Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2020 | May 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | BIOL | |
Entity Registrant Name | BIOLASE, INC | |
Entity Central Index Key | 0000811240 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 31,743,102 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Interactive Data Current | Yes | |
Title of 12(b) Security | Common stock at par value $0.001 per share | |
Security Exchange Name | NASDAQ | |
Entity File Number | 001-36385 | |
Entity Tax Identification Number | 87-0442441 | |
Entity Address, Address Line One | 4 Cromwell | |
Entity Address, City or Town | Irvine | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 92618 | |
City Area Code | 949 | |
Local Phone Number | 361-1200 | |
Entity Incorporation, State or Country Code | DE | |
Document Transition Report | false | |
Document Quarterly Report | true |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 1,511 | $ 5,789 |
Restricted cash | 312 | 312 |
Accounts receivable, less allowance of $3,560 and $2,531 in 2020 and 2019, respectively | 4,749 | 8,760 |
Inventory | 12,192 | 10,995 |
Prepaid expenses and other current assets | 1,205 | 1,163 |
Total current assets | 19,969 | 27,019 |
Property, plant, and equipment, net | 1,017 | 1,193 |
Goodwill | 2,926 | 2,926 |
Right of use asset | 135 | 276 |
Other assets | 484 | 433 |
Total assets | 24,531 | 31,847 |
Current liabilities: | ||
Accounts payable | 4,056 | 5,332 |
Accrued liabilities | 4,079 | 4,744 |
Deferred revenue, current portion | 1,982 | 2,237 |
Term loan (net of discount) | 13,562 | 13,466 |
Total current liabilities | 23,679 | 25,779 |
Deferred revenue | 390 | 358 |
Warranty accrual | 246 | 245 |
Other liabilities | 1,107 | 1,123 |
Total liabilities | 25,422 | 27,505 |
Commitments and contingencies — Note 11 | ||
Redeemable preferred stock: | ||
Preferred stock, par value $0.001 per share; 1,000 shares authorized, 70 and 70 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively | 3,965 | 3,965 |
Stockholders' equity: | ||
Common stock, par value $0.001 per share; 40,000 shares authorized, 31,582 and 31,439 shares issued and 31,537 and 31,439 outstanding as of March 31, 2020 and December 31, 2019, respectively | 32 | 31 |
Additional paid-in-capital | 236,384 | 235,594 |
Accumulated other comprehensive loss | (719) | (701) |
Accumulated deficit | (240,553) | (234,547) |
Total stockholders' (deficit) equity | (4,856) | 377 |
Total liabilities, redeemable preferred stock and stockholders' (deficit) equity | $ 24,531 | $ 31,847 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Statement Of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 3,560 | $ 2,531 |
Temporary equity preferred stock, par value | $ 0.001 | $ 0.001 |
Temporary equity preferred stock, shares authorized | 1,000,000 | 1,000,000 |
Temporary equity preferred stock, shares issued | 70,000 | 70,000 |
Temporary equity preferred stock, shares outstanding | 70,000 | 70,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, shares issued | 31,582,000 | 31,439,000 |
Common stock, shares outstanding | 31,537,000 | 31,439,000 |
Consolidated Statements Of Oper
Consolidated Statements Of Operations And Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Statement [Abstract] | ||
Net revenue | $ 4,783 | $ 10,326 |
Cost of revenue | 3,430 | 6,804 |
Gross profit | 1,353 | 3,522 |
Operating expenses: | ||
Sales and marketing | 2,704 | 3,879 |
General and administrative | 3,010 | 2,393 |
Engineering and development | 991 | 1,424 |
Change in fair value of patent litigation settlement liability | 190 | |
Total operating expenses | 6,705 | 7,886 |
Loss from operations | (5,352) | (4,364) |
Loss on foreign currency transactions | 84 | 43 |
Interest expense | 589 | 478 |
Non-operating loss (income), net | 673 | 521 |
Loss before income tax provision | (6,025) | (4,885) |
Income tax provision | (19) | 15 |
Net loss | (6,006) | (4,900) |
Other comprehensive income item: | ||
Foreign currency translation adjustment | (18) | (55) |
Comprehensive loss | $ (6,024) | $ (4,955) |
Net loss per share: | ||
Basic | $ (0.19) | $ (0.23) |
Diluted | $ (0.19) | $ (0.23) |
Shares used in the calculation of net loss per share: | ||
Basic | 31,509 | 21,134 |
Diluted | 31,509 | 21,134 |
Consolidated Statements Of Rede
Consolidated Statements Of Redeemable Preferred Stock and Stockholders' (Deficit) Equity (Unaudited) - USD ($) $ in Thousands | Total | Redeemable Preferred Stock | Common Stock and Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Deficit |
Beginning balance at Dec. 31, 2018 | $ 228,451 | $ (670) | $ (216,692) | ||
Issuance of common stock upon exercise of options | 3 | ||||
Settlement of liability awards | 202 | ||||
Stock-based compensation expense | 634 | ||||
Other comprehensive loss | (55) | ||||
Net loss | $ (4,900) | (4,900) | |||
Ending balance at Mar. 31, 2019 | 6,973 | 229,290 | (725) | (221,592) | |
Total redeemable preferred stock, beginning balance at Dec. 31, 2019 | 3,965 | $ 3,965 | |||
Issuance of Redeemable preferred stock | |||||
Total redeemable preferred stock, ending balance at Mar. 31, 2020 | 3,965 | $ 3,965 | |||
Beginning balance at Dec. 31, 2019 | 377 | 235,625 | (701) | (234,547) | |
Settlement of liability awards | 151 | ||||
Stock-based compensation expense | 640 | ||||
Other comprehensive loss | (18) | ||||
Net loss | (6,006) | (6,006) | |||
Ending balance at Mar. 31, 2020 | $ (4,856) | $ 236,416 | $ (719) | $ (240,553) |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Cash Flows from Operating Activities: | ||
Net loss | $ (6,006) | $ (4,900) |
Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: | ||
Depreciation and amortization | 177 | 258 |
Provision for bad debts | 987 | 19 |
Amortization of discounts on lines of credit | 46 | 38 |
Amortization of debt issuance costs | 50 | 49 |
Stock-based compensation | 719 | 757 |
Deferred income taxes | (32) | (5) |
Earned interest income, net | (1) | |
Change in fair value of patent litigation settlement liability | 190 | |
Changes in operating assets and liabilities: | ||
Accounts receivable | 3,024 | (650) |
Inventory | (1,197) | 225 |
Prepaid expenses and other current assets | (142) | 463 |
Accounts payable and accrued liabilities | (1,541) | (1,514) |
Deferred revenue | (219) | 37 |
Net cash and cash equivalents used in operating activities | (4,134) | (5,034) |
Cash Flows from Investing Activities: | ||
Purchases of property, plant, and equipment | (9) | (8) |
Net cash and cash equivalents used in investing activities | (9) | (8) |
Cash Flows from Financing Activities: | ||
Payments of equity offering costs | (117) | |
Proceeds from exercise of stock options | 3 | |
Net cash and cash equivalents (used in) provided by financing activities | (117) | 3 |
Effect of exchange rate changes | (18) | (49) |
Decrease in cash, cash equivalents and restricted cash | (4,278) | (5,088) |
Cash, cash equivalents and restricted cash, beginning of period | 6,101 | 8,356 |
Cash, cash equivalents and restricted cash, end of period | 1,823 | 3,268 |
Supplemental cash flow disclosure: | ||
Cash paid for interest | 485 | 430 |
Cash paid for income taxes | 28 | 31 |
Cash paid for operating leases | 192 | 189 |
Non-cash accrual for capital expenditures | $ 7 | 24 |
Non-cash right-of-use assets obtained in exchange for lease obligation | $ 824 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Description of Business and Basis of Presentation | NOTE 1—DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION The Company B IOLASE, Inc. (“BIOLASE” and, together with its consolidated subsidiaries, the “Company”) is a medical device company that develops, manufactures, markets, and sells laser systems in dentistry and medicine. The Company’s products advance the practice of dentistry and medicine for patients and health care professionals. The Company’s proprietary dental laser systems allow dentists, periodontists, endodontists, oral surgeons, and other dental specialists to perform a broad range of minimally invasive dental procedures, including cosmetic, restorative, and complex surgical applications. The Company’s laser systems are designed to provide clinically superior results for many types of dental procedures compared to those achieved with drills, scalpels, and other conventional instruments. The Company has clearance from the Food and Drug Administration (“FDA”) to market and sell its laser systems in the United States and also have the necessary registration to market and sell its laser systems in Canada, the European Union, and many other countries outside the United States. Basis of Presentation The unaudited consolidated financial statements include the accounts of BIOLASE and its wholly-owned subsidiaries and have been prepared on a basis consistent with the December 31, 2019 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments and the elimination of all material intercompany transactions and balances, necessary to fairly present the information set forth therein. These unaudited, interim, consolidated financial statements do not include all the footnotes, presentations, and disclosures normally required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. The consolidated results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results for the full year. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2019, included in BIOLASE’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2020 (the “2019 Form 10-K”). Liquidity and Management’s Plans The Company incurred a loss from operations and a net loss, and used cash in operating activities for the three months ended March 31, 2020. The Company’s recurring losses, level of cash used in operations, and need for additional capital, along with uncertainties surrounding the Company’s ability to raise additional capital, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Fourth Amendment to the SWK Loan As of December 31, 2019, the Company was not in compliance with certain of its loan covenants under the Term Loan (as defined below). On March 25, 2020 the Company and SWK Funding, LLC entered into a Fourth Amendment to the Credit Agreement and granted the Company a waiver of such covenants through March 31, 2020. The Fourth Amendment included revisions to the financial covenants and to the warrant price for the SWK warrants. See Note 9 for additional information. Due to the uncertainty surrounding the Company’s continued inability to meet debt covenants in addition to the uncertainties surrounding the impact of COVID-19 on the Company’s business, the Company is not forecasting compliance with its debt covenants in the next twelve months and has classified the Term Loan with SWK Funding, LLC (the “Term Loan”) as a short-term liability. As of March 31, 2020, the Company had negative working capital of approximately $3.7 million. The Company’s principal sources of liquidity as of March 31, 2020 consisted of approximately $1.8 million in cash, cash equivalents and restricted cash and $4.7 million of accounts receivable, net. In order for the Company to continue operations beyond the next 12 months and be able to discharge its liabilities and commitments in the normal course of business, the Company must increase sales of its products, control or potentially reduce expenses and establish profitable operations in order to generate cash from operations or obtain additional funds when needed. Additional capital requirements may depend on many factors, including, among other things, the rate at which the Company’s business grows, the extent of the Company’s revenue from ventilator sales, the COVID-19 pandemic and the actions taken to contain it, demands for working capital, manufacturing capacity, and any acquisitions that the Company may pursue. From time to time, the Company could be required, or may otherwise attempt, to raise capital through either equity or debt offerings. The Company cannot provide assurance that it will be able to successfully enter into any such equity or debt financings in the future or that the required capital would be available on acceptable terms, if at all, or that any such financing activity would not be dilutive to its stockholders. COVID-19 Risk and Uncertainties and CARES Act Additionally, on January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally and on March 13, 2020, the United States declared a national emergency with respect to the coronavirus outbreak. This outbreak has severely impacted global economic activity, tax and many countries and many states in the United States have reacted to the outbreak by instituting quarantines, mandating business and school closures and restricting travel. These mandated business closures have included dental office closures in Europe and the United States for all but emergency procedures. Our salespeople have been unable to call on dental customers during these closures. In addition, most dental shows and workshops scheduled in the first and second quarters of 2020 have been canceled. There is no assurance that sales will return to normal levels during the second quarter of 2020 or at any time thereafter. However, the full impact of the COVID-19 outbreak continues to evolve and it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce and have taken actions to mitigate the impact including among other things, temporary reductions in pay, furloughs of certain positions along with deferrals in payment for cash preservation. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impact that the CARES Act may have on our business. Currently, we are unable to determine the impact that the CARES Act will have on our financial condition, results of operations, or liquidity. Paycheck Protection Program Loan (“PPP Loan”) On April 14, 2020, Biolase, Inc., was granted a loan from Pacific Mercantile Bank in the aggregate amount of $2,980,000.00, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan, which was in the form of a Note dated April 13, 2020 issued by the Company, matures on April 13, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on November 1, 2020. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires the Company to make estimates and assumptions that affect amounts reported in the consolidated financial statements and the accompanying notes. Significant estimates in these consolidated financial statements include allowances on accounts receivable, inventory, and deferred taxes, as well as estimates for accrued warranty expenses, goodwill and the ability of goodwill to be realized, revenue deferrals, effects of stock-based compensation and warrants, contingent liabilities, and the provision or benefit for income taxes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ materially from those estimates. Critical Accounting Policies Information with respect to the Company’s critical accounting policies, which management believes could have the most significant effect on the Company’s reported results and require subjective or complex judgments by management is contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the 2019 Form 10-K. Management believes that there have been no significant changes during the three months ended March 31, 2020 in the Company’s critical accounting policies from those disclosed in Item 7 of the 2019 Form 10-K. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market (or, if none exists, the most advantageous market) for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value is based on assumptions that market participants would use, including a consideration of non-performance risk. Under the accounting guidance for fair value hierarchy, there are three levels of measurement inputs. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable, either directly or indirectly. Level 3 inputs are unobservable due to little or no corroborating market data. The Company’s financial instruments, consisting of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, and the SWK Loan as discussed in Note 9, approximate fair value because of the nature of these items. Concentration of Credit Risk, Interest Rate Risk and Foreign Currency Exchange Rate Financial instruments which potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents, restricted cash, and trade accounts receivable. The Company maintains its cash and cash equivalents and restricted cash with established commercial banks. At times, balances may exceed federally insured limits. To minimize the risk associated with trade accounts receivable, management performs ongoing credit evaluations of customers’ financial condition and maintains relationships with the Company’s customers that allow management to monitor current changes in business operations so the Company can respond as needed. The Company does not, generally, require customers to provide collateral before it sells them its products. However, the Company has required certain distributors to make prepayments for significant purchases of products. Substantially all of the Company’s revenue is denominated in U.S. dollars, including sales to international distributors. Only a small portion of its revenue and expenses is denominated in foreign currencies, principally the Euro and Indian Rupee. The Company’s foreign currency expenditures primarily consist of the cost of maintaining offices, consulting services, and employee-related costs. During the three-month periods ended March 31, 2020 and 2019, the Company did not enter into any hedging contracts. Future fluctuations in the value of the U.S. dollar may affect the price competitiveness of the Company’s products outside the U.S. Recent Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations. Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform. This ASU was issued because the London Interbank Offered Rate (LIBOR) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. At the end of 2021, banks will no longer be required to report information that is used to determine LIBOR. As a result, LIBOR could be discontinued. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. Companies can apply the ASU immediately. However, the guidance will only be available for a limited time (generally through December 31, 2022). The Company is currently evaluating alternative benchmark rates to replace LIBOR and is still in the process of evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | NOTE 3 – REVENUE RECOGNITION Contracts with Customers Revenue for sales of products and services is derived from contracts with customers. The products and services promised in customer contracts include delivery of laser systems, imaging systems, and consumables as well as certain ancillary services such as training and extended warranties. Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service. Payment terms are stated in the contract and vary according to the arrangement. Because the customer typically agrees to a stated rate and price in the contract that does not vary over the life of the contract, the Company’s contracts do not contain variable consideration. The Company establishes a provision for estimated warranty expense. Performance Obligations At contract inception, the Company assesses the products and services promised in its contracts with customers. The Company then identifies performance obligations to transfer distinct products or services to the customers. In order to identify performance obligations, the Company considers all of the products or services promised in contracts regardless of whether they are explicitly stated or are implied by customary business practices. Revenue from products and services transferred to customers at a single point in time accounted for 74% and 84% of net revenue for the three months ended March 31, 2020 and March 31, 2019, respectively. The majority of the Company’s revenue recognized at a point in time is for the sale laser systems, imaging systems, and consumables. Revenue from these contracts is recognized when the customer is able to direct the use of and obtain substantially all of the benefits from the product which generally coincides with title transfer during the shipping process. Revenue from services transferred to customers over time accounted for 26% and 16% of net revenue for the three months ended March 31, 2020 and March 31, 2019, respectively. The majority of the Company’s revenue that is recognized over time relates to product training and extended warranties. Deferred revenue attributable to undelivered elements, which primarily consists of product training, totaled approximately $0.5 million and $0.6 million as of March 31, 2020 and December 31, 2019, respectively. Transaction Price Allocation The transaction price for a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in a contract. The primary method used to estimate standalone selling price is the observable price when the good or service is sold separately in similar circumstances and to similar customers. Significant Judgments Revenue is recorded for extended warranties over time as the customer benefits from the warranty coverage. This revenue will be recognized equally throughout the contract period as the customer receives benefits from the Company's promise to provide such services. Revenue is recorded for product training as the customer attends a training program or upon the expiration of the obligation, which is generally after nine months. The Company also has contracts that include both the product sales and product training as performance obligations. In those cases, the Company records revenue for product sales at the point in time when the product has been shipped. The customer obtains control of the product when it is shipped, as all shipments are made FOB shipping point, and after the customer selects its shipping method and pays all shipping costs and insurance. The Company has concluded that control is transferred to the customer upon shipment. Accounts Receivable Accounts receivable are stated at estimated net realizable value. The allowance for doubtful accounts is based on an analysis of customer accounts and the Company’s historical experience with accounts receivable write-offs. Contract Liabilities The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. The Company, however, recognizes a contract liability when a customer prepays for goods and/or services and the Company has not transferred control of the goods and/or services. The opening and closing balances of the Company’s contract liabilities are as follows (in thousands): March 31, December 31, 2020 2019 Undelivered elements (training, installation, product and support services) $ 476 $ 559 Extended warranty contracts 1,896 2,063 Total deferred revenue 2,372 2,622 Less long-term portion of deferred revenue 390 385 Total deferred revenue — long -term 390 385 Deferred revenue — current $ 1,982 $ 2,237 The balance of contract assets was immaterial as the Company did not have a significant amount of uninvoiced receivables at March 31, 2020 and December 31, 2019. The amount of revenue recognized during the three months ended March 31, 2020 that was included in the opening contract liability balance related to undelivered elements was $0.1 million and related to extended warranty contracts was $1.0 million. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred. The Company determined that disaggregating revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors. The Company’s revenues related to the following geographic areas were as follows for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 United States $ 3,129 $ 6,116 International 1,654 4,210 $ 4,783 $ 10,326 Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue recognized over time $ 1,260 $ 1,698 Revenue recognized at a point in time 3,523 8,628 Total $ 4,783 $ 10,326 The Company’s sales by end market were as follows for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 End-customer $ 2,340 $ 6,346 Distributors 2,443 3,980 $ 4,783 $ 10,326 The Company acts as the principal in all its imaging equipment distribution sales. The Company takes possession and control of the equipment before they are sold and transferred to the customer. The Company provides the equipment and any related services directly to the customer. The Company has inventory risk before the equipment is transferred to a customer. The Company purchases and obtains the goods before obtaining a contract with a customer. The Company also has discretion in establishing the price sold to the customer for the equipment. The revenue and percentages of revenue of the Company’s sales by product line were as follows for the periods indicated: Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % Shipping and Handling Costs and Revenues Shipping and freight costs are treated as fulfillment costs. For shipments to end-customers, the customer bears the shipping and freight costs and has control of the product upon shipment. For shipments to distributors, the distributor bears the shipping and freight costs, including insurance, tariffs and other import/export costs. |
Redeemable Preferred Stock and
Redeemable Preferred Stock and Stockholders' (Deficit) Equity | 3 Months Ended |
Mar. 31, 2020 | |
Temporary Equity And Equity [Abstract] | |
Redeemable Preferred Stock and Stockholders' (Deficit) Equity | Redeemable Preferred Stock The board of directors of Biolase (the “Board”), without further stockholder authorization, may from time to time authorize the issuance of up to 1,000,000 shares of the Company’s preferred stock. Of the 1,000,000 shares of preferred stock, 500,000 shares are designated as Series B Junior Participating Cumulative Preferred Stock. In 2019, the Company sold Series E Convertible Preferred Shares in a private offering and as of March 31, 2020 and December 31, 2019, 69,565 of these shares were issued and outstanding. The shares of Series E Preferred Stock automatically convert into shares of Common Stock upon receipt of the Requisite Stockholder Approval (as defined in the Certificate of Designations, Preferences and Rights of Series E Participating Convertible Preferred Stock. The shares of Series E Preferred Stock have no other conversion rights. The Purchase Agreement contains customary representations, warranties and covenants by the Company, customary indemnification obligations of the Company and the Investors, including for liabilities under the Securities Act, and other obligations of the parties. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to such agreement and may be subject to limitations agreed upon by the contracting parties. The shares of Series E Preferred Stock were offered in reliance upon exemptions from registration under the Securities Act afforded by Regulation D and corresponding provisions of state securities laws. The Company has agreed to use commercially reasonable efforts to file, within 30 days following receipt of the Requisite Stockholder Approval, a registration statement with the U.S. Securities and Exchange Commission to register the resale of the shares of Common Stock underlying the Series E Preferred Stock. Stock-Based Compensation 2002 Stock Incentive Plan The 2002 Stock Incentive Plan (as amended effective as of May 26, 2004, November 15, 2005, May 16, 2007, May 5, 2011, June 6, 2013, October 30, 2014, April 27, 2015, and May 6, 2016, the “2002 Plan”) was replaced by the 2018 Plan (as defined below) with respect to future equity awards. Persons eligible to receive awards under the 2002 Plan included officers, employees, and directors of the Company, as well as consultants. As of March 31, 2020, a total of approximately 3.1 million shares of the Company’s common stock have been authorized for issuance under the 2002 Plan, of which approximately 1.0 million shares of the Company’s common stock have been issued pursuant to options that were exercised and restricted stock units (“RSUs”) that were settled in common stock and 1.2 million shares of common stock have been reserved for outstanding options and unvested RSUs, and no shares are available for future grants. 2018 Stock Incentive Plan At the 2018 Annual Meeting, the Company’s stockholders approved the 2018 Long-Term Incentive Plan (as amended, the “2018 Plan”) which was amended by Amendment No. 1 to the 2018 Plan, approved by the Company’s stockholders at a special meeting on September 21, 2018 and Amendment No. 2 to the 2018 Plan, as approved by the Company’s stockholders on May 15, 2019. The purposes of the 2018 Plan are (i) to align the interests of the Company’s stockholders and recipients of awards under the 2018 Plan by increasing the proprietary interest of such recipients in the Company’s growth and success; (ii) to advance the interests of the Company by attracting and retaining non-employee directors, officers, other employees, consultants, independent contractors and agents; and (iii) to motivate such persons to act in the long-term best interests of the Company and its stockholders. Subject to the terms and conditions of the 2018 Plan, the number of shares authorized for grants under the 2018 Plan is 5.0 million. As of March 31, 2020, a total 2.3 million shares of the Company’s common stock have been reserved for outstanding options and unvested RSUs, and 0.8 million shares of the Company’s common stock remain available for future grants. The Company recognized stock-based compensation expense of $0.7 million and $0.8 million, for the three months ended March 31, 2020 and 2019, respectively, based on the grant-date fair value. The net impact of stock-based compensation expense to earnings was $(0.02), and $(0.04) per basic and diluted share for the three months ended March 31, 2020 and 2019, respectively. At March 31, 2020, the Company had approximately $1.1 million of total unrecognized compensation expense, net of estimated forfeitures, related to unvested share-based compensation arrangements. The Company expects that expense to be recognized over a weighted-average period of 1.5 years. The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 51 $ 82 Sales and marketing 210 160 General and administrative 425 441 Engineering and development 33 74 $ 719 $ 757 The stock option fair values were estimated using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2020 2019 Expected term 5.9 years 6.1 years Volatility 82.2 % 86.2 % Annual dividend per share $ — $ — Risk-free interest rate 1.25 % 2.64 % A summary of option activity for the three months ended March 31, 2020 is as follows (in thousands, except per share data): Weighted Weighted Average Remaining Average Contractual Aggregate Shares Exercise Price Term (Years) Intrinsic Value(1) Options outstanding, December 31, 2019 1,287 $ 5.77 $ — Granted at fair market value 20 $ 0.77 Exercised — $ — Forfeited, cancelled, or expired (32 ) $ 8.87 Options outstanding at March 31, 2020 1,275 $ 5.61 5.68 $ — Options exercisable at March 31, 2020 1,061 $ 6.35 5.11 $ — Vested options expired during the quarter ended March 31, 2020 17 $ 13.2 (1) The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of the grant. A summary of unvested stock option activity for the three months ended March 31, 2020 is as follows (in thousands, except per share data): Weighted Average Grant Shares Date Fair Value Unvested options at December 31, 2019 254 $ 1.44 Granted 20 $ 0.54 Vested (47 ) $ 1.63 Forfeited or cancelled (14 ) $ 2.61 Unvested options at March 31, 2020 213 $ 1.25 Cash proceeds, along with fair value disclosures related to grants, exercises and vested options are as follows (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019 Proceeds from stock options exercised $ — $ 3 Tax benefit related to stock options exercised (1) N/A N/A Intrinsic value of stock options exercised (2) $ — $ — Weighted-average fair value of options granted during period $ 0.54 $ 1.53 Total fair value of shares vested during the period $ 67 $ 342 (1) Excess tax benefits received related to stock option exercises are presented as operating cash inflows. The Company currently does not receive a tax benefit related to the exercise of stock options due to the Company’s net operating losses. (2) The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the strike price of the stock on the date of grant. Restricted Stock Units There were no material grants made during the three months ended March 31, 2020, and the Company canceled approximately 840,000 grants with performance based vesting due to non achievement of the performance targets. A summary of unvested RSU activity for the three months ended March 31, 2020 is as follows (in thousands, except per share amounts): Weighted Average Grant Shares Date Fair Value Unvested RSUs at December 31, 2019 3,564 $ 1.68 Granted 20 $ 0.38 Vested (416 ) $ 0.67 Forfeited or cancelled (840 ) $ 1.96 Unvested RSUs at March 31, 2020 2,328 1.63 Warrants The Company issues warrants to acquire shares of the Company’s common stock as approved by the Board. A summary of warrant activity for the three months ended March 31, 2020 is as follows (in thousands, except exercise price amounts): Weighted Average Shares Exercise Price Warrants outstanding, December 31, 2019 2,083 $ 6.12 Granted or Issued — $ — Exercised — $ — Forfeited, cancelled, or expired — $ — Warrants outstanding at March 31, 2020 2,083 $ 5.96 Warrants exercisable at March 31, 2020 2,083 $ 5.96 Vested warrants expired during the quarter ended March 31, 2020 — $ — See Note 9 for additional information on the Western Alliance Warrants, the SWK Warrants, and the DPG Warrants (each as defined below). Net Loss Per Share – Basic and Diluted Basic net loss per share is computed by dividing net loss available to common stockholders by the weighted-average number of shares of the Company’s common stock outstanding for the period. In computing diluted net loss per share, the weighted average number of shares outstanding is adjusted to reflect the effect of potentially dilutive securities. Outstanding stock options, RSUs and warrants to purchase approximately 3.4 million shares were not included in the calculation of diluted loss per share for the three months ended March 31, 2020, as their effect would have been anti-dilutive. For the same 2019 periods, anti-dilutive outstanding stock options and warrants to purchase 5.7 million shares were not included in the computation of diluted loss per share. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | NOTE 5—INVENTORY Inventory is valued at the lower of cost or net realizable value and is comprised of the following (in thousands): March 31, December 31, 2020 2019 Raw materials $ 4,465 $ 3,689 Work-in-process 1,475 1,064 Finished goods 6,252 6,242 Inventory $ 12,192 $ 10,995 Inventory has been reduced by estimates for excess and obsolete amounts totaling $1.3 million and $1.3 million as of March 31, 2020 and December 31, 2019, respectively. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Property, Plant, and Equipment | NOTE 6—PROPERTY, PLANT, AND EQUIPMENT Property, plant, and equipment, net is comprised of the following (in thousands): March 31, December 31, 2020 2019 Building $ 205 $ 209 Leasehold improvements 2,004 2,004 Equipment and computers 7,477 7,479 Furniture and fixtures 634 634 Construction in progress 34 27 Total 10,354 10,353 Accumulated depreciation and amortization (9,496 ) (9,322 ) Property, plant, and equipment, net before land 858 1,031 Land 159 162 Property, plant, and equipment, net $ 1,017 $ 1,193 Depreciation and amortization expense related to property, plant, and equipment totaled $0.2 million and $0.3 million for the three months ended March 31, 2020 and March 31, 2019, respectively. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 3 Months Ended |
Mar. 31, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets And Goodwill | NOTE 7—INTANGIBLE ASSETS AND GOODWILL The Company conducted its annual impairment test of goodwill as of June 30, 2019 and determined that there was no impairment. The Company also tests its intangible assets and goodwill between the annual impairment tests if events occur or circumstances change that would more likely than not reduce the fair value of the Company or its assets below their carrying amounts. For intangible assets subject to amortization, the Company performs its impairment test when indicators, such as reductions in demand or significant economic slowdowns, are present. Due to the uncertainty surrounding the impact of COVID-19 on the Company’s business, the Company performed an assessment at March 31, 2020 which resulted in no impairment required. Beyond the impact of COVID-19, no events have occurred since June 30, 2019 through the date of these unaudited consolidated financial statements that would trigger further impairment testing of the Company’s intangible assets and goodwill. As of March 31, 2020 and December 31, 2019, the Company had goodwill (indefinite life) of $2.9 million. As of March 31, 2020 and December 31, 2019, all intangible assets have been fully amortized and no amortization expense was recognized during the three months ended March 31, 2020 and 2019. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
Accrued Liabilities | NOTE 8—ACCRUED LIABILITIES Accrued liabilities are comprised of the following (in thousands): March 31, December 31, 2020 2019 Payroll and benefits $ 1,465 $ 1,726 Warranty accrual, current portion 911 865 Lease liability 140 323 Accrued professional services 443 330 Taxes 31 242 Accrued insurance premium 374 546 Other 715 712 Total accrued liabilities $ 4,079 $ 4,744 Changes in the initial product warranty accrual and the expenses incurred under the Company’s initial and extended warranties for the three months ended March 31, 2020 and 2019 are included within accrued liabilities on the Consolidated Balance Sheets and were as follows (in thousands): Three Months Ended March 31, 2020 2019 Balance, January 1 $ 1,110 $ 1,308 Provision for estimated warranty cost 203 239 Warranty expenditures (156 ) (163 ) Balance, March 31 1,157 1,384 Less warranty accrual, long-term 246 577 Total warranty accrual, current portion $ 911 $ 807 The Company’s Waterlase laser systems sold worldwide are covered by a warranty against defects in material and workmanship for a period of up to 16 months domestically and up to 28 months internationally, from the date of sale by the Company or a distributor to the end-user. The Company’s Diode systems sold worldwide are covered by a warranty against defects in material and workmanship for a period of up to 28 months from the date of sale by the Company or a distributor to the end-user. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 9—DEBT The following table presents the details of the principal outstanding and unamortized discount (in thousands): March 31, December 31, 2020 2019 Term loan $ 15,000 $ 15,000 Discount and debt issuance costs on term loan (1,438 ) (1,534 ) Total $ 13,562 $ 13,466 Lines of Credit Pacific Mercantile Bank On October 28, 2019, the Company entered into a loan and security agreement (the “Loan Agreement”) with Pacific Mercantile Bank, as lender (the “Lender”), which provides for a revolving line of credit (the “PMB Loan”) in a maximum principal amount not to exceed the lesser of (i) $3 million or (ii) the sum of 90% of the Eligible Accounts (as defined in the Loan Agreement) plus 75% of the Eligible Inventory (as defined in the Loan Agreement, and subject to certain limitations set forth therein); provided The Company’s obligations under the Loan Agreement are secured by a security interest in substantially all of the Company’s property. No borrowings may be made under the Loan Agreement unless and until Exim Bank agrees to guarantee the PMB Loan and the Company has entered into a borrower agreement with Exim Bank. Borrowings under the PMB Loan bear interest at a daily rate equal to the prime rate published in the Wall Street Journal provided The Loan Agreement requires the Company to maintain unrestricted cash at the Lender plus plus plus plus As of March 31, 2020 and December 31, 2019, the Company had no borrowings outstanding and unused availability under this credit facility of $3.0 million and $2.7 million, respectively. The Company was in compliance with all debt covenants at March 31, 2020. In April 2020, the Company drew $3.0 million under the PMB Loan. Additional information is discussed in Note 15 – Subsequent Events. Term Loan On November 9, 2018, the Company entered into a five-year secured Credit Agreement (“Credit Agreement”) with SWK Funding LLC (“SWK”), pursuant to which the Company has borrowed $12.5 million (“SWK Loan”). The Company’s obligations under the Credit Agreement are secured by substantially all of the Company’s assets. Under the terms of the Credit Agreement, repayment of the loan is interest-only for the first two years, paid quarterly with the option to extend the interest-only period. Principal repayments will begin in the first quarter of 2021 and will be approximately $0.7 million quarterly until the loan matures in the fourth quarter of 2023. The loan bears interest at the London Interbank Bank Offered Rate (“LIBOR”) plus 10% or another index that approximates LIBOR as close as possible if and when LIBOR no longer exists. Approximately $0.9 million of the proceeds from the SWK Loan were used to pay off all amounts owed to Western Alliance Bank under the business financing agreement entered into in 2018. The Credit Agreement contains financial and non-financial covenants requiring the Company to, among other things, (i) maintain unencumbered liquid assets of (A) no less than $1.5 million or (B) the sum of aggregate cash flow from operations less capital expenditures, (ii) achieve certain revenue and EBITDA levels during the first two years of the loan, (iii) limit future borrowing, investments and dividends, and (iv) submit monthly and quarterly financial reporting. In connection with the SWK Loan, the Company paid approximately $1.0 million in debt issuance costs, including a $0.2 million loan origination fee, a $0.4 million finder’s fee, and $0.4 million in legal and other fees. These costs were recognized as a discount on the SWK Loan and are being amortized on a straight-line basis over the loan term which approximates the effective-interest method. As of March 31, 2019, the Company was not in compliance with certain covenants in the Credit Agreement and in May 2019, SWK granted the Company a waiver of such covenants. On May 7, 2019, the Company and SWK agreed to amend the Credit Agreement (the “First Amendment) to increase the total commitment from $12.5 million to $15.0 million, and to revise the financial covenants to (a) adjust minimum revenue and EBITDA levels, (b) require the Company to have a shelf registration statement declared effective by the Securities and Exchange Commission before September 30, 2019, with a proposed maximum aggregate offering price of at least $10.0 million if the Company did not reach set minimum revenue levels for the three-month period ended September 30, 2019, and (c) require minimum liquidity of $1.5 million at all times. The First Amendment provided that if aggregate minimum revenue and EBITDA levels were not achieved by September 30, 2019, the minimum liquidity requirement would be increased to $3.0 million, until the Company has obtained additional equity or debt funding of no less than $5.0 million. In 2019, the Company obtained additional equity financing greater than $5.0 million. The Company borrowed the additional $2.5 million during the year ended December 31, 2019. In connection with the amendment, the Company paid to SWK loan origination and other fees of approximately $0.1 million payable in cash and approximately $0.2 million in additional SWK Warrants (as defined below) to purchase the Company’s common stock. The Company paid an additional finder’s fee to Deal Partners Group (“DPG”) of approximately $0.1 million in cash and $0.1 million in additional DPG Warrants to purchase the Company’s common stock. The Company accounted for the First Amendment as a modification to existing debt and as a result, recognized the amounts paid to SWK in cash and warrants as additional debt issuance costs. On September 30, 2019, BIOLASE, Inc entered into the Second Amendment to Credit Agreement (the “Second Amendment”) with SWK, in connection with that certain Credit Agreement, by and among the Company, SWK, and the lender parties thereto. The Second Amendment amended the Credit Agreement to provide for a permitted inventory and accounts receivable revolving loan facility, secured by a first lien security interest in the Company’s inventory and accounts receivable, with a maximum principal amount of $5 million and with such other material terms and conditions acceptable to SWK in its commercially reasonable discretion. In addition, SWK agreed to waive the effect of the Company’s non-compliance with certain unencumbered liquid assets financial operating covenants as set forth in the Credit Agreement, and SWK agreed to forbear from exercising rights and remedies otherwise available to it in the event of such non-compliance through October 31, 2019, or earlier in the event that an additional equity or subordinated debt financing is consummated with gross proceeds of not less than $5 million, or in the event of a default under the Credit Agreement. On November 6, 2019, the Company agreed to further amend the Credit Agreement. Pursuant to the Third Amendment, SWK granted the Company a waiver of the Company’s non-compliance with certain financial covenants in the Credit Agreement. Also pursuant to the Third Amendment, the Company and SWK agreed to (i) revise financial covenants to adjust minimum revenue and EBITDA levels and (ii) remove the automatic increase of the minimum liquidity requirement based on certain aggregate minimum revenue and EBITDA levels as of September 30, 2019 (which was added pursuant to the First Amendment). In connection with the Third Amendment, the Company consolidated the SWK Warrants issued to SWK on November 9, 2018 and May 7, 2019. The price was adjusted to $1.00 and the impact of this was de minimis. As of December 31, 2019, the Company was not in compliance with the covenants under the Credit Agreement, as amended, and on March 25, 2020, the Company agreed to further amend the Credit Agreement (“Fourth Amendment”). Pursuant to the Fourth Amendment to the Credit Agreement, SWK granted the Company a waiver of the Company’s non-compliance with certain financial covenants contained in the Credit Agreement through March 31, 2020. Also pursuant to the Fourth Amendment, the Company and SWK agreed to (i) revise financial covenants to adjust minimum revenue and EBITDA levels and (ii) revise the financial covenant with respect to required unencumbered liquid assets. The Company does not anticipate it will regain compliance with the financial covenants under the Credit Agreement by June 30, 2020 due to the uncertainty surrounding the impact of COVID-19 on its business. Therefore the Term Loan is classified as a current liability in the unaudited consolidated balance sheets. The Company recognized approximately $0.6 million and $0.5 million in interest expense for the three months ending March 31, 2020 and 2019, respectively. The weighted-average interest rate as of March 31, 2020 was 12.25%. Western Alliance Warrants On March 6, 2018, the Company issued to Western Alliance warrants (the “Original Western Alliance Warrants”) to purchase up to the number of shares of common stock equal to $120,000 divided by the applicable exercise price at the time such warrants are exercised. The Original Western Alliance Warrants are fully vested and exercisable. The initial exercise price of the warrants was $2.35 per share. On September 27, 2018, the Company entered into the Second Modification Agreement to amend the Original Business Financing Agreement. In connection with the Second Modification Agreement, the Original Western Alliance Warrants were terminated, and the Company issued new warrants (the “Western Alliance Warrants”) to purchase up to the number of shares of common stock equal to $120,000 divided by the exercise price of $2.13, which was the closing price of the Company’s common stock on September 27, 2018. The Western Alliance Warrants are immediately exercisable and expire on September 27, 2028. These warrants contain down-round features that require the Company to adjust the exercise price proportionately should the Company issue shares at a price per share less than the exercise price. SWK Warrants In connection with the Credit Agreement, the Company issued warrants to SWK (the “SWK Warrants”) on November 9, 2018, to purchase up to 372,023 shares of the Company’s common stock. The SWK Warrants are immediately exercisable and expire on November 9, 2026. The exercise price of the SWK Warrants is $1.34, which was the average closing price of the Company’s common stock for the ten trading days immediately preceding November 9, 2018. These warrants contain down-round features that require the Company to adjust the exercise price proportionately should the Company issue shares at a price per share less than the exercise price. The fair value of the SWK Warrants was estimated using the Black-Scholes option-pricing model with the following assumptions: expected term of 8 years; volatility of 81.79%; annual dividend per share of $0.00; and risk-free interest rate of 3.13%; and resulted in an estimated fair value of $0.4 million. In November 2019, these warrants were consolidated and the strike price was adjusted to $1.00, and in March 2020, the strike price was adjusted a second time to $0.49. The impact of both reprice events was de minimis to the unaudited consolidated financial statements. DPG Warrants In connection with the SWK Loan, the Company paid a finder’s fee to Deal Partners Group of $0.4 million cash and issued warrants to purchase up to 279,851 shares of common stock (the “DPG Warrants”). The DPG Warrants were issued on November 14, 2018, were exercisable immediately, and expire on November 9, 2026. The exercise price of the DPG Warrants is $1.34 which was the average closing price of the Company’s common stock for the ten trading days immediately preceding November 9, 2018. These warrants contain down-round features that require the Company to adjust the exercise price proportionately should the Company issue shares at a price per share less than the exercise price. The fair value of the DPG Warrants of $0.3 million was estimated using the Black Scholes option pricing model with the following assumptions: ex pected term of 8 years; volatility of 81.79%; annual dividend per share of $0.00; and risk-free interest rate of 3.13%. In November 2019, the exercise price of the DPG Warrants issued on November 9, 2018 was adjusted from $1.34 per share to $0.8767 per share and the exercise price of the DPG Warrants issued on May, 2019 was adjusted from $2.17 per share to $1.4197 per share. The impact of the reprice was de minimis to the unaudited consolidated financial statements. The value of both the SWK Warrants and the DPG Warrants was recognized as a discount on the SWK Loan and are being amortized on a straight-line basis which approximates the effective-interest method, over the loan term of five years. Additionally, based on the adoption of ASU 2017-11 in the fourth quarter of 2018, these warrants are classified as equity in the consolidated balance sheet as of March 31, 2020. The future minimum principal and interest payments as of March 31, 2020 are as follows (in thousands): Principal Interest (1) 2020 — 1,388 2021 2,100 1,793 2022 2,800 1,472 2023 10,100 2,455 Total future payments $ 15,000 $ 7,108 (1) estimated using LIBOR rates as at March 31, 2020 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Leases | NOTE 10— LEASES The Company enters into operating leases primarily for real estate, office equipment, and fleet vehicles. Lease terms generally range from one to five years, and often include options to renew for one year. On January 1, 2019, the Company adopted Topic 842, using the modified-retrospective approach as discussed in Note 2, and as a result recognized a right-of-use asset of approximately $0.8 million as adjusted for deferred rent at the date of adoption of $0.2 million, and a lease liability of approximately $1.0 million. No cumulative-effect adjustment to retained earnings was required upon adoption of Topic 842. Right-of-use assets are recorded in Prepaid and other assets and lease liabilities are included in Accrued liabilities or Other liabilities depending on whether they are current or noncurrent. Because the rate implicit in each lease is not readily determinable, the Company uses its incremental borrowing rate (“IBR”) to determine the present value of the lease payments and on the date of adoption, the Company determined its IBR to be 12.78%. This rate was based on the Company’s financing of the SWK Loan which is a collateralized loan, and was based on prevailing market rates during the fourth quarter of 2018. Information related to the Company’s right-of-use assets and related liabilities were as follows (in thousands): Three Months Ended, March 31, 2020 Cash paid for operating lease liabilities $ 192 Right-of-use assets obtained in exchange for new operating lease obligations — Weighted-average remaining lease term — Weighted-average discount rate 0.0 % The Company allocates lease cost amongst lease and non-lease components. The Company excludes short-term leases (those with lease terms of less than one year at inception) from the measurement of lease liabilities or right-of-use assets. Maturities of lease liabilities as of March 31, 2020 for leases that have commenced were as follows (in thousands): Due in 12 month period ended March 31, 2020 $ 138 2021 7 Thereafter — $ 145 Less imputed interest (5 ) Total lease liabilities $ 140 Current operating lease liabilities 140 Non-current lease liabilities — Total lease liabilities $ 140 As of March 31, 2020, right-of-use assets were $0.1 million and lease liabilities were $0.1 million. During the three months ended March 31, 2020, the Company entered into two new real property leases which will commence in July 1, 2020. The Company expects to recognize a right-of-use asset and an offsetting lease liability in the amount of $1.8 million in the unaudited consolidated balance sheet upon lease commencement. Future minimum rental commitments under lease agreements, as of March 31, 2020, with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands): Year Ended December 31, 2020 (nine months) $ 217 2021 448 2022 481 2023 492 2024 503 2025 and thereafter 462 Total future minimum lease obligations $ 2,603 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 11— COMMITMENTS AND CONTINGENCIES On April 24, 2012, CAO Group, Inc. (“CAO”) filed a lawsuit against BIOLASE in the District of Utah alleging that BIOLASE’s ezlase dental laser infringes on U.S. Patent No. 7,485,116 (the “116 Patent”). On September 9, 2012, CAO amended its complaint, adding claims for (1) business disparagement/injurious falsehood under common law and (2) unfair competition under 15 U.S.C. Section 1125(a). The additional claims stem from a press release that BIOLASE issued on April 30, 2012, which CAO claims contained false statements that are disparaging to CAO and its diode product. The amended complaint sought injunctive relief, treble damages, attorneys’ fees, punitive damages, and interest. Until January 24, 2018, this lawsuit was stayed in connection with United States Patent and Trademark Office proceedings relating to the 116 Patent, which proceedings ultimately culminated in a January 27, 2017 decision by the United States Court of Appeals for the Federal Circuit, affirming the findings of the Patent Trial and Appeal Board, which were generally favorable to the Company. On January 25, 2018, CAO moved for leave to file a second amended complaint to add certain claims, which filing the Company is not opposing. On January 23, 2018, CAO filed a lawsuit against BIOLASE in the Central District of California alleging that BIOLASE’s diode lasers infringe on U.S. Patent Nos. 8,337,097, 8,834,497, 8,961,040 On January 25, 2019 (the “Effective Date”), BIOLASE entered into a settlement agreement (the “Settlement Agreement”) with CAO. Pursuant to the Settlement Agreement, CAO agreed to dismiss with prejudice the lawsuits filed by CAO against the Company in April 2012 and January 2018. In addition, CAO granted to the Company and its affiliates a non-exclusive, non-transferable (except as provided in the Settlement Agreement), royalty-free, fully-paid, worldwide license to the licensed patents for use in the licensed products and agreed not to sue the Company, its affiliates or any of its manufacturers, distributors, suppliers or customers for use of the licensed patents in the licensed products, and the parties agreed to a mutual release of claims. The Company agreed (i) to pay to CAO, within five days of the Effective Date, $500,000 in cash, (ii) to issue to CAO, within 30 days of the Effective Date, 500,000 restricted shares of common stock of the Company (the “Stock Consideration”), and (iii) to pay to CAO, within 30 days of December 31, 2021, an amount in cash equal to the difference (if positive) between $1,000,000 and the value of the Stock Consideration on December 31, 2021. The Stock Consideration vests and becomes transferrable on December 31, 2021, subject to the terms of a restricted stock agreement to be entered into between the parties. The Company considered this a Type I subsequent event and recognized a $1.5 million contingent loss on patent litigation settlement in its statement of operations for the year ended December 31, 2018. In January 2019, the Company paid CAO $500,000 in cash. On January 31, 2019, the case was dismissed with prejudice. During the three-month period ended March 31, 2019, the Company recorded an additional loss on patent litigation of $0.2 million which represented the change in fair value of the restricted stock to be issued to CAO at March 31, 2019. Subsequent to March 31,2019, the Company reversed the additional loss commensurate with the fluctuations in the Company’s share price. As of March 31, 2020 and December 31, 2019, the accrued liability relating to this agreement was $1.0 million. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | NOTE 12—SEGMENT INFORMATION The Company currently operates in a single business segment. Management uses one measurement of profitability and does not segregate its business for internal reporting. For the three months ended March 31, 2020, sales to customers in the United States accounted for approximately 65% of net revenue and international sales accounted for approximately 35% of net revenue, respectively. No individual country, other than the United States, represented more than 10% of total net revenue during the three months ended March 31, 2020 or 2019. Net revenue by geographic location based on the location of customers was as follows (in thousands): Three Months Ended March 31, 2020 2019 United States $ 3,129 $ 6,116 International 1,654 4,210 $ 4,783 $ 10,326 Property, plant, and equipment by geographic location was as follows (in thousands): March 31, December 31, 2020 2019 United States $ 742 $ 908 International 275 285 $ 1,017 $ 1,193 |
Concentrations
Concentrations | 3 Months Ended |
Mar. 31, 2020 | |
Risks And Uncertainties [Abstract] | |
Concentrations | NOTE 13—CONCENTRATIONS Revenue from the Company’s products for the three months ended March 31, 2020 and 2019 are as follows (dollars in thousands): Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % No individual customer represented more than 10% of the Company’s revenue for the three months ended March 31, 2020 or 2019. The Company maintains its cash and cash equivalent accounts with established commercial banks. Such cash deposits periodically exceed the Federal Deposit Insurance Corporation insured limit. One individual customer represented more than 10% of the Company’s accounts receivable at March 31, 2020 and December 31, 2019. The Company currently purchases certain key components of its products from single suppliers. Although there are a limited number of manufacturers of these key components, management believes that other suppliers could provide similar key components on comparable terms. A change in suppliers, however, could cause delays in manufacturing and a possible loss of sales, which could adversely affect the Company’s business, results of operations and financial condition. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 14—INCOME TAXES The Company accounts for income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Management evaluates the need to establish a valuation allowance for deferred tax assets based upon the amount of existing temporary differences, the period in which they are expected to be recovered, and expected levels of taxable income. A valuation allowance to reduce deferred tax assets is established when it is “more likely than not” that some or all of the deferred tax assets will not be realized. Based on the Company’s net losses in prior years, management has determined that a full valuation allowance against the Company’s net deferred tax assets is appropriate. Accounting for uncertainty in income taxes prescribes a 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 and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has elected to classify interest and penalties as a component of its income tax provision. With respect to the liability for unrecognized tax benefits, including related estimates of penalties and interest, the Company did not record a liability for unrecognized tax benefits for the three months ended March 31, 2020 and 2019. The Company does not expect any changes to its unrecognized tax benefit for the next 12 months that would materially impact its consolidated financial statements. During the three months ended March 31, 2020 and March 31, 2019, the Company recorded an income tax benefit of $19,000 and a provision of $15,000, respectively, resulting in an effective tax rate of 0.2% and 0.3%, respectively. The income tax provisions for the three months ended March 31, 2020 and 2019 were calculated using the discrete year-to-date method. The effective tax rate differs from the statutory tax rate of 21% primarily due to the existence of valuation allowances against net deferred tax assets and current liabilities resulting from the estimated state income tax liabilities and foreign tax liability. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Event | NOTE 15—SUBSEQUENT EVENT Paycheck Protection Program Loan On April 14, 2020, Biolase, Inc., was granted a loan from Pacific Mercantile Bank in the aggregate amount of $2,980,000, pursuant to the Paycheck Protection Program under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan, which was in the form of a Note dated April 13, 2020 issued by the Company, matures on April 13, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on November 1, 2020. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire Loan amount for qualifying expenses. Under the terms of the PPP, amounts spent on authorized purchases over eight weeks after receiving the loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. Revolving Credit Facility In April 2020, the Company borrowed $3.0 million under the PMB Loan. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The unaudited consolidated financial statements include the accounts of BIOLASE and its wholly-owned subsidiaries and have been prepared on a basis consistent with the December 31, 2019 audited consolidated financial statements and include all material adjustments, consisting of normal recurring adjustments and the elimination of all material intercompany transactions and balances, necessary to fairly present the information set forth therein. These unaudited, interim, consolidated financial statements do not include all the footnotes, presentations, and disclosures normally required by accounting principles generally accepted in the United States of America (“GAAP”) for complete consolidated financial statements. The consolidated results of operations for the three months ended March 31, 2020 are not necessarily indicative of the results for the full year. The accompanying consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto for the year ended December 31, 2019, included in BIOLASE’s Annual Report on Form 10-K for the year ended December 31, 2019 filed with the Securities and Exchange Commission (the “SEC”) on March 30, 2020 (the “2019 Form 10-K”). |
Liquidity and Management's Plans | Liquidity and Management’s Plans The Company incurred a loss from operations and a net loss, and used cash in operating activities for the three months ended March 31, 2020. The Company’s recurring losses, level of cash used in operations, and need for additional capital, along with uncertainties surrounding the Company’s ability to raise additional capital, raise substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Fourth Amendment to the SWK Loan As of December 31, 2019, the Company was not in compliance with certain of its loan covenants under the Term Loan (as defined below). On March 25, 2020 the Company and SWK Funding, LLC entered into a Fourth Amendment to the Credit Agreement and granted the Company a waiver of such covenants through March 31, 2020. The Fourth Amendment included revisions to the financial covenants and to the warrant price for the SWK warrants. See Note 9 for additional information. Due to the uncertainty surrounding the Company’s continued inability to meet debt covenants in addition to the uncertainties surrounding the impact of COVID-19 on the Company’s business, the Company is not forecasting compliance with its debt covenants in the next twelve months and has classified the Term Loan with SWK Funding, LLC (the “Term Loan”) as a short-term liability. As of March 31, 2020, the Company had negative working capital of approximately $3.7 million. The Company’s principal sources of liquidity as of March 31, 2020 consisted of approximately $1.8 million in cash, cash equivalents and restricted cash and $4.7 million of accounts receivable, net. In order for the Company to continue operations beyond the next 12 months and be able to discharge its liabilities and commitments in the normal course of business, the Company must increase sales of its products, control or potentially reduce expenses and establish profitable operations in order to generate cash from operations or obtain additional funds when needed. Additional capital requirements may depend on many factors, including, among other things, the rate at which the Company’s business grows, the extent of the Company’s revenue from ventilator sales, the COVID-19 pandemic and the actions taken to contain it, demands for working capital, manufacturing capacity, and any acquisitions that the Company may pursue. From time to time, the Company could be required, or may otherwise attempt, to raise capital through either equity or debt offerings. The Company cannot provide assurance that it will be able to successfully enter into any such equity or debt financings in the future or that the required capital would be available on acceptable terms, if at all, or that any such financing activity would not be dilutive to its stockholders. COVID-19 Risk and Uncertainties and CARES Act Additionally, on January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally and on March 13, 2020, the United States declared a national emergency with respect to the coronavirus outbreak. This outbreak has severely impacted global economic activity, tax and many countries and many states in the United States have reacted to the outbreak by instituting quarantines, mandating business and school closures and restricting travel. These mandated business closures have included dental office closures in Europe and the United States for all but emergency procedures. Our salespeople have been unable to call on dental customers during these closures. In addition, most dental shows and workshops scheduled in the first and second quarters of 2020 have been canceled. There is no assurance that sales will return to normal levels during the second quarter of 2020 or at any time thereafter. However, the full impact of the COVID-19 outbreak continues to evolve and it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce and have taken actions to mitigate the impact including among other things, temporary reductions in pay, furloughs of certain positions along with deferrals in payment for cash preservation. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020. On March 27, 2020, President Trump signed into law the “Coronavirus Aid, Relief, and Economic Security (CARES) Act.” The CARES Act, among other things, includes provisions relating to refundable payroll tax credits, deferment of employer side social security payments, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations, increased limitations on qualified charitable contributions, and technical corrections to tax depreciation methods for qualified improvement property. We continue to examine the impact that the CARES Act may have on our business. Currently, we are unable to determine the impact that the CARES Act will have on our financial condition, results of operations, or liquidity. Paycheck Protection Program Loan (“PPP Loan”) On April 14, 2020, Biolase, Inc., was granted a loan from Pacific Mercantile Bank in the aggregate amount of $2,980,000.00, pursuant to the Paycheck Protection Program (the “PPP”) under Division A, Title I of the CARES Act, which was enacted March 27, 2020. The PPP Loan, which was in the form of a Note dated April 13, 2020 issued by the Company, matures on April 13, 2022 and bears interest at a rate of 1.0% per annum, payable monthly commencing on November 1, 2020. The Note may be prepaid by the Company at any time prior to maturity with no prepayment penalties. Funds from the PPP Loan may only be used for payroll costs, costs used to continue group health care benefits, mortgage payments, rent, utilities, and interest on other debt obligations incurred before February 15, 2020. The Company intends to use the entire PPP Loan amount for qualifying expenses. Under the terms of the PPP, certain amounts of the PPP Loan may be forgiven if they are used for qualifying expenses as described in the CARES Act. The application for these funds requires the Company to, in good faith, certify that the current economic uncertainty made the loan request necessary to support the ongoing operations of the Company. This certification further requires the Company to take into account our current business activity and our ability to access other sources of liquidity sufficient to support ongoing operations in a manner that is not significantly detrimental to the business. The receipt of these funds, and the forgiveness of the loan attendant to these funds, is dependent on the Company having initially qualified for the loan and qualifying for the forgiveness of such loan based on our future adherence to the forgiveness criteria. |
Use of Estimates | Use of Estimates The preparation of these consolidated financial statements in conformity with generally accepted accounting principles in the United States of America (“GAAP”) requires the Company to make estimates and assumptions that affect amounts reported in the consolidated financial statements and the accompanying notes. Significant estimates in these consolidated financial statements include allowances on accounts receivable, inventory, and deferred taxes, as well as estimates for accrued warranty expenses, goodwill and the ability of goodwill to be realized, revenue deferrals, effects of stock-based compensation and warrants, contingent liabilities, and the provision or benefit for income taxes. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may differ materially from those estimates. |
Critical Accounting Policies | Critical Accounting Policies Information with respect to the Company’s critical accounting policies, which management believes could have the most significant effect on the Company’s reported results and require subjective or complex judgments by management is contained in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of the 2019 Form 10-K. Management believes that there have been no significant changes during the three months ended March 31, 2020 in the Company’s critical accounting policies from those disclosed in Item 7 of the 2019 Form 10-K. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market (or, if none exists, the most advantageous market) for the specific asset or liability at the measurement date (referred to as the “exit price”). The fair value is based on assumptions that market participants would use, including a consideration of non-performance risk. Under the accounting guidance for fair value hierarchy, there are three levels of measurement inputs. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable, either directly or indirectly. Level 3 inputs are unobservable due to little or no corroborating market data. The Company’s financial instruments, consisting of cash, cash equivalents, restricted cash, accounts receivable, accounts payable, accrued liabilities, and the SWK Loan as discussed in Note 9, approximate fair value because of the nature of these items. |
Concentration of Credit Risk, Interest Rate Risk and Foreign Currency Exchange Rate | Concentration of Credit Risk, Interest Rate Risk and Foreign Currency Exchange Rate Financial instruments which potentially expose the Company to a concentration of credit risk consist principally of cash and cash equivalents, restricted cash, and trade accounts receivable. The Company maintains its cash and cash equivalents and restricted cash with established commercial banks. At times, balances may exceed federally insured limits. To minimize the risk associated with trade accounts receivable, management performs ongoing credit evaluations of customers’ financial condition and maintains relationships with the Company’s customers that allow management to monitor current changes in business operations so the Company can respond as needed. The Company does not, generally, require customers to provide collateral before it sells them its products. However, the Company has required certain distributors to make prepayments for significant purchases of products. Substantially all of the Company’s revenue is denominated in U.S. dollars, including sales to international distributors. Only a small portion of its revenue and expenses is denominated in foreign currencies, principally the Euro and Indian Rupee. The Company’s foreign currency expenditures primarily consist of the cost of maintaining offices, consulting services, and employee-related costs. During the three-month periods ended March 31, 2020 and 2019, the Company did not enter into any hedging contracts. Future fluctuations in the value of the U.S. dollar may affect the price competitiveness of the Company’s products outside the U.S. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board (the “FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined not to be applicable or are expected to have minimal impact on the Company’s consolidated financial position and results of operations. Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform. This ASU was issued because the London Interbank Offered Rate (LIBOR) is a benchmark interest rate referenced in a variety of agreements that are used by all types of entities. At the end of 2021, banks will no longer be required to report information that is used to determine LIBOR. As a result, LIBOR could be discontinued. Other interest rates used globally could also be discontinued for similar reasons. ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. Companies can apply the ASU immediately. However, the guidance will only be available for a limited time (generally through December 31, 2022). The Company is currently evaluating alternative benchmark rates to replace LIBOR and is still in the process of evaluating the impact that adopting this new accounting standard will have on its consolidated financial statements and related disclosures. In June 2016, the FASB issued ASU 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Revenue Recognition | REVENUE RECOGNITION Contracts with Customers Revenue for sales of products and services is derived from contracts with customers. The products and services promised in customer contracts include delivery of laser systems, imaging systems, and consumables as well as certain ancillary services such as training and extended warranties. Contracts with each customer generally state the terms of the sale, including the description, quantity and price of each product or service. Payment terms are stated in the contract and vary according to the arrangement. Because the customer typically agrees to a stated rate and price in the contract that does not vary over the life of the contract, the Company’s contracts do not contain variable consideration. The Company establishes a provision for estimated warranty expense. Performance Obligations At contract inception, the Company assesses the products and services promised in its contracts with customers. The Company then identifies performance obligations to transfer distinct products or services to the customers. In order to identify performance obligations, the Company considers all of the products or services promised in contracts regardless of whether they are explicitly stated or are implied by customary business practices. Revenue from products and services transferred to customers at a single point in time accounted for 74% and 84% of net revenue for the three months ended March 31, 2020 and March 31, 2019, respectively. The majority of the Company’s revenue recognized at a point in time is for the sale laser systems, imaging systems, and consumables. Revenue from these contracts is recognized when the customer is able to direct the use of and obtain substantially all of the benefits from the product which generally coincides with title transfer during the shipping process. Revenue from services transferred to customers over time accounted for 26% and 16% of net revenue for the three months ended March 31, 2020 and March 31, 2019, respectively. The majority of the Company’s revenue that is recognized over time relates to product training and extended warranties. Deferred revenue attributable to undelivered elements, which primarily consists of product training, totaled approximately $0.5 million and $0.6 million as of March 31, 2020 and December 31, 2019, respectively. Transaction Price Allocation The transaction price for a contract is allocated to each distinct performance obligation and recognized as revenue when, or as, each performance obligation is satisfied. For contracts with multiple performance obligations, the Company allocates the contract’s transaction price to each performance obligation using the best estimate of the standalone selling price of each distinct good or service in a contract. The primary method used to estimate standalone selling price is the observable price when the good or service is sold separately in similar circumstances and to similar customers. Significant Judgments Revenue is recorded for extended warranties over time as the customer benefits from the warranty coverage. This revenue will be recognized equally throughout the contract period as the customer receives benefits from the Company's promise to provide such services. Revenue is recorded for product training as the customer attends a training program or upon the expiration of the obligation, which is generally after nine months. The Company also has contracts that include both the product sales and product training as performance obligations. In those cases, the Company records revenue for product sales at the point in time when the product has been shipped. The customer obtains control of the product when it is shipped, as all shipments are made FOB shipping point, and after the customer selects its shipping method and pays all shipping costs and insurance. The Company has concluded that control is transferred to the customer upon shipment. Accounts Receivable Accounts receivable are stated at estimated net realizable value. The allowance for doubtful accounts is based on an analysis of customer accounts and the Company’s historical experience with accounts receivable write-offs. Contract Liabilities The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. The Company, however, recognizes a contract liability when a customer prepays for goods and/or services and the Company has not transferred control of the goods and/or services. The opening and closing balances of the Company’s contract liabilities are as follows (in thousands): March 31, December 31, 2020 2019 Undelivered elements (training, installation, product and support services) $ 476 $ 559 Extended warranty contracts 1,896 2,063 Total deferred revenue 2,372 2,622 Less long-term portion of deferred revenue 390 385 Total deferred revenue — long -term 390 385 Deferred revenue — current $ 1,982 $ 2,237 The balance of contract assets was immaterial as the Company did not have a significant amount of uninvoiced receivables at March 31, 2020 and December 31, 2019. The amount of revenue recognized during the three months ended March 31, 2020 that was included in the opening contract liability balance related to undelivered elements was $0.1 million and related to extended warranty contracts was $1.0 million. Disaggregation of Revenue The Company disaggregates revenue from contracts with customers into geographical regions and by the timing of when goods and services are transferred. The Company determined that disaggregating revenue into these categories depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by regional economic factors. The Company’s revenues related to the following geographic areas were as follows for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 United States $ 3,129 $ 6,116 International 1,654 4,210 $ 4,783 $ 10,326 Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue recognized over time $ 1,260 $ 1,698 Revenue recognized at a point in time 3,523 8,628 Total $ 4,783 $ 10,326 The Company’s sales by end market were as follows for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 End-customer $ 2,340 $ 6,346 Distributors 2,443 3,980 $ 4,783 $ 10,326 The Company acts as the principal in all its imaging equipment distribution sales. The Company takes possession and control of the equipment before they are sold and transferred to the customer. The Company provides the equipment and any related services directly to the customer. The Company has inventory risk before the equipment is transferred to a customer. The Company purchases and obtains the goods before obtaining a contract with a customer. The Company also has discretion in establishing the price sold to the customer for the equipment. The revenue and percentages of revenue of the Company’s sales by product line were as follows for the periods indicated: Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % Shipping and Handling Costs and Revenues Shipping and freight costs are treated as fulfillment costs. For shipments to end-customers, the customer bears the shipping and freight costs and has control of the product upon shipment. For shipments to distributors, the distributor bears the shipping and freight costs, including insurance, tariffs and other import/export costs. |
Income Tax Uncertainties | Accounting for uncertainty in income taxes prescribes a 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 and provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company has elected to classify interest and penalties as a component of its income tax provision. With respect to the liability for unrecognized tax benefits, including related estimates of penalties and interest, the Company did not record a liability for unrecognized tax benefits for the three months ended March 31, 2020 and 2019. The Company does not expect any changes to its unrecognized tax benefit for the next 12 months that would materially impact its consolidated financial statements. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Revenue Recognition [Abstract] | |
Summary of Opening and Closing Balances of Contract Liabilities | The Company performs its obligations under a contract with a customer by transferring products and/or services in exchange for consideration from the customer. The Company typically invoices its customers as soon as control of an asset is transferred and a receivable for the Company is established. The Company, however, recognizes a contract liability when a customer prepays for goods and/or services and the Company has not transferred control of the goods and/or services. The opening and closing balances of the Company’s contract liabilities are as follows (in thousands): March 31, December 31, 2020 2019 Undelivered elements (training, installation, product and support services) $ 476 $ 559 Extended warranty contracts 1,896 2,063 Total deferred revenue 2,372 2,622 Less long-term portion of deferred revenue 390 385 Total deferred revenue — long -term 390 385 Deferred revenue — current $ 1,982 $ 2,237 |
Summary of Disaggregation of Revenues Related to Geographic Areas | The Company’s revenues related to the following geographic areas were as follows for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 United States $ 3,129 $ 6,116 International 1,654 4,210 $ 4,783 $ 10,326 |
Summary of Revenues Disaggregated by Timing of Goods and Services Transferred | Information regarding revenues disaggregated by the timing of when goods and services are transferred is as follows (in thousands): Three Months Ended March 31, 2020 2019 Revenue recognized over time $ 1,260 $ 1,698 Revenue recognized at a point in time 3,523 8,628 Total $ 4,783 $ 10,326 |
Summary of Sales by End Market | The Company’s sales by end market were as follows for the periods indicated (in thousands): Three Months Ended March 31, 2020 2019 End-customer $ 2,340 $ 6,346 Distributors 2,443 3,980 $ 4,783 $ 10,326 |
Schedule of Revenue and Percentages of Revenue Sales by Product Line | The revenue and percentages of revenue of the Company’s sales by product line were as follows for the periods indicated: Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % Revenue from the Company’s products for the three months ended March 31, 2020 and 2019 are as follows (dollars in thousands): Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % |
Redeemable Preferred Stock an_2
Redeemable Preferred Stock and Stockholders' (Deficit) Equity (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Equity [Abstract] | |
Summary of Income Statement Classification of Compensation Expense | The following table summarizes the income statement classification of compensation expense associated with share-based payments (in thousands): Three Months Ended March 31, 2020 2019 Cost of revenue $ 51 $ 82 Sales and marketing 210 160 General and administrative 425 441 Engineering and development 33 74 $ 719 $ 757 |
Assumptions on Estimation of Stock Option Fair Values | The stock option fair values were estimated using the Black-Scholes option-pricing model with the following assumptions: Three Months Ended March 31, 2020 2019 Expected term 5.9 years 6.1 years Volatility 82.2 % 86.2 % Annual dividend per share $ — $ — Risk-free interest rate 1.25 % 2.64 % |
Summary of Option Activity | A summary of option activity for the three months ended March 31, 2020 is as follows (in thousands, except per share data): Weighted Weighted Average Remaining Average Contractual Aggregate Shares Exercise Price Term (Years) Intrinsic Value(1) Options outstanding, December 31, 2019 1,287 $ 5.77 $ — Granted at fair market value 20 $ 0.77 Exercised — $ — Forfeited, cancelled, or expired (32 ) $ 8.87 Options outstanding at March 31, 2020 1,275 $ 5.61 5.68 $ — Options exercisable at March 31, 2020 1,061 $ 6.35 5.11 $ — Vested options expired during the quarter ended March 31, 2020 17 $ 13.2 (1) The intrinsic value calculation does not include negative values. This can occur when the fair market value on the reporting date is less than the exercise price of the grant. |
Summary of Unvested Stock Option Activity | A summary of unvested stock option activity for the three months ended March 31, 2020 is as follows (in thousands, except per share data): Weighted Average Grant Shares Date Fair Value Unvested options at December 31, 2019 254 $ 1.44 Granted 20 $ 0.54 Vested (47 ) $ 1.63 Forfeited or cancelled (14 ) $ 2.61 Unvested options at March 31, 2020 213 $ 1.25 |
Cash Proceeds, Along With Fair Value Disclosures Related to Grants, Exercises and Vesting Options | Cash proceeds, along with fair value disclosures related to grants, exercises and vested options are as follows (in thousands, except per share amounts): Three Months Ended March 31, 2020 2019 Proceeds from stock options exercised $ — $ 3 Tax benefit related to stock options exercised (1) N/A N/A Intrinsic value of stock options exercised (2) $ — $ — Weighted-average fair value of options granted during period $ 0.54 $ 1.53 Total fair value of shares vested during the period $ 67 $ 342 (1) Excess tax benefits received related to stock option exercises are presented as operating cash inflows. The Company currently does not receive a tax benefit related to the exercise of stock options due to the Company’s net operating losses. (2) The intrinsic value of stock options exercised is the amount by which the market price of the stock on the date of exercise exceeded the strike price of the stock on the date of grant. |
Summary of Unvested Restricted Stock Units | A summary of unvested RSU activity for the three months ended March 31, 2020 is as follows (in thousands, except per share amounts): Weighted Average Grant Shares Date Fair Value Unvested RSUs at December 31, 2019 3,564 $ 1.68 Granted 20 $ 0.38 Vested (416 ) $ 0.67 Forfeited or cancelled (840 ) $ 1.96 Unvested RSUs at March 31, 2020 2,328 1.63 |
Summary of Warrant Activity | The Company issues warrants to acquire shares of the Company’s common stock as approved by the Board. A summary of warrant activity for the three months ended March 31, 2020 is as follows (in thousands, except exercise price amounts): Weighted Average Shares Exercise Price Warrants outstanding, December 31, 2019 2,083 $ 6.12 Granted or Issued — $ — Exercised — $ — Forfeited, cancelled, or expired — $ — Warrants outstanding at March 31, 2020 2,083 $ 5.96 Warrants exercisable at March 31, 2020 2,083 $ 5.96 Vested warrants expired during the quarter ended March 31, 2020 — $ — |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Components of Inventory | Inventory is valued at the lower of cost or net realizable value and is comprised of the following (in thousands): March 31, December 31, 2020 2019 Raw materials $ 4,465 $ 3,689 Work-in-process 1,475 1,064 Finished goods 6,252 6,242 Inventory $ 12,192 $ 10,995 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Property Plant And Equipment [Abstract] | |
Summary of Property, Plant, and Equipment | Property, plant, and equipment, net is comprised of the following (in thousands): March 31, December 31, 2020 2019 Building $ 205 $ 209 Leasehold improvements 2,004 2,004 Equipment and computers 7,477 7,479 Furniture and fixtures 634 634 Construction in progress 34 27 Total 10,354 10,353 Accumulated depreciation and amortization (9,496 ) (9,322 ) Property, plant, and equipment, net before land 858 1,031 Land 159 162 Property, plant, and equipment, net $ 1,017 $ 1,193 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Payables And Accruals [Abstract] | |
Components of Accrued Liabilities | Accrued liabilities are comprised of the following (in thousands): March 31, December 31, 2020 2019 Payroll and benefits $ 1,465 $ 1,726 Warranty accrual, current portion 911 865 Lease liability 140 323 Accrued professional services 443 330 Taxes 31 242 Accrued insurance premium 374 546 Other 715 712 Total accrued liabilities $ 4,079 $ 4,744 |
Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties | Changes in the initial product warranty accrual and the expenses incurred under the Company’s initial and extended warranties for the three months ended March 31, 2020 and 2019 are included within accrued liabilities on the Consolidated Balance Sheets and were as follows (in thousands): Three Months Ended March 31, 2020 2019 Balance, January 1 $ 1,110 $ 1,308 Provision for estimated warranty cost 203 239 Warranty expenditures (156 ) (163 ) Balance, March 31 1,157 1,384 Less warranty accrual, long-term 246 577 Total warranty accrual, current portion $ 911 $ 807 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Debt Disclosure [Abstract] | |
Summary of Principal Outstanding and Unamortized Discount | The following table presents the details of the principal outstanding and unamortized discount (in thousands): March 31, December 31, 2020 2019 Term loan $ 15,000 $ 15,000 Discount and debt issuance costs on term loan (1,438 ) (1,534 ) Total $ 13,562 $ 13,466 |
Summary of Future Minimum Principal and Interest Payments | The future minimum principal and interest payments as of March 31, 2020 are as follows (in thousands): Principal Interest (1) 2020 — 1,388 2021 2,100 1,793 2022 2,800 1,472 2023 10,100 2,455 Total future payments $ 15,000 $ 7,108 (1) estimated using LIBOR rates as at March 31, 2020 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Leases [Abstract] | |
Information related to Right-of-use Assets and Liabilities | Information related to the Company’s right-of-use assets and related liabilities were as follows (in thousands): Three Months Ended, March 31, 2020 Cash paid for operating lease liabilities $ 192 Right-of-use assets obtained in exchange for new operating lease obligations — Weighted-average remaining lease term — Weighted-average discount rate 0.0 % |
Schedule of Maturities of Lease Liabilities | Maturities of lease liabilities as of March 31, 2020 for leases that have commenced were as follows (in thousands): Due in 12 month period ended March 31, 2020 $ 138 2021 7 Thereafter — $ 145 Less imputed interest (5 ) Total lease liabilities $ 140 Current operating lease liabilities 140 Non-current lease liabilities — Total lease liabilities $ 140 |
Future minimum rental commitments under lease agreements with non-cancelable Operating Leases | Future minimum rental commitments under lease agreements, as of March 31, 2020, with non-cancelable terms greater than one year for each of the years ending December 31 are as follows (in thousands): Year Ended December 31, 2020 (nine months) $ 217 2021 448 2022 481 2023 492 2024 503 2025 and thereafter 462 Total future minimum lease obligations $ 2,603 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Segment Reporting [Abstract] | |
Summary of Net Revenue by Geographic Location | Net revenue by geographic location based on the location of customers was as follows (in thousands): Three Months Ended March 31, 2020 2019 United States $ 3,129 $ 6,116 International 1,654 4,210 $ 4,783 $ 10,326 |
Summary of Property, Plant and Equipment by Geographic Location | Property, plant, and equipment by geographic location was as follows (in thousands): March 31, December 31, 2020 2019 United States $ 742 $ 908 International 275 285 $ 1,017 $ 1,193 |
Concentrations (Tables)
Concentrations (Tables) | 3 Months Ended |
Mar. 31, 2020 | |
Risks And Uncertainties [Abstract] | |
Schedule of Revenue and Percentages of Revenue Sales by Product Line | The revenue and percentages of revenue of the Company’s sales by product line were as follows for the periods indicated: Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % Revenue from the Company’s products for the three months ended March 31, 2020 and 2019 are as follows (dollars in thousands): Three Months Ended March 31, 2020 2019 Laser systems $ 2,051 42.9 % $ 5,964 57.8 % Imaging systems — — % 552 5.3 % Consumables and other 1,472 30.8 % 2,112 20.5 % Services 1,260 26.3 % 1,695 16.4 % License fees and royalties — — % 3 — % Total revenue $ 4,783 100.0 % $ 10,326 100.0 % |
Description of Business and B_2
Description of Business and Basis of Presentation - Additional Information (Detail) - USD ($) | Apr. 14, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 | Dec. 31, 2018 |
Basis Of Presentation [Line Items] | |||||
Cash and cash equivalents, including restricted cash | $ 1,823,000 | $ 6,101,000 | $ 3,268,000 | $ 8,356,000 | |
Accounts receivable, net | 4,749,000 | $ 8,760,000 | |||
SWK Loan | |||||
Basis Of Presentation [Line Items] | |||||
Working capital | $ (3,700,000) | ||||
Pacific Mercantile Bank | Paycheck Protection Program | Subsequent Event | |||||
Basis Of Presentation [Line Items] | |||||
Loan granted amount from bank | $ 2,980,000 | ||||
Note issued date | Apr. 13, 2020 | ||||
Note maturity date | Apr. 13, 2022 | ||||
Note interest rate per annum | 1.00% | ||||
Note payable commencing date | Nov. 1, 2020 | ||||
Note prepayment penalties | $ 0 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Revenue Recognition [Abstract] | |||
Revenue from products and services transferred to customers, percentage | 74.00% | 84.00% | |
Revenue from services transferred to customers over time, percentage | 26.00% | 16.00% | |
Undelivered elements (product training, installation, product and support services) | $ 476 | $ 559 | |
Revenue recognized from contract liability | 100 | ||
Extended warranties recognized | $ 1,000 |
Summary of Opening and Closing
Summary of Opening and Closing Balances of Contract Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Revenue Recognition [Abstract] | ||
Undelivered elements (training, installation, product and support services) | $ 476 | $ 559 |
Extended warranty contracts | 1,896 | 2,063 |
Total deferred revenue | 2,372 | 2,622 |
Less long-term portion of deferred revenue | 390 | 385 |
Deferred revenue — current | $ 1,982 | $ 2,237 |
Summary of Disaggregation of Re
Summary of Disaggregation of Revenues Related to Geographic Areas (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 4,783 | $ 10,326 |
United States | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | 3,129 | 6,116 |
International | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 1,654 | $ 4,210 |
Summary of Revenues Disaggregat
Summary of Revenues Disaggregated by Timing of Goods and Services Transferred (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 4,783 | $ 10,326 |
Revenue Recognized Over Time | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | 1,260 | 1,698 |
Revenue Recognized at a Point in Time | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 3,523 | $ 8,628 |
Summary of Sales by End Market
Summary of Sales by End Market (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 4,783 | $ 10,326 |
End-customer | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | 2,340 | 6,346 |
Distributors | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 2,443 | $ 3,980 |
Schedule of Revenue and Percent
Schedule of Revenue and Percentages of Revenue Sales by Product Line (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 4,783 | $ 10,326 |
Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of sales | 100.00% | 100.00% |
Laser systems | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 2,051 | $ 5,964 |
Laser systems | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of sales | 42.90% | 57.80% |
Imaging systems | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 552 | |
Imaging systems | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of sales | 5.30% | |
Consumables and other | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 1,472 | $ 2,112 |
Consumables and other | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of sales | 30.80% | 20.50% |
Services | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 1,260 | $ 1,695 |
Services | Product Concentration Risk | Sales Revenue, Net | ||
Disaggregation Of Revenue [Line Items] | ||
Percentage of sales | 26.30% | 16.40% |
License fees and royalties | ||
Disaggregation Of Revenue [Line Items] | ||
Net revenue | $ 3 |
Redeemable Preferred Stock an_3
Redeemable Preferred Stock and Stockholders' (Deficit) Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Temporary Equity And Stockholders Equity [Line Items] | |||
Temporary equity preferred stock, shares authorized | 1,000,000 | 1,000,000 | |
Temporary equity preferred stock, shares issued | 70,000 | 70,000 | |
Temporary equity preferred stock, shares outstanding | 70,000 | 70,000 | |
Compensation expense related to stock options | $ 0.7 | $ 0.8 | |
Net impact of stock-based compensation expense to earnings per basic share | $ (0.02) | $ (0.04) | |
Net impact of stock-based compensation expense to earnings per diluted share | $ (0.02) | $ (0.04) | |
Total unrecognized compensation expense | $ 1.1 | ||
Unrecognized share based compensation expense to be recognized over weighted-average period | 1 year 6 months | ||
Outstanding stock options, RSUs and warrants excluded from diluted loss per share | 3,400,000 | 5,700,000 | |
Restricted Stock Units (RSUs) | |||
Temporary Equity And Stockholders Equity [Line Items] | |||
Granted | 0 | ||
Cancelled grants due to non achievement of performance targets | 840,000 | ||
2002 Stock Incentive Plan | |||
Temporary Equity And Stockholders Equity [Line Items] | |||
Common stock authorized for issuance | 3,100,000 | ||
Common stock issued pursuant to options exercised | 1,000,000 | ||
Options and restricted stock units outstanding | 1,200,000 | ||
Options available for future grants | 0 | ||
2018 Long-Term Incentive Plan | |||
Temporary Equity And Stockholders Equity [Line Items] | |||
Common stock authorized for issuance | 5,000,000 | ||
Options and restricted stock units outstanding | 2,300,000 | ||
Options available for future grants | 800,000 | ||
Maximum | |||
Temporary Equity And Stockholders Equity [Line Items] | |||
Temporary equity preferred stock, shares authorized | 1,000,000 | ||
Series B Junior Participating Preferred Stock [Member] | |||
Temporary Equity And Stockholders Equity [Line Items] | |||
Temporary equity preferred stock, shares authorized | 500,000 | ||
Private Placement | Series E Participating Convertible Preferred Stock | |||
Temporary Equity And Stockholders Equity [Line Items] | |||
Temporary equity preferred stock, shares issued | 69,565 | 69,565 | |
Temporary equity preferred stock, shares outstanding | 69,565 | 69,565 |
Classification of Compensation
Classification of Compensation Expense Associated with Share-Based Payments (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 719 | $ 757 |
Cost of Revenue | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 51 | 82 |
Sales and Marketing | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 210 | 160 |
General and Administrative | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | 425 | 441 |
Engineering and Development | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Allocated Share-based Compensation Expense | $ 33 | $ 74 |
Assumptions Used in Estimating
Assumptions Used in Estimating Fair Value of Stock Options Granted (Detail) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award Fair Value Assumptions And Methodology [Abstract] | ||
Expected term | 5 years 10 months 24 days | 6 years 1 month 6 days |
Volatility | 82.20% | 86.20% |
Risk-free interest rate | 1.25% | 2.64% |
Summary of Option Activity (Det
Summary of Option Activity (Detail) shares in Thousands | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Beginning Balance | shares | 1,287 |
Granted at fair market value | shares | 20 |
Forfeited, cancelled, or expired | shares | (32) |
Ending Balance | shares | 1,275 |
Options exercisable at March 31, 2020 | shares | 1,061 |
Vested options expired during the quarter ended March 31, 2020 | shares | 17 |
Weighted-Average Exercise Price | |
Beginning Balance | $ / shares | $ 5.77 |
Granted at fair market value | $ / shares | 0.77 |
Forfeited, cancelled, or expired | $ / shares | 8.87 |
Ending Balance | $ / shares | 5.61 |
Options exercisable at March 31, 2020 | $ / shares | 6.35 |
Vested options expired during the quarter ended March 31, 2020 | $ / shares | $ 13.2 |
Weighted-Average Remaining Contractual Term (Years) | |
Options outstanding | 5 years 8 months 4 days |
Options exercisable | 5 years 1 month 9 days |
Summary of Unvested Stock Optio
Summary of Unvested Stock Option Activity (Detail) - $ / shares shares in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Weighted Average Grant Date Fair Value | ||
Granted | $ 0.54 | $ 1.53 |
Stock Options | ||
Shares | ||
Beginning Balance | 254 | |
Granted | 20 | |
Vested | (47) | |
Forfeited or cancelled | (14) | |
Ending Balance | 213 | |
Weighted Average Grant Date Fair Value | ||
Beginning Balance | $ 1.44 | |
Granted | 0.54 | |
Vested | 1.63 | |
Forfeited or cancelled | 2.61 | |
Ending Balance | $ 1.25 |
Cash Proceeds Along with Fair V
Cash Proceeds Along with Fair Value Disclosures Related to Grants, Exercises and Vested Options (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | ||
Proceeds from stock options exercised | $ 3 | |
Weighted-average fair value of options granted during period | $ 0.54 | $ 1.53 |
Total fair value of shares vested during the period | $ 67 | $ 342 |
Summary of Unvested Restricted
Summary of Unvested Restricted Stock Units (Detail) - Restricted Stock Units (RSUs) | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Beginning Balance | shares | 3,564,000 |
Granted | shares | 20,000 |
Vested | shares | (416,000) |
Forfeited or cancelled | shares | (840,000) |
Ending Balance | shares | 2,328,000 |
Weighted Average Grant Date Fair Value | |
Unvested RSUs at December 31, 2019 | $ / shares | $ 1.68 |
Granted | $ / shares | 0.38 |
Vested | $ / shares | 0.67 |
Forfeited or cancelled | $ / shares | 1.96 |
Unvested RSUs at March 31, 2020 | $ / shares | $ 1.63 |
Summary of Warrant Activity (De
Summary of Warrant Activity (Detail) - Warrants shares in Thousands | 3 Months Ended |
Mar. 31, 2020$ / sharesshares | |
Shares | |
Beginning Balance | shares | 2,083 |
Ending Balance | shares | 2,083 |
Warrants exercisable at March 31, 2020 | shares | 2,083 |
Weighted Average Exercise Price | |
Beginning Balance | $ / shares | $ 6.12 |
Ending Balance | $ / shares | 5.96 |
Warrants exercisable at March 31, 2020 | $ / shares | $ 5.96 |
Components of Inventory (Detail
Components of Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Components of inventory, net of allowances | ||
Raw materials | $ 4,465 | $ 3,689 |
Work-in-process | 1,475 | 1,064 |
Finished goods | 6,252 | 6,242 |
Inventory | $ 12,192 | $ 10,995 |
Inventory - Additional Informat
Inventory - Additional Information (Detail) - USD ($) $ in Millions | Mar. 31, 2020 | Dec. 31, 2019 |
Inventory Disclosure [Abstract] | ||
Inventory reduced by estimate for excess and obsolete amount | $ 1.3 | $ 1.3 |
Summary of Property, Plant, and
Summary of Property, Plant, and Equipment (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment gross, excluding land | $ 10,354 | $ 10,353 |
Accumulated depreciation and amortization | (9,496) | (9,322) |
Property, plant, and equipment, net before land | 858 | 1,031 |
Land | 159 | 162 |
Property, plant, and equipment, net | 1,017 | 1,193 |
Building | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment gross, excluding land | 205 | 209 |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment gross, excluding land | 2,004 | 2,004 |
Equipment and Computers | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment gross, excluding land | 7,477 | 7,479 |
Furniture and Fixtures | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment gross, excluding land | 634 | 634 |
Construction in Progress | ||
Property Plant And Equipment [Line Items] | ||
Property, plant, and equipment gross, excluding land | $ 34 | $ 27 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Property Plant And Equipment [Abstract] | ||
Depreciation and amortization expenses | $ 0.2 | $ 0.3 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | ||||
Intangible assets and goodwill impairment | $ 0 | |||
Goodwill | $ 2,926,000 | $ 2,926,000 | ||
Amortization expense | $ 0 | $ 0 |
Components of Accrued Liabiliti
Components of Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | Mar. 31, 2019 |
Payables And Accruals [Abstract] | |||
Payroll and benefits | $ 1,465 | $ 1,726 | |
Warranty accrual, current portion | 911 | 865 | $ 807 |
Lease liability | 140 | 323 | |
Accrued professional services | 443 | 330 | |
Taxes | 31 | 242 | |
Accrued insurance premium | 374 | 546 | |
Other | 715 | 712 | |
Total accrued liabilities | $ 4,079 | $ 4,744 |
Changes in Initial Product Warr
Changes in Initial Product Warranty Accrual and Expenses Under Initial and Extended Warranties (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Movement in Standard Product Warranty Accrual | |||
Balance, January 1 | $ 1,110 | $ 1,308 | |
Provision for estimated warranty cost | 203 | 239 | |
Warranty expenditures | (156) | (163) | |
Balance, March 31 | 1,157 | 1,384 | |
Less warranty accrual, long-term | 246 | 577 | $ 245 |
Total warranty accrual, current portion | $ 911 | $ 807 | $ 865 |
Accrued Liabilities - Additiona
Accrued Liabilities - Additional Information (Detail) - Maximum | 3 Months Ended |
Mar. 31, 2020 | |
Diode Systems | |
Accrued Liabilities [Line Items] | |
Product warrant period | 28 months |
United States | Waterlase Laser Systems | |
Accrued Liabilities [Line Items] | |
Product warrant period | 16 months |
International | Waterlase Laser Systems | |
Accrued Liabilities [Line Items] | |
Product warrant period | 28 months |
Debt - Summary of Principal Out
Debt - Summary of Principal Outstanding and Unamortized Discount (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Term loan | $ 15,000 | $ 15,000 |
Discount and debt issuance costs on term loan | (1,438) | (1,534) |
Total | $ 13,562 | $ 13,466 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Oct. 28, 2019USD ($) | May 07, 2019USD ($) | Nov. 09, 2018USD ($)Day$ / sharesshares | Sep. 27, 2018USD ($)$ / shares | Mar. 31, 2020USD ($)$ / shares | Nov. 30, 2019$ / shares | Oct. 31, 2019$ / shares | Mar. 31, 2020USD ($)$ / shares | Mar. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Apr. 30, 2020USD ($) | Dec. 31, 2019USD ($) | May 31, 2019$ / shares | Mar. 06, 2018USD ($)$ / shares |
SWK Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants adjusted strike price | $ / shares | $ 0.49 | $ 1 | $ 1 | |||||||||||
Initial exercise price of warrants | $ / shares | $ 1.34 | |||||||||||||
Warrants issued to purchase shares of common stock | shares | 372,023 | |||||||||||||
Warrants expire date | Nov. 9, 2026 | |||||||||||||
Number of trading days of average closing price of common stock | Day | 10 | |||||||||||||
Warrants expiration period | 8 years | |||||||||||||
Warrants fair value assumptions, expected volatility rate | 81.79% | |||||||||||||
Warrants fair value assumptions annual dividend per share | $ / shares | $ 0 | |||||||||||||
Warrants fair value assumptions, risk-free interest rate | 3.13% | |||||||||||||
Warrants, estimated fair value | $ 400,000 | |||||||||||||
DPG Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Finder's fee | $ 400,000 | |||||||||||||
Initial exercise price of warrants | $ / shares | $ 1.34 | |||||||||||||
Warrants issued to purchase shares of common stock | shares | 279,851 | |||||||||||||
Warrants expire date | Nov. 9, 2026 | |||||||||||||
Number of trading days of average closing price of common stock | Day | 10 | |||||||||||||
Warrants expiration period | 8 years | |||||||||||||
Warrants fair value assumptions, expected volatility rate | 81.79% | |||||||||||||
Warrants fair value assumptions annual dividend per share | $ / shares | $ 0 | |||||||||||||
Warrants fair value assumptions, risk-free interest rate | 3.13% | |||||||||||||
Warrants, estimated fair value | $ 300,000 | |||||||||||||
DPG Warrants | Warrants Issued on November 9, 2018 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Initial exercise price of warrants | $ / shares | $ 1.34 | 0.8767 | $ 0.8767 | |||||||||||
DPG Warrants | Warrants Issued on May, 2019 | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Initial exercise price of warrants | $ / shares | $ 1.4197 | $ 1.4197 | $ 2.17 | |||||||||||
Original Western Alliance Warrant | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Initial exercise price of warrants | $ / shares | $ 2.35 | |||||||||||||
Western Alliance Warrant | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Initial exercise price of warrants | $ / shares | $ 2.13 | |||||||||||||
Warrants expire date | Sep. 27, 2028 | |||||||||||||
SWK Warrants and DPG Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants effective-interest method amortization period | 5 years | |||||||||||||
Credit Agreement, First Amendment | SWK Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Additional warrants to purchase common stock value | $ 200,000 | |||||||||||||
Credit Agreement, First Amendment | DPG Warrants | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Additional warrants to purchase common stock value | 100,000 | |||||||||||||
Additional finders fee | 100,000 | |||||||||||||
Maximum | Original Western Alliance Warrant | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants issued to purchase shares of common stock equal value | $ 120,000 | |||||||||||||
Maximum | Western Alliance Warrant | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Warrants issued to purchase shares of common stock equal value | $ 120,000 | |||||||||||||
Pacific Mercantile Bank | Subsequent Event | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit, outstanding borrowings | $ 3,000,000 | |||||||||||||
SWK Loan | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 12,500,000 | |||||||||||||
Line of credit facility term | 5 years | |||||||||||||
Borrowings under lines of credit | $ 12,500,000 | |||||||||||||
Debt instrument, repayment of interest-only on loan period | 2 years | |||||||||||||
Debt instrument, principal repayments beginning term | 2021 | |||||||||||||
Repayments of lines of credit | $ 700,000 | |||||||||||||
Debt instrument, maturity term | 2023 | |||||||||||||
Debt instrument covenant description | (i) maintain unencumbered liquid assets of (A) no less than $1.5 million or (B) the sum of aggregate cash flow from operations less capital expenditures, (ii) achieve certain revenue and EBITDA levels during the first two years of the loan, (iii) limit future borrowing, investments and dividends, and (iv) submit monthly and quarterly financial reporting. | |||||||||||||
Debt issuance costs | $ 1,000,000 | |||||||||||||
Loan origination fee | 200,000 | |||||||||||||
Finder's fee | 400,000 | |||||||||||||
Legal and other fees | $ 400,000 | |||||||||||||
Interest expense | $ 600,000 | $ 500,000 | ||||||||||||
Weighted-average interest rate | 12.25% | 12.25% | ||||||||||||
SWK Loan | LIBOR | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility interest rate description | London Interbank Bank Offered Rate (“LIBOR”) plus 10% or another index that approximates LIBOR as close as possible if and when LIBOR no longer exists. | |||||||||||||
Line of credit facility bearing floating interest rate per annum | 10.00% | |||||||||||||
SWK Loan | Credit Agreement, First Amendment | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | 15,000,000 | |||||||||||||
Debt instrument covenant description | (a) adjust minimum revenue and EBITDA levels, (b) require the Company to have a shelf registration statement declared effective by the Securities and Exchange Commission before September 30, 2019, with a proposed maximum aggregate offering price of at least $10.0 million if the Company did not reach set minimum revenue levels for the three-month period ended September 30, 2019, and (c) require minimum liquidity of $1.5 million at all times. The First Amendment provided that if aggregate minimum revenue and EBITDA levels were not achieved by September 30, 2019, the minimum liquidity requirement would be increased to $3.0 million, until the Company has obtained additional equity or debt funding of no less than $5.0 million. | |||||||||||||
Minimum level of liquidity financial covenant | 1,500,000 | |||||||||||||
Additional equity or debt funding requirement until minimum liquidity is met | 5,000,000 | $ 5,000,000 | ||||||||||||
Maximum aggregate offering price | 10,000,000 | |||||||||||||
Increase in minimum liquidity requirement if aggregate minimum revenue and EBITDA levels are not achieved | 3,000,000 | |||||||||||||
Financial covenant additional borrowings | 2,500,000 | |||||||||||||
Loan origination and other fees to be paid | $ 100,000 | |||||||||||||
SWK Loan | Credit Agreement, Second Amendment [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 5,000,000 | |||||||||||||
SWK Loan | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Debt instrument covenants unencumbered liquid assets | $ 1,500,000 | |||||||||||||
SWK Loan | Minimum | Credit Agreement, Second Amendment [Member] | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Gross proceeds from subordinated debt threshold limit | $ 5,000,000 | |||||||||||||
Western Alliance | Business Financing Agreement | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Repayments of lines of credit | $ 900,000 | |||||||||||||
Loan Agreement | Pacific Mercantile Bank | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, maximum borrowing capacity | $ 3,000,000 | |||||||||||||
Maximum borrowing base percentage of eligible accounts | 90.00% | |||||||||||||
Maximum borrowing base percentage of eligible inventory | 75.00% | |||||||||||||
Line of credit facility expiration date | Oct. 28, 2021 | |||||||||||||
Interest rate | 1.50% | |||||||||||||
Line of credit, outstanding borrowings | $ 0 | $ 0 | 0 | |||||||||||
Line of credit facility, unused availability | $ 3,000,000 | $ 3,000,000 | $ 2,700,000 | |||||||||||
Loan Agreement | Pacific Mercantile Bank | Subsequent Event | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility, current borrowing capacity | $ 3,000 | |||||||||||||
Loan Agreement | Pacific Mercantile Bank | Maximum | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Interest rate | 6.00% | |||||||||||||
Loan Agreement | Exim Bank | ||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||
Line of credit facility expiration date | Oct. 28, 2020 | |||||||||||||
Annual fee | $ 52,500 | |||||||||||||
Termination fee | $ 30,000 |
Debt - Summary of Future Minimu
Debt - Summary of Future Minimum Principal and Interest Payments (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |||
2021 | $ 2,100 | ||
2022 | 2,800 | ||
2023 | 10,100 | ||
Total future payments | 15,000 | $ 15,000 | |
2020 | [1] | 1,388 | |
2021 | [1] | 1,793 | |
2022 | [1] | 1,472 | |
2023 | [1] | 2,455 | |
Total future payments | [1] | $ 7,108 | |
[1] | estimated using LIBOR rates as at March 31, 2020 |
Leases - Additional Information
Leases - Additional Information (Detail) | Jan. 02, 2019USD ($) | Mar. 31, 2020USD ($)Lease | Jul. 01, 2020USD ($) | Dec. 31, 2019USD ($) | Jan. 01, 2019USD ($) |
Lessee Lease Description [Line Items] | |||||
Operating lease, options to renew term | 1 year | ||||
Lessee, Operating Lease, Existence of Option to Extend [true false] | true | ||||
Operating lease, right-of-use asset | $ 135,000 | $ 276,000 | |||
Operating lease, liability | $ 140,000 | ||||
Lessee, operating lease incremental borrowing rate | 12.78% | ||||
Operating lease, lease not yet commenced, description | the Company entered into two new real property leases which will commence in July 1, 2020. | ||||
Number of new real property leases | Lease | 2 | ||||
Scenario Forecast | |||||
Lessee Lease Description [Line Items] | |||||
Operating lease, right-of-use asset | $ 1,800,000 | ||||
Operating lease, liability | $ 1,800,000 | ||||
ASU 2016-02 | |||||
Lessee Lease Description [Line Items] | |||||
Operating lease, right-of-use asset | $ 800,000 | ||||
Operating Lease Right Of Use Asset Statement Of Financial Position Extensible List | us-gaap:PrepaidExpenseAndOtherAssetsCurrent | ||||
Adjustment for deferred rent | $ 200,000 | ||||
Operating Lease, Liability, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | ||||
Operating lease, liability | $ 1,000,000 | ||||
Cumulative-effect adjustment to retained earnings | $ 0 | ||||
Minimum | |||||
Lessee Lease Description [Line Items] | |||||
Lease term | 1 year | ||||
Maximum | |||||
Lessee Lease Description [Line Items] | |||||
Lease term | 5 years | ||||
Lease initial term of contract | 1 year |
Leases - Information related to
Leases - Information related to Right-of-use Assets and Liabilities (Detail) $ in Thousands | 3 Months Ended |
Mar. 31, 2020USD ($) | |
Leases [Abstract] | |
Cash paid for operating lease liabilities | $ 192 |
Weighted-average discount rate | 0.00% |
Leases - Schedule of Maturities
Leases - Schedule of Maturities of Lease Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 | $ 138 | |
2021 | 7 | |
Total lease payments | 145 | |
Less imputed interest | (5) | |
Total lease liabilities | 140 | |
Current operating lease liabilities | $ 140 | $ 323 |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Commitments Under Lease Agreements (Detail) $ in Thousands | Dec. 31, 2019USD ($) |
Leases [Abstract] | |
2020 (nine months) | $ 217 |
2021 | 448 |
2022 | 481 |
2023 | 492 |
2024 | 503 |
2025 and thereafter | 462 |
Total future minimum lease obligations | $ 2,603 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) | Jan. 25, 2019 | Jan. 31, 2019 | Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2019 |
Commitment And Contingencies [Line Items] | ||||||
Contingent loss on patent litigation settlement | $ (190,000) | |||||
Accrued liability | $ 4,079,000 | $ 4,744,000 | ||||
Settlement Agreement | Patent Litigation | ||||||
Commitment And Contingencies [Line Items] | ||||||
Settlement agreement date | January 25, 2019 | |||||
Number of days litigation settlement to be paid in cash | 5 days | |||||
Litigation settlement in cash | $ 500,000 | |||||
Number of days litigation settlement shares to be issued | 30 days | |||||
Litigation settlement share issued | 500,000 | |||||
Number of days litigation settlement to be paid in value of stock consideration | 30 days | |||||
Settlement agreement, terms | The Company agreed (i) to pay to CAO, within five days of the Effective Date, $500,000 in cash, (ii) to issue to CAO, within 30 days of the Effective Date, 500,000 restricted shares of common stock of the Company (the “Stock Consideration”), and (iii) to pay to CAO, within 30 days of December 31, 2021, an amount in cash equal to the difference (if positive) between $1,000,000 and the value of the Stock Consideration on December 31, 2021. | |||||
Litigation settlement amount in cash equal to difference between value of stock consideration | $ 1,000,000 | |||||
Contingent loss on patent litigation settlement | $ (1,500,000) | |||||
Payment for litigation settlement in cash | $ 500,000 | $ 200,000 | ||||
Accrued liability | $ 1,000,000 | $ 1,000,000 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) - Sales Revenue, Net - Customer | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Customer Concentration Risk | United States | ||
Segment Reporting Information [Line Items] | ||
Percentage of sales | 65.00% | |
Customer Concentration Risk | International | ||
Segment Reporting Information [Line Items] | ||
Percentage of sales | 35.00% | |
Geographic Concentration Risk | International | ||
Segment Reporting Information [Line Items] | ||
Number of customers which represented more than 10% of the Company's revenue | 0 | 0 |
Summary of Net Revenue by Geogr
Summary of Net Revenue by Geographic Location (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Segment Reporting Information [Line Items] | ||
Net revenue | $ 4,783 | $ 10,326 |
United States | ||
Segment Reporting Information [Line Items] | ||
Net revenue | 3,129 | 6,116 |
International | ||
Segment Reporting Information [Line Items] | ||
Net revenue | $ 1,654 | $ 4,210 |
Summary of Property, Plant and
Summary of Property, Plant and Equipment by Geographic Location (Detail) - USD ($) $ in Thousands | Mar. 31, 2020 | Dec. 31, 2019 |
Segment Reporting Information [Line Items] | ||
Property, plant, and equipment, net | $ 1,017 | $ 1,193 |
United States | ||
Segment Reporting Information [Line Items] | ||
Property, plant, and equipment, net | 742 | 908 |
International | ||
Segment Reporting Information [Line Items] | ||
Property, plant, and equipment, net | $ 275 | $ 285 |
Concentrations - Summary of Net
Concentrations - Summary of Net Revenue from Various Products (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Concentration Risk [Line Items] | ||
Net revenue | $ 4,783 | $ 10,326 |
Product Concentration Risk | Sales Revenue, Net | ||
Concentration Risk [Line Items] | ||
Percentage of sales | 100.00% | 100.00% |
Laser systems | ||
Concentration Risk [Line Items] | ||
Net revenue | $ 2,051 | $ 5,964 |
Laser systems | Product Concentration Risk | Sales Revenue, Net | ||
Concentration Risk [Line Items] | ||
Percentage of sales | 42.90% | 57.80% |
Imaging systems | ||
Concentration Risk [Line Items] | ||
Net revenue | $ 552 | |
Imaging systems | Product Concentration Risk | Sales Revenue, Net | ||
Concentration Risk [Line Items] | ||
Percentage of sales | 5.30% | |
Consumables and other | ||
Concentration Risk [Line Items] | ||
Net revenue | $ 1,472 | $ 2,112 |
Consumables and other | Product Concentration Risk | Sales Revenue, Net | ||
Concentration Risk [Line Items] | ||
Percentage of sales | 30.80% | 20.50% |
Services | ||
Concentration Risk [Line Items] | ||
Net revenue | $ 1,260 | $ 1,695 |
Services | Product Concentration Risk | Sales Revenue, Net | ||
Concentration Risk [Line Items] | ||
Percentage of sales | 26.30% | 16.40% |
License fees and royalties | ||
Concentration Risk [Line Items] | ||
Net revenue | $ 3 |
Concentrations - Additional Inf
Concentrations - Additional Information (Detail) - Product Concentration Risk - Customer | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | Dec. 31, 2019 | |
Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Number of customers which represented more than 10% of the Company's revenue | 0 | 0 | |
Concentration Risk Percentage | 100.00% | 100.00% | |
Account Receivable | |||
Concentration Risk [Line Items] | |||
Number of customers which represented more than 10% of the Company's accounts receivable | 1 | 1 | |
Minimum | Sales Revenue, Net | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 10.00% | 10.00% | |
Minimum | Account Receivable | |||
Concentration Risk [Line Items] | |||
Concentration Risk Percentage | 10.00% | 10.00% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2020 | Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Liability for unrecognized tax benefit, including related estimates of penalties and interest | $ 0 | $ 0 |
Income tax provision (benefit) | $ (19,000) | $ 15,000 |
Projected annual effective tax rate | 0.20% | 0.30% |
Statutory tax rate | 21.00% |
Subsequent Event - Additional I
Subsequent Event - Additional Information (Detail) - Pacific Mercantile Bank - Subsequent Event - USD ($) | Apr. 14, 2020 | Apr. 30, 2020 |
Subsequent Event [Line Items] | ||
Line of credit, outstanding borrowings | $ 3,000,000 | |
Paycheck Protection Program | ||
Subsequent Event [Line Items] | ||
Loan granted amount from bank | $ 2,980,000 | |
Note issued date | Apr. 13, 2020 | |
Note maturity date | Apr. 13, 2022 | |
Note interest rate per annum | 1.00% | |
Note payable commencing date | Nov. 1, 2020 | |
Note prepayment penalties | $ 0 | |
Paycheck Protection Program | Minimum | ||
Subsequent Event [Line Items] | ||
Number of days eligible for deduction of qualifying expenses after receiving loan | 56 days |