Pre-Funded Warrants to purchase up to 5,533,625 shares of its common stock with the aggregate exercise price already being pre-funded to the Company on September 1, 2020 and, consequently, no additional consideration other than the nominal exercise price of $0.001 per warrant share shall be required to be paid to effect any exercise of the Pre-Funded Warrants. The Pre-Funded Warrants will be exercisable until it is exercised in full. Pursuant to the Securities Purchase Agreement, on September 1, 2020, the Company also issued the Private Placement Warrants to purchase 8,733,625 of its common stock at an exercise price of $1.30 per share that expires on September 1, 2025. The terms of both warrants include certain provisions related to fundamental transactions, a cashless exercise provision in the event registered shares are not available, and do not include any mandatory redemption provisions. Therefore, the warrants have been classified as equity upon issuance. As of February 16, 2021, the Pre-Funded Warrants for 5,533,625 shares of common stock and the Private Placement Warrants for 8,733,625 shares of common stock have been exercised. | |||||||||||
Consultant Agreement [Member] | Warrant [Member] | ||||||||||||
Number of warrants purchased | 25,000 | 25,000 | ||||||||||
Warrant exercise price (in dollars per share) | $ 10 | $ 8.75 | ||||||||||
Expected life | 24 months | 18 months | ||||||||||
Consultant Agreement [Member] | Warrant [Member] | Consultant [Member] | ||||||||||||
Number of warrants purchased | 10,000 | 10,000 | ||||||||||
Warrant exercise price (in dollars per share) | $ 7.25 | $ 6.25 | ||||||||||
Amended and Restated Employment Agreement [Member] | Warrant [Member] | ||||||||||||
Number of warrants purchased | 50,000 | |||||||||||
Warrant exercise price (in dollars per share) | $ 5 | |||||||||||
General and administrative expense | $ 90 | |||||||||||
Expiration date | Mar. 20, 2022 | |||||||||||
Amended and Restated Employment Agreement [Member] | November 2019 Consultant Warrant [Member] | ||||||||||||
Number of warrants purchased | 30,000 | |||||||||||
Warrant exercise price (in dollars per share) | $ 5 | |||||||||||
General and administrative expense | 55 | |||||||||||
Expiration date | Mar. 20, 2022 | |||||||||||
Services Agreement [Member] | Common Stock [Member] | ||||||||||||
Number of warrants purchased | 120,000 | |||||||||||
Warrant exercise price (in dollars per share) | $ 3.50 | |||||||||||
Remaining warrants granted | 60,000 | |||||||||||
Services Agreement [Member] | Warrant [Member] | ||||||||||||
General and administrative expense | $ 102 | $ 75 | ||||||||||
Fair value of warrants | $ 112 | |||||||||||
Exercise price (in dollars per share) | $ 2.16 | |||||||||||
Granted | 60,000 | |||||||||||
Risk-free interest rate | 1.43% | |||||||||||
Expected life in years | 3 years | |||||||||||
Expected stock volatility | 74.82% | |||||||||||
Expected dividend yield | 0.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets: | ||
Net operating loss carryforwards - Federal and state | $ 3,371 | $ 2,183 |
Net operating loss carryforwards - Israel | 16,323 | 12,680 |
Share based compensation | 1,268 | 1,004 |
Capitalized research and development | 734 | 731 |
Accrued liabilities and reserves | 743 | 841 |
Total deferred tax assets | 22,439 | 17,439 |
Deferred tax liabilities: | ||
Right of use asset | (132) | (168) |
Other | (16) | (5) |
Total deferred tax liabilities | (148) | (173) |
Net deferred tax assets before valuation allowance | 22,291 | 17,266 |
Valuation allowance | (22,291) | (17,266) |
Net deferred tax assets after valuation allowance |
Income Taxes (Details 1)
Income Taxes (Details 1) | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory tax rate | 21.00% | 21.00% |
State income taxes, net of federal benefit | 4.20% | 0.90% |
U.S. vs. foreign tax rate differential | 1.50% | 1.70% |
Non-deductible expenses | (0.60%) | (1.40%) |
Change in valuation allowance | (26.10%) | (22.20%) |
Effective tax rate |
Income Taxes (Details 2)
Income Taxes (Details 2) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
U.S. Federal NOL's | $ 10,724 | $ 8,630 |
U.S. State NOL's | 9,314 | 7,219 |
Israel NOL's | 70,971 | 55,132 |
Total NOL's | $ 91,009 | $ 70,981 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Taxes (Textual) | ||
Deferred tax assets | $ 22,300 | $ 17,300 |
Valuation allowance | 22,300 | 17,300 |
Valuation allowance increase | $ 5,000 | |
Ownership percentage | 50.00% | |
Federal and state NOL's | $ 91,009 | 70,981 |
Federal NOL | 10,724 | 8,630 |
Israel NOL | 70,971 | 55,132 |
NOL [Member] | ||
Income Taxes (Textual) | ||
Gross net operating loss | 9,100 | 71,000 |
Federal and state NOL's | $ 3,300 | $ 9,300 |
Expire date, description | Begin to expire after 2036 through 2040. | |
Federal NOL | $ 7,400 | |
Israel NOL | 71,000 | |
Israeli NOLs for US and have an indefinite life | $ 21,200 |
Restructuring (Details Narrativ
Restructuring (Details Narrative) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Restructuring and Related Activities [Abstract] | |
Restructuring activities, description | The 2020 Plan resulted in the reduction of the Company's overall headcount by approximately 50%, including a significant reduction of the Company's commercial team in the US, the implementation of tighter expense controls, and the termination of the lease of the Company's planned corporate office facility in Norwood, Massachusetts. |
Restructuring charges | $ 624 |
Employee severance and other benefits | 445 |
Lease termination and fixed asset impairments | $ 179 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - $ / shares | 1 Months Ended | 12 Months Ended | ||||
Jan. 27, 2021 | Jan. 20, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 17, 2021 | Dec. 31, 2018 | |
Subsequent Events (Textual) | ||||||
Expected term, in years | 5 years 7 months 6 days | 5 years 9 months 18 days | ||||
Warrant [Member] | ||||||
Subsequent Events (Textual) | ||||||
Exercise price | $ 1.86 | $ 5.24 | $ 5.24 | |||
Subsequent Event [Member] | Director [Member] | ||||||
Subsequent Events (Textual) | ||||||
Exercise price | $ 1.78 | |||||
Number of shares approved for issuance | 121,237 | |||||
Subsequent Event [Member] | Warrant [Member] | ||||||
Subsequent Events (Textual) | ||||||
Number of shares issued | 340,020 | |||||
Exercise price | $ 1.75 | |||||
Expected term, in years | 3 years | |||||
Subsequent Event [Member] | Warrant Exercise Agreement [Member] | ||||||
Subsequent Events (Textual) | ||||||
Warrant exercise agreement, description | The Company entered into a Warrant Exercise Agreement (the "Exercise Agreement") with the Holder, at which time 8,000,000 of the Private Placement Warrants remained outstanding, due to the prior exercise of 733,625 of the Private Placement Warrants on January 22, 2021. Pursuant to the Exercise Agreement, in order to induce the Holder to exercise all of its remaining outstanding 8,000,000 Private Placement Warrants for cash, the Company agreed to issue to the Holder, new warrants (the "New Warrants") to purchase 0.75 shares of Common Stock for each share of Common Stock issued upon such exercise of the remaining 8,000,000 Private Placement Warrants pursuant to the Exercise Agreement, or an aggregate of 6,000,000 New Warrants. The terms of the New Warrants are substantially similar to those of the Private Placement Warrants, except that the New Warrants will have an exercise price of $2.12, will be immediately exercisable and will expire five years from the date of the Exercise Agreement. In addition, the Holder paid a cash payment of $0.10 for each New Warrant issued to the Holder, for an aggregate of $600,000 to the Company. The Company received aggregate gross proceeds before expenses of approximately $11.0 million from the exercise of all of the remaining 8,000,000 outstanding Private Placement Warrants held by the Holder and the payment of the purchase price for the New Warrants. | |||||
Subsequent Event [Member] | Directors [Member] | ||||||
Subsequent Events (Textual) | ||||||
Exercise price | $ 1.78 | |||||
Number of shares approved for issuance | 160,000 | |||||
Subsequent Event [Member] | Executives and Directors [Member] | ||||||
Subsequent Events (Textual) | ||||||
Number of shares approved for issuance | 160,000 | |||||
Subsequent Event [Member] | Executives and Directors [Member] | Restricted Stock Units (RSUs) [Member] | ||||||
Subsequent Events (Textual) | ||||||
Number of shares approved for issuance | 266,000 | |||||
Subsequent Event [Member] | Employee [Member] | ||||||
Subsequent Events (Textual) | ||||||
Exercise price | $ 1.78 | |||||
Number of shares approved for issuance | 949,500 |