Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Jul. 16, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | ENERGY FOCUS, INC/DE | |
Entity Central Index Key | 0000924168 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 12,370,030 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 3,861 | $ 6,335 |
Trade accounts receivable, less allowances of $59 and $33, respectively | 2,386 | 2,201 |
Inventories, net | 8,251 | 8,058 |
Prepaid and other current assets | 573 | 1,094 |
Total current assets | 15,071 | 17,688 |
Property and equipment, net | 510 | 610 |
Operating lease right-of-use assets | 1,682 | |
Restructured lease, right-of-use asset | 563 | |
Other assets | 213 | 194 |
Total assets | 18,039 | 18,492 |
Current liabilities: | ||
Accounts payable | 2,255 | 3,606 |
Accrued liabilities | 25 | 73 |
Accrued legal and professional fees | 117 | 160 |
Accrued payroll and related benefits | 346 | 435 |
Accrued sales commissions | 115 | 115 |
Accrued severance | 215 | 188 |
Accrued restructuring | 36 | 156 |
Accrued warranty reserve | 352 | 258 |
Deferred revenue | 13 | 30 |
Operating lease liabilities | 521 | |
Restructured lease liabilities | 400 | |
Finance Lease, Liability, Current | 3 | 0 |
Credit line borrowings | 1,757 | 2,219 |
Convertible notes | 1,660 | 0 |
Total current liabilities | 7,815 | 7,240 |
Other liabilities | 30 | 200 |
Operating lease liabilities | 1,346 | |
Restructured lease liabilities | 410 | |
Finance lease liabilities | 5 | |
Total liabilities | 9,606 | 7,440 |
STOCKHOLDERS' EQUITY | ||
Preferred stock, par value $0.0001 per share: Authorized: 2,000,000 shares in 2017 and 2016, Issued and outstanding: no shares in 2016 and 2015 | 0 | 0 |
Common stock, par value $0.0001 per share: Authorized: 30,000,000 shares in 2017 and 2016, Issued and outstanding: 11,690,030 at September 30, 2016 and 11,648,978 at December 31, 2015 | 1 | 1 |
Additional paid-in capital | 128,799 | 128,367 |
Accumulated other comprehensive loss | (1) | (1) |
Accumulated deficit | (120,366) | (117,315) |
Total stockholders' equity | 8,433 | 11,052 |
Total liabilities and stockholders' equity | $ 18,039 | $ 18,492 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Trade accounts receivable, allowances | $ 59 | $ 33 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 2,000,000 | 2,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 30,000,000 | 30,000,000 |
Common stock, shares issued | 12,191,120 | 12,090,695 |
Common stock, shares outstanding | 12,191,120 | 12,090,695 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement [Abstract] | ||
Net sales | $ 3,177 | $ 4,659 |
Cost of sales | 3,079 | 3,843 |
Gross profit | 98 | 816 |
Operating expenses: | ||
Product development | 526 | 629 |
Selling, general, and administrative | 2,241 | 2,647 |
Restructuring | 134 | (50) |
Total operating expenses | 2,901 | 3,226 |
Loss from operations | (2,803) | (2,410) |
Other expenses (income): | ||
Interest expense | 43 | 1 |
Other expenses (income) | 19 | (21) |
Loss from operations before income taxes | (2,865) | (2,390) |
Provision for income taxes | 0 | 0 |
Net loss | $ (2,865) | $ (2,390) |
Net loss per share - basic and diluted (in dollars per share) | $ (0.24) | $ (0.20) |
Weighted average shares used in computing net loss per share: | ||
Basic and diluted (in shares) | 12,126 | 11,900 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net loss | $ (2,865) | $ (2,390) |
Other comprehensive income: | ||
Foreign currency translation adjustments | 0 | 1 |
Comprehensive loss | $ (2,865) | $ (2,389) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit |
Balance at the beginning of the period (in shares) at Dec. 31, 2017 | 11,869 | ||||
Balance at the beginning of the period at Dec. 31, 2017 | $ 19,292 | $ 1 | $ 127,493 | $ 2 | $ (108,204) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under employee stock option and stock purchase plans (in shares) | 74 | ||||
Issuance of common stock under employee stock option and stock purchase plans | 0 | ||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units (in shares) | (12) | ||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | (32) | (32) | |||
Stock-based compensation | 195 | 195 | |||
Foreign currency translation adjustments | 1 | 1 | |||
Net loss from continuing operations | (2,390) | (2,390) | |||
Balance at the end of the period (in shares) at Mar. 31, 2018 | 11,931 | ||||
Balance at the end of the period at Mar. 31, 2018 | 17,066 | $ 1 | 127,656 | 3 | (110,594) |
Balance at the beginning of the period (in shares) at Dec. 31, 2018 | 12,091 | ||||
Balance at the beginning of the period at Dec. 31, 2018 | 11,052 | $ 1 | 128,367 | (1) | (117,315) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under employee stock option and stock purchase plans (in shares) | 150 | ||||
Issuance of common stock under employee stock option and stock purchase plans | 0 | 0 | |||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units (in shares) | (50) | ||||
Common stock withheld in lieu of income tax withholding on vesting of restricted stock units | (111) | (111) | |||
Stock-based compensation | 543 | 543 | |||
Foreign currency translation adjustments | 0 | ||||
Net loss from continuing operations | (2,865) | (2,865) | |||
Balance at the end of the period (in shares) at Mar. 31, 2019 | 12,191 | ||||
Balance at the end of the period at Mar. 31, 2019 | $ 8,433 | $ 1 | $ 128,799 | $ (1) | $ (120,366) |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (2,865) | $ (2,390) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation | 105 | 151 |
Stock-based compensation | 543 | 195 |
Provision for doubtful accounts receivable | 26 | (22) |
Provision for slow-moving and obsolete inventories and valuation reserves | (836) | (487) |
Provision for warranties | 101 | 7 |
Amortization of loan origination fees | (20) | 0 |
Gain on dispositions of property and equipment | (1) | (19) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (210) | 66 |
Inventories | 643 | 597 |
Prepaid and other assets | 459 | (274) |
Accounts payable | (1,329) | 1,398 |
Accrued and other liabilities | (195) | 13 |
Deferred revenue | (17) | 22 |
Total adjustments | (691) | 1,647 |
Net cash used in operating activities | (3,556) | (743) |
Cash flows from investing activities: | ||
Acquisitions of property and equipment | (5) | (57) |
Proceeds from the sale of property and equipment | 1 | 244 |
Net cash (used in) provided by investing activities | (4) | 187 |
Cash flows from financing activities: | ||
Common stock withheld to satisfy income tax withholding on vesting of restricted stock units | (111) | (32) |
Principal payments under finance lease obligations | (1) | 0 |
Proceeds from convertible notes | 1,660 | 0 |
Net repayments on credit line borrowings | (462) | 0 |
Net cash provided by (used in) financing activities | 1,086 | (32) |
Effect of exchange rate changes on cash | 0 | (1) |
Net decrease in cash and cash equivalents | (2,474) | (589) |
Cash and cash equivalents, beginning of period | 6,335 | 10,761 |
Cash and cash equivalents, end of period | 3,861 | 10,172 |
Classification of cash and cash equivalents: | ||
Cash and cash equivalents, end of period | $ 6,335 | $ 10,761 |
Nature of Operations
Nature of Operations | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure Text Block [Abstract] | |
Nature of Operations | NATURE OF OPERATIONS Energy Focus, Inc. and its subsidiary engage in the design, development, manufacturing, marketing and sale of energy-efficient lighting systems. We develop, market and sell high quality energy-efficient light-emitting diode (“LED”) lighting products in the commercial and military markets. Our mission is to enable our customers to run their facilities with greater energy efficiency, productivity, and wellness through advanced LED retrofit solutions. Our goal is to be the retrofit technology and market leader for the most demanding applications where performance, quality and health really matter. We specialize in LED lighting retrofit by replacing fluorescent lamps in institutional buildings and high-intensity discharge (“HID”) lighting in low-bay and high-bay applications with our innovative, high-quality commercial and military tubular LED (“TLED”) and other LED products. Product development is a key focus for us. Our product development team is dedicated to developing and designing leading-edge technology LED lighting products. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary Energy Focus LED Solutions, LLC, which is not active. Unless indicated otherwise, the information in the accompanying financial statements and notes to the unaudited condensed consolidated financial statements relates to our continuing operations. We have prepared the accompanying financial data for the three months ended March 31, 2019 and 2018 pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Report”). The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to present fairly our Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 , Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018 , Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2019 and 2018 , Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2019 and 2018, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 . Other than the adoption of the new lease accounting standard, there have been no other material changes to our significant accounting policies, as compared to those described in our 2018 Annual Report. Use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may vary from the estimates. Estimates include, but are not limited to, the establishment of reserves for accounts receivable, sales returns, inventory obsolescence and warranty claims; the useful lives of property and equipment; valuation allowance for net deferred taxes; the cost and offsetting income related to subleased property; and stock-based compensation. In addition, estimates and assumptions associated with the determination of the fair value of financial instruments and evaluation of long-lived assets for impairment requires considerable judgment. Actual results could differ from those estimates and such differences could be material. Reclassifications Certain amounts related to warranty accruals and settlements were reclassified to conform to current period reporting presentation with no impact on financial position, loss from operations or cash used in operations. Certain risks and concentrations We have certain customers whose net sales individually represented 10 percent or more of our total net sales, or whose net trade accounts receivable balance individually represented 10 percent or more of our total net trade accounts receivable, as follows: For the three months ended March 31, 2019 , sales to our primary distributor for the U.S. Navy, a shipbuilder for the U.S. Navy, and a regional commercial lighting retrofit company located in Texas accounted for approximately 22 percent , 10 percent , and 30 percent of net sales, respectively. When sales to our primary distributor for the U.S. Navy are combined with sales to a shipbuilder for the U.S. Navy, total sales of products for the U.S. Navy comprised approximately 32 percent of net sales for the same period. For the three months ended March 31, 2018 , sales to our primary distributor for the U.S. Navy accounted for approximately 46 percent of net sales for the period. When combined with sales to a shipbuilder for the U.S. Navy, sales of products for the U.S. Navy comprised approximately 50 percent of net sales for the same period. Additionally, a regional commercial lighting retrofit company located in California accounted for approximately 10 percent of net sales for the three months ended March 31, 2018. A regional commercial lighting retrofit company located in Texas, our primary distributor for the U.S. Navy, and a primary shipbuilder for the U.S. Navy, accounted for approximately 34 percent , 19 percent , and 14 percent of net trade accounts receivable, respectively, at March 31, 2019 . At December 31, 2018 , our primary distributor for the U.S. Navy accounted for approximately 40 percent of net trade accounts receivable. Recent accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles--Goodwill and Other--Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs in a cloud computing service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. This standard will be effective for interim and annual periods beginning after December 15, 2019. We do not expect the adoption of this guidance to have a significant impact on our financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which significantly changes the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables, and requires an entity to recognize an allowance based on its estimate of expected credit losses rather than incurred losses. This standard will be effective for interim and annual periods beginning after December 15, 2019, and will generally require adoption on a modified retrospective basis. We are in the process of evaluating the impact of the standard. Adoption of recent accounting pronouncement In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which supersedes the current lease accounting requirements. Additionally, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which simplifies adoption of Topic 842 by allowing an additional transition method that will not require restatement of prior periods and providing a new practical expedient for lessors to avoid separating lease and non-lease components within a contract if certain criteria are met (provisions of which must be elected upon adoption of Topic 842). The new standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. It also requires lessees to disclose certain key information about lease transactions. Upon implementation, an entity’s lease payment obligations will be recognized at their estimated present value along with a corresponding right-of-use asset. Lease expense recognition will be generally consistent with current practice. The Company adopted this guidance as of January 1, 2019 using the required modified retrospective method with the non-comparative transition option. The Company applied the transitional package of practical expedients allowed by the standard to not reassess the identification, classification and initial direct costs of leases commencing before this ASU’s effective date. The Company also applied the lease term and impairment hindsight transitional practical expedients. The Company has chosen to apply the following accounting policy practical expedients: to not separate lease and non-lease components to new leases as well as existing leases through transition; and the election to not apply recognition requirements of the guidance to short-term leases. The results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with legacy generally accepted accounting principles. On adoption, we recognized additional operating lease liabilities of approximately $2.9 million , with corresponding right-of-use assets based on the present value of the remaining minimum rental payments under prior leasing standards for our existing operating leases. The operating lease right-of-use assets recorded upon adoption were offset by the carrying value of liabilities previously recorded under Topic 420 and impairment charges totaling $ 273 thousand and $186 thousand , respectively. Refer to Note 6, “Leases” below for additional disclosures relating to the Company’s leasing arrangements. Revenue On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , as amended by subsequently issued additional guidance (together, “ASC 606”) using the modified retrospective method. The adoption of ASC 606 did not have a material impact on our consolidated financial position or results of operations, as our revenue arrangements generally consist of a single performance obligation to transfer promised goods at a fixed price. Net sales include revenues from sales of products and shipping and handling charges, net of estimates for product returns. Revenue is measured at the amount of consideration we expect to receive in exchange for the transferred products. We recognize revenue at the point in time when we transfer the promised products to the customer and the customer obtains control over the products. We recognize revenue for shipping and handling charges at the time the goods are shipped to the customer, and the costs of outbound freight are included in cost of sales, as we have elected the practical expedient included in ASC 606. We provide for product returns based on historical return rates. While we incur costs for sales commissions to our sales employees and outside agents, we recognize commission costs concurrent with the related revenue, as the amortization period is less than one year and we have elected the practical expedient included in ASC 606. We do not incur any other incremental costs to obtain contracts with our customers. Our product warranties are assurance-type warranties, which promise the customer that the products are as specified in the contract. Therefore, the product warranties are not a separate performance obligation and are accounted for as described below. Sales taxes assessed by governmental authorities are accounted for on a net basis and are excluded from net sales. The following table provides a disaggregation of product net sales for the periods presented (in thousands): Three months ended 2019 2018 Net sales: Commercial 1,983 2,205 Military 1,194 2,454 Total net sales $ 3,177 $ 4,659 Accounts Receivable Our trade accounts receivable consists of amounts billed to and currently due from customers. Credit is extended to customers based upon an evaluation of the customer’s financial condition and the amounts due are stated at their estimated net realizable value. We maintain an allowance for doubtful accounts receivable to provide for the estimated amount of receivables that will not be collected. The allowance is based on an assessment of customer creditworthiness and historical payment experience, the age of outstanding receivables, and performance guarantees to the extent applicable. Past due amounts are written off when our internal collection efforts have been unsuccessful. Our standard payment terms with customers are net 30 days, and we do not generally offer extended payment terms to our customers, but exceptions are made in some cases to major customers or with particular orders. Accordingly, we do not adjust trade accounts receivable for the effects of financing, as we expect the period between the transfer of product to the customer and the receipt of payment from the customer to be in line with our standard payment terms. Geographic information Approximately 97 percent of our long-lived fixed assets are located in the United States, with the remainder located in our product development center in Taiwan. Net sales attributable to customers outside the United States accounted for less than one percent and approximately one percent of our net sales for the three months ended March 31, 2019 and 2018 , respectively. The geographic location of our net sales is derived from the destination to which we ship the product. Net loss per share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares upon the exercise of stock options or release of restricted stock units unless the effect would be anti-dilutive. As a result of the net loss we incurred for the three months ended March 31, 2019 and 2018, approximately 28 thousand and 90 thousand potentially dilutive equity awards, respectively, were excluded from the net loss per share calculation, as their inclusion would have been anti-dilutive. Therefore, for the three months ended March 31, 2019 and 2018 , the basic weighted average shares outstanding were used in calculating diluted loss per share. The following is a reconciliation of the numerator and denominator of the basic and diluted net loss per share computations for the periods presented below (in thousands): Three months ended 2019 2018 Numerator: Net loss $ (2,865 ) $ (2,390 ) Denominator: Basic weighted average common shares outstanding 12,126 11,900 Potential common shares from equity awards and warrants — — Diluted weighted average shares 12,126 11,900 Product warranties Through March 31, 2016 , we warranted finished goods against defects in material and workmanship under normal use and service for periods generally between one and five years . Beginning April 1, 2016 , we warrant our commercial LED tubes, globes, and troffer luminaires for a period of ten years . Warranty settlement costs consist of actual amounts expensed for warranty, which are largely a result of the cost of replacement products provided to our customers. A liability for the estimated future costs under product warranties is maintained for products outstanding under warranty based on the actual claims incurred to date and the estimated nature, frequency, and costs of future claims. These estimates are inherently uncertain and changes to our historical or projected experience may cause material changes to our warranty reserves in the future. We continuously review the assumptions related to the adequacy of our warranty reserve, including product failure rates, and make adjustments to the existing warranty liability when there are changes to these estimates or the underlying replacement product costs, or the warranty period expires. Extending the warranty did not have a material impact on our condensed consolidated financial statements in 2018 or for the three months ended March 31, 2019 . The following table summarizes warranty activity for the periods presented (in thousands): Three months ended 2019 2018 Balance at beginning of period $ 258 $ 174 Warranty accruals for current period sales 12 8 Adjustments to existing warranties 89 (1 ) In kind settlements made during the period (7 ) (40 ) Accrued warranty reserve $ 352 $ 141 |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING During the first quarter 2019, we implemented phased actions to reduce costs in order to minimize cash usage while continuing to pursue strategic alternatives. The actions taken were limited to an initial phase while the options under strategic review were considered and evaluated, including the issuance of subordinated convertible notes as discussed in Note 7, “Debt.” Our initial actions included the elimination of three positions, restructuring of the sales organization and incentive plan, flattening of the senior management team, additional operational streamlining, management compensation reductions, and outsourcing of certain functions including warehousing and marketing. In connection with these actions, we recorded severance and related benefits charges of $0.1 million during the three months ended March 31, 2019 . Following the executive transition that occurred on April 1, 2019, we expect to incur additional restructuring charges totaling approximately $0.1 million during the second quarter of 2019. These additional restructuring charges primarily relate to severance and related benefits charges as a result of eliminating nine positions, as well as costs associated with closing our offices in San Jose, California and Taipei, Taiwan. For the three months ended March 31, 2018 , we recorded restructuring credits totaling approximately $50 thousand , primarily related to the revision of our initial estimates of the cost and offsetting sublease income for the remaining lease obligation for the former New York office. For additional information regarding the restructuring actions taken as part of the 2017 restructuring plan, please refer to Note 3, “Restructuring,” included under Item 8 of our 2018 Annual Report. Our restructuring liabilities consist of estimated ongoing costs related to long-term operating lease obligations. The recorded value of the ongoing lease obligations is based on the remaining lease term and payment amount, discounted to present value. Changes in subsequent periods resulting from a revision to either the timing or the amount of estimated cash flows over the future period are measured using the credit adjusted, risk free rate that was used to measure the restructuring liabilities initially. Please also refer to Note 6, “Leases” as certain amounts formerly included below in the restructuring reserve as of December 31, 2018, have been reclassified on the balance sheet to be shown netted against the restructured lease, right-of-use asset in accordance with Topic 842. The following is a reconciliation of the beginning and ending balances of our restructuring liability as it relates to the 2017 restructuring plan (in thousands): Facilities Balance at December 31, 2018 $ 350 Accretion of lease obligations (11 ) Reclassification upon adoption of Topic 842 (273 ) Balance at March 31, 2019 $ 66 At March 31, 2019, we had $3.9 million in cash and cash equivalents and total debt of $3.4 million , including $1.7 million outstanding on the revolving credit facility we entered into on December 11, 2018 and $1.7 million in subordinated convertible notes we entered into on March 29, 2019. Please refer to Note 7, “Debt” for more information on the additional financing we received on March 29, 2019 to fund our near-term operations. As a result of the restructuring actions and initiatives described above, we have reduced our operating expenses to be more commensurate with our sales volumes, however, we continue to incur losses and have a substantial accumulated deficit, and substantial doubt about our ability to continue as a going concern continues to exist at March 31, 2019. Since the executive transition on April 1, 2019, we have continued to evaluate and assess strategic options as we seek to achieve a profitable business model and maximize value for our stockholders. Our plans to achieve profitability include continuing to develop new technologies into sustainable product lines that allow us to effectively compete to expand our customer base, execute our marketing and sales plans, and continue to improve our supply chain and organizational structure. The restructuring and cost cutting initiatives implemented during 2017 and 2019 were designed to allow us to effectively execute this strategy; however, our efforts may not occur as quickly as we envision or be successful, due to the long sales cycle in our industry, the corresponding time required to ramp up sales from new products into this sales cycle, the timing of introductions of additional new products, significant competition, and potential volatility given our customer concentration, among other factors. As a result, we will continue to review and pursue selected external funding sources to ensure adequate financial resources to execute across the timelines required to achieve these objectives including, but not limited to, the following: • obtaining financing from traditional or non-traditional investment capital organizations or individuals; and • obtaining funding from the sale of our common stock or other equity or debt instruments. There can be no assurance that we will obtain funding on acceptable terms, in a timely fashion, or at all. Obtaining additional funding contains risks, including: • additional equity financing may not be available to us on satisfactory terms and any equity we are able to issue could lead to dilution for current stockholders and have rights, preferences and privileges senior to our common stock; • loans or other debt instruments may have terms and/or conditions, such as interest rate, restrictive covenants and control or revocation provisions, which are not acceptable to management or our board of directors; and • the current environment in capital markets combined with our capital constraints may prevent us from being able to obtain adequate debt financing. If we fail to obtain the required additional financing to sustain our business before we are able to produce levels of revenue to meet our financial needs, we will need to delay, scale back or eliminate our business plan and further reduce our operating costs and headcount, each of which would have a material adverse effect on our business, future prospects, and financial condition. A lack of additional funding could also result in our inability to continue as a going concern and force us to sell certain assets or discontinue or curtail our operations and, as a result, investors in the Company could lose their entire investment. Considering both quantitative and qualitative information, we continue to believe that the combination of our plans to obtain additional financing, restructuring actions noted above, current financial position, liquid resources, obligations due or anticipated within the next year, executive reorganization, and implementation of our product development and sales strategy, if adequately executed, will provide us with an ability to finance our operations through 2019 and will mitigate the substantial doubt about our ability to continue as a going concern. On May 15, 2019, we received a letter from Nasdaq advising us that for 30 consecutive trading days preceding the date of the letter, the bid price of our common stock had closed below the $1.00 per share minimum required for continued listing on the The Nasdaq Capital Market pursuant to listing rules, and therefore we could be subject to delisting if we did not regain compliance within the compliance period (or the compliance period as may be extended). We continue to monitor and evaluate our options to cure this deficiency within the compliance period. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | INVENTORIES Inventories are stated at the lower of standard cost (which approximates actual cost determined using the first-in, first-out cost method) or net realizable value, and consist of the following (in thousands): March 31, December 31, Raw materials $ 4,019 $ 4,041 Finished goods 7,608 8,229 Reserves for excess, obsolete, and slow moving inventories and valuation reserves - Raw Materials (901 ) (1,261 ) Reserves for excess, obsolete, and slow moving inventories and valuation reserves - Finished Goods (2,475 ) (2,951 ) Inventories, net $ 8,251 $ 8,058 |
Property and Equipment and Asse
Property and Equipment and Assets Held For Sale | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment and Assets Held For Sale | PROPERTY AND EQUIPMENT AND ASSETS HELD FOR SALE Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets and consist of the following (in thousands): March 31, December 31, Equipment (useful life 3 to 15 years) $ 1,491 $ 1,511 Tooling (useful life 2 to 5 years) 371 371 Vehicles (useful life 5 years) 47 47 Furniture and fixtures (useful life 5 years) 137 137 Computer software (useful life 3 years) 1,043 1,043 Leasehold improvements (the shorter of useful life or lease life) 211 211 Finance lease right-of-use asset 13 — Projects in progress 61 55 Property and equipment at cost 3,374 3,375 Less: accumulated depreciation (2,864 ) (2,765 ) Property and equipment, net $ 510 $ 610 Depreciation expense was $0.1 million and $0.2 million the three months ended March 31, 2019 and 2018 , respectively. During the first quarter of 2018, we completed the sale of the equipment that we previously classified as held for sale. We received net proceeds from the sale of $0.2 million and recognized a gain on the sale of approximately $18 thousand for the three months ended March 31, 2018. The gain on the sale is classified on our Condensed Consolidated Statements of Operations under the caption, “Other (income) expense.” |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | LEASES The Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases expiring through 2024 under which it is responsible for related maintenance, taxes and insurance. The Company has one finance lease containing a bargain purchase option upon expiration of lease in 2022 . The lease term consists of the non-cancellable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The present value of the remaining lease obligation for these leases was calculated using an incremental borrowing rate (“IBR”) of 7.25% , which was the Company’s borrowing rate on the revolving credit agreement signed on December 11, 2018 . The weighted average remaining lease term for operating, restructuring and finance leases is three years, two years, and three years, respectively. The Company has two restructured leases with sub-lease components for the New York, New York and Arlington, Virginia offices that were closed in 2017. The New York, New York lease expires in 2021 and the Arlington, Virginia lease expires in 2019 . At the “cease use” date in 2017, the Company recorded the present value of the future minimum payments under the leases and costs that continue to be incurred with no economic benefit to the Company in accordance with Topic 420, Exit and Disposal Costs . The Company entered into sub-leases for both offices and included the estimated sub-lease payments as an offset to the remaining lease obligations, as required by Topic 420. In adopting Topic 842, the carrying value of the aforementioned net liabilities has been reclassified as a reduction of the restructured lease, right-of-use asset, which totaled $273 thousand as of January 1, 2019. The restructured leases and sub-leases were not scoped out of the requirements of Topic 842 and were evaluated for impairment in accordance with the asset impairment provisions of Topic 360. The Company concluded its net right-of-use assets were not impaired. The Company continues to carry certain immaterial operating expenses associated with these leases as restructuring liabilities and will continue to accrete those liabilities in accordance with Topic 420, as has been done since the cease use date in 2017. Due to the continued net losses, going concern, and 2019 restructuring actions discussed in Note 3, “Restructuring,” the Company also evaluated its Solon, Ohio operating lease right-of-use asset for potential impairment under Topic 360. As a result of this evaluation, the Company determined that the operating lease right-of-use asset for the Solon, Ohio operating lease was impaired upon the adoption of Topic 842. Therefore, the Company recorded an impairment of this right-of-use asset of approximately $0.2 million , with a corresponding offset to accumulated deficit as of January 1, 2019. Components of the operating, restructured and finance lease costs for the first quarter of 2019 were as follows (in thousands): Three months ended 2019 Operating lease cost Sublease income $ (25 ) Lease cost 147 Operating lease cost, net 122 Restructured lease cost Sublease income (112 ) Lease cost 109 Restructured lease cost, net (3 ) Finance lease cost Interest on lease liabilities 1 Finance lease cost, net 1 Total lease cost $ 120 Supplemental balance sheet information related to the Company’s operating and finance leases as of March 31, 2019 are as follows (in thousands): March 31, 2019 Operating Leases Operating lease right-of-use assets $ 1,682 Restructured lease right-of-use assets 563 Operating lease right-of-use assets, total 2,245 Operating lease liabilities 1,867 Restructured lease liabilities 810 Operating lease liabilities, total 2,677 Finance Leases Property and equipment 13 Allowances for depreciation (4 ) Finance lease assets, net 9 Finance lease liabilities 8 Total finance lease liabilities $ 8 Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at March 31, 2019 are as follows: Operating Leases Restructured Leases Restructured Leases Sublease Payments Finance Lease April 2019 to March 2020 $ 636 $ 441 $ (359 ) 3 April 2020 to March 2021 636 342 (273 ) 3 April 2021 to March 2022 633 86 (68 ) 3 April 2022 to March 2023 170 — — — April 2023 to March 2024 17 — — — Total future undiscounted lease payments 2,092 869 (700 ) 9 Less imputed interest (225 ) (59 ) 47 (1 ) Total lease obligations $ 1,867 $ 810 $ (653 ) $ 8 Supplemental cash flow information related to leases for the first quarter of 2019 was as follows (in thousands): Three months ended 2019 Supplemental cash flow information Cash paid, net, for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 122 Operating cash flows from restructured leases $ (3 ) Financing cash flows from finance leases $ 1 |
Leases | LEASES The Company leases certain equipment, manufacturing, warehouse and office space under non-cancellable operating leases expiring through 2024 under which it is responsible for related maintenance, taxes and insurance. The Company has one finance lease containing a bargain purchase option upon expiration of lease in 2022 . The lease term consists of the non-cancellable period of the lease, periods covered by options to extend the lease if the Company is reasonably certain to exercise the option, and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the option. The present value of the remaining lease obligation for these leases was calculated using an incremental borrowing rate (“IBR”) of 7.25% , which was the Company’s borrowing rate on the revolving credit agreement signed on December 11, 2018 . The weighted average remaining lease term for operating, restructuring and finance leases is three years, two years, and three years, respectively. The Company has two restructured leases with sub-lease components for the New York, New York and Arlington, Virginia offices that were closed in 2017. The New York, New York lease expires in 2021 and the Arlington, Virginia lease expires in 2019 . At the “cease use” date in 2017, the Company recorded the present value of the future minimum payments under the leases and costs that continue to be incurred with no economic benefit to the Company in accordance with Topic 420, Exit and Disposal Costs . The Company entered into sub-leases for both offices and included the estimated sub-lease payments as an offset to the remaining lease obligations, as required by Topic 420. In adopting Topic 842, the carrying value of the aforementioned net liabilities has been reclassified as a reduction of the restructured lease, right-of-use asset, which totaled $273 thousand as of January 1, 2019. The restructured leases and sub-leases were not scoped out of the requirements of Topic 842 and were evaluated for impairment in accordance with the asset impairment provisions of Topic 360. The Company concluded its net right-of-use assets were not impaired. The Company continues to carry certain immaterial operating expenses associated with these leases as restructuring liabilities and will continue to accrete those liabilities in accordance with Topic 420, as has been done since the cease use date in 2017. Due to the continued net losses, going concern, and 2019 restructuring actions discussed in Note 3, “Restructuring,” the Company also evaluated its Solon, Ohio operating lease right-of-use asset for potential impairment under Topic 360. As a result of this evaluation, the Company determined that the operating lease right-of-use asset for the Solon, Ohio operating lease was impaired upon the adoption of Topic 842. Therefore, the Company recorded an impairment of this right-of-use asset of approximately $0.2 million , with a corresponding offset to accumulated deficit as of January 1, 2019. Components of the operating, restructured and finance lease costs for the first quarter of 2019 were as follows (in thousands): Three months ended 2019 Operating lease cost Sublease income $ (25 ) Lease cost 147 Operating lease cost, net 122 Restructured lease cost Sublease income (112 ) Lease cost 109 Restructured lease cost, net (3 ) Finance lease cost Interest on lease liabilities 1 Finance lease cost, net 1 Total lease cost $ 120 Supplemental balance sheet information related to the Company’s operating and finance leases as of March 31, 2019 are as follows (in thousands): March 31, 2019 Operating Leases Operating lease right-of-use assets $ 1,682 Restructured lease right-of-use assets 563 Operating lease right-of-use assets, total 2,245 Operating lease liabilities 1,867 Restructured lease liabilities 810 Operating lease liabilities, total 2,677 Finance Leases Property and equipment 13 Allowances for depreciation (4 ) Finance lease assets, net 9 Finance lease liabilities 8 Total finance lease liabilities $ 8 Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at March 31, 2019 are as follows: Operating Leases Restructured Leases Restructured Leases Sublease Payments Finance Lease April 2019 to March 2020 $ 636 $ 441 $ (359 ) 3 April 2020 to March 2021 636 342 (273 ) 3 April 2021 to March 2022 633 86 (68 ) 3 April 2022 to March 2023 170 — — — April 2023 to March 2024 17 — — — Total future undiscounted lease payments 2,092 869 (700 ) 9 Less imputed interest (225 ) (59 ) 47 (1 ) Total lease obligations $ 1,867 $ 810 $ (653 ) $ 8 Supplemental cash flow information related to leases for the first quarter of 2019 was as follows (in thousands): Three months ended 2019 Supplemental cash flow information Cash paid, net, for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 122 Operating cash flows from restructured leases $ (3 ) Financing cash flows from finance leases $ 1 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Credit facility As of March 31, 2019 , borrowings under our revolving line of credit (“Credit Facility”) with Austin Financial Services were $1.7 million and are recorded in the Consolidated Balance Sheets as a current liability under the caption, “Credit line borrowings.” Unamortized debt issuance costs related to the Credit Facility were $0.1 million at March 31, 2019 . These costs are recorded as current and long-term assets on the Consolidated Balance Sheets and have not been netted against the liability due to immateriality. The borrowing rate as of March 31, 2019 was 7.50% . At March 31, 2019 , we had $0.6 million available for us to borrow under the Credit Facility. Additional information regarding our Credit Facility is included in Note 9, “Debt” to our Annual Report on Form 10-K for the year ended December 31, 2018 which was filed with the SEC on April 1, 2019. Debt On March 29, 2019, the Company entered into a Note Purchase Agreement with Fusion Park LLC, F&S Electronic Technology (HK) Co., Ltd, Brilliant Start Enterprise Inc., Vittorio Viarengo and Amaury Furmin (collectively the “Investors”) for the purchase of an aggregate $1.7 million in subordinated convertible promissory notes (the “Notes”). The Notes, which were issued to the Investors on March 29, 2019 and amended on May 29, 2019 , have a maturity date of December 31, 2021 and bear interest at a rate of 5 percent per annum until June 30, 2019 , and at a rate of 10 percent thereafter. The outstanding principal amount of each Note, together with accrued interest (such principal and interest, the “Aggregate Outstanding Amount”), is convertible into shares of Series A Preferred Stock at a “Conversion Rate” determined by the arithmetic average of the volume-weighted average closing price of the Common Stock measured over a specified ten-trading-day period that ended on April 16, 2019, which equaled $0.67 per share. To calculate the number of shares of Series A Preferred Stock into which each Note may convert, the Aggregate Outstanding Amount of such Note will be divided by the Conversion Rate. The Notes will automatically convert into shares of Series A Preferred Stock at the conversion rate on the first business day following the date that the Company’s stockholders approve the transactions contemplated by the Notes, including (a) the issuance of shares of Common Stock upon conversion of the shares of Series A Preferred Stock in excess of the number of shares of Common Stock permitted by NASDAQ Marketplace Rules, and (b) the increase in the number of authorized and available shares of Series A Preferred Stock pursuant to the Company’s Certificate of Incorporation, as amended. The Company has accounted for this equity-linked hybrid instrument in accordance with applicable U.S. GAAP and, per analysis of the terms of the agreement, has determined it to be a debt-related instrument that does not require the equity-linked component to be bifurcated. The Company has recorded the Notes as short-term debt at cost in the amount of $1.7 million , as we expect the Notes to convert in less than 12 months. The issuance costs will be deferred and amortized until such time as the Notes convert. Unamortized debt issuance costs were $28 thousand at March 31, 2019 . These costs are recorded as current and long-term assets on the Consolidated Balance Sheets and have not been netted against the liability due to immateriality. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES As a result of the operating loss incurred during each of the three months ended March 31, 2019 and 2018 , and after the application of the annual limitation set forth under Section 382 of the Internal Revenue Code (“IRC”), it was not necessary to record a provision for U.S. federal income tax or various states income taxes. At March 31, 2019 and December 31, 2018 , we had a full valuation allowance recorded against our deferred tax assets. The valuation allowance was recorded due to uncertainties related to our ability to realize the deferred tax assets, primarily consisting of certain net operating loss carry-forwards. The valuation allowance is based on management’s estimates of taxable income by jurisdiction and the periods over which the deferred tax assets will be recoverable. At December 31, 2018 , we had a net operating loss carry-forward of approximately $100.5 million for U.S. federal, state, and local income tax purposes. However, due to changes in our capital structure, approximately $46.0 million of the net operating loss carry-forward is available to offset future taxable income, and after the application of the limitations found under Section 382 of the IRC, we expect to have approximately $46.0 million of this amount available for use in 2019 . If not used, these carry-forwards will begin to expire in 2021 for federal and have begun to expire for state and local purposes. For a full discussion of the estimated restrictions on our utilization of net operating loss carry-forwards, please refer to Note 12, “Income Taxes,” included under Item 8 of our 2018 Annual Report. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | STOCKHOLDERS’ EQUITY Stock-based compensation Stock-based compensation expense is attributable to stock options and restricted stock unit awards. For all stock-based awards, we recognize expense using a straight-line amortization method. The following table summarizes stock-based compensation expense and the impact it had on operations for the periods presented (in thousands): Three months ended 2019 2018 Cost of sales $ 7 $ 9 Product development 28 25 Selling, general, and administrative 508 161 Total stock-based compensation $ 543 $ 195 Total unearned stock-based compensation was $0.4 million at March 31, 2019 , compared to $1.3 million at March 31, 2018 . These costs will be charged to expense and amortized on a straight-line basis in future periods. The weighted average period over which the unearned compensation at March 31, 2019 is expected to be recognized is approximately 1.4 years. Pursuant to agreements dated March 29, 2019, and effective April 1, 2019, Theodore L. Tewksbury III resigned as Chairman of the Board, Chief Executive Officer and President, and Jerry Turin resigned as Chief Financial Officer and Secretary. In accordance with their separation agreements Jerry Turin’s outstanding restricted stock units vested immediately and one-third of Theodore Tewksbury’s outstanding restricted stock units vested immediately. All stock options were cancelled. As such, the impact of the accelerated vesting and cancellation of the stock options is reflected in the tables below. Stock options The fair value of each stock option is estimated on the date of grant using the Black-Scholes option pricing model. Estimates utilized in the calculation include the expected life of the option, risk-free interest rate, and expected volatility, and are further comparatively detailed as follows: Three months ended 2019 2018 Fair value of options issued $ — $ 1.74 Exercise price $ — $ 2.46 Expected life of options (in years) 5.8 Risk-free interest rate — % 2.3 % Expected volatility — % 84.3 % Dividend yield 0.0 % 0.0 % A summary of option activity under all plans for the three months ended March 31, 2019 is presented as follows: Number of Weighted Weighted Balance at December 31, 2018 292,871 $ 3.78 Granted — — Exercised — — Canceled/forfeited (119,896 ) 2.23 Expired — — Balance at March 31, 2019 172,975 $ 4.86 5.7 Vested and expected to vest at March 31, 2019 172,462 $ 4.86 5.7 Exercisable at March 31, 2019 166,527 $ 4.92 5.6 Restricted stock units A summary of restricted stock unit activity under all plans for the three months ended March 31, 2019 is presented as follows: Restricted Weighted Weighted Balance at December 31, 2018 546,858 $ 2.54 Granted 16,580 1.16 Released (340,185 ) 2.61 Canceled/forfeited (125,716 ) 2.26 Balance at March 31, 2019 97,537 $ 2.36 1.1 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES We may be the subject of threatened or pending legal actions and contingencies in the normal course of conducting our business. We provide for costs related to these matters when a loss is probable and the amount can be reasonably estimated. The effect of the outcome of these matters on our future results of operations and liquidity cannot be predicted because any such effect depends on future results of operations and the amount or timing of the resolution of such matters. For certain types of claims, we maintain insurance coverage for personal injury and property damage, product liability and other liability coverages in amounts and with deductibles that we believe are prudent, but there can be no assurance that these coverages will be applicable or adequate to cover adverse outcomes of claims or legal proceedings against us. As of March 31, 2019 , we had approximately $2.5 million in outstanding purchase commitments for inventory. Of this amount, approximately $1.9 million is expected to ship in the second quarter of 2019 with the balance expected to ship in the third and fourth quarters of 2019. |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiary Energy Focus LED Solutions, LLC, which is not active. Unless indicated otherwise, the information in the accompanying financial statements and notes to the unaudited condensed consolidated financial statements relates to our continuing operations. We have prepared the accompanying financial data for the three months ended March 31, 2019 and 2018 pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted pursuant to such rules and regulations. The accompanying financial data and information should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Report”). The Condensed Consolidated Balance Sheet as of December 31, 2018 has been derived from the audited consolidated financial statements at that date, but does not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying financial statements contain all normal and recurring adjustments necessary to present fairly our Condensed Consolidated Balance Sheets as of March 31, 2019 and December 31, 2018 , Condensed Consolidated Statements of Operations for the three months ended March 31, 2019 and 2018 , Condensed Consolidated Statements of Comprehensive Loss for the three months ended March 31, 2019 and 2018 , Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2019 and 2018, and Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2019 and 2018 . Other than the adoption of the new lease accounting standard, there have been no other material changes to our significant accounting policies, as compared to those described in our 2018 Annual Report. |
Use of estimates | Use of estimates The preparation of financial statements in accordance with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Management bases its estimates on historical experience and various other assumptions believed to be reasonable. Although these estimates are based on management’s best knowledge of current events and actions that may impact us in the future, actual results may vary from the estimates. Estimates include, but are not limited to, the establishment of reserves for accounts receivable, sales returns, inventory obsolescence and warranty claims; the useful lives of property and equipment; valuation allowance for net deferred taxes; the cost and offsetting income related to subleased property; and stock-based compensation. In addition, estimates and assumptions associated with the determination of the fair value of financial instruments and evaluation of long-lived assets for impairment requires considerable judgment. Actual results could differ from those estimates and such differences could be material. |
Reclassifications | Reclassifications Certain amounts related to warranty accruals and settlements were reclassified to conform to current period reporting presentation with no impact on financial position, loss from operations or cash used in operations. |
Certain risks and concentrations | Certain risks and concentrations We have certain customers whose net sales individually represented 10 percent or more of our total net sales, or whose net trade accounts receivable balance individually represented 10 percent or more of our total net trade accounts receivable, as follows: For the three months ended March 31, 2019 , sales to our primary distributor for the U.S. Navy, a shipbuilder for the U.S. Navy, and a regional commercial lighting retrofit company located in Texas accounted for approximately 22 percent , 10 percent , and 30 percent of net sales, respectively. When sales to our primary distributor for the U.S. Navy are combined with sales to a shipbuilder for the U.S. Navy, total sales of products for the U.S. Navy comprised approximately 32 percent of net sales for the same period. For the three months ended March 31, 2018 , sales to our primary distributor for the U.S. Navy accounted for approximately 46 percent of net sales for the period. When combined with sales to a shipbuilder for the U.S. Navy, sales of products for the U.S. Navy comprised approximately 50 percent of net sales for the same period. Additionally, a regional commercial lighting retrofit company located in California accounted for approximately 10 percent of net sales for the three months ended March 31, 2018. A regional commercial lighting retrofit company located in Texas, our primary distributor for the U.S. Navy, and a primary shipbuilder for the U.S. Navy, accounted for approximately 34 percent , 19 percent , and 14 percent of net trade accounts receivable, respectively, at March 31, 2019 . At December 31, 2018 , our primary distributor for the U.S. Navy accounted for approximately 40 percent of net trade accounts receivable. |
Recent accounting pronouncements | Recent accounting pronouncements In August 2018, the Financial Accounting Standards Board (“FASB) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles--Goodwill and Other--Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the requirements for capitalizing implementation costs in a cloud computing service contract with the requirements for capitalizing implementation costs incurred for an internal-use software license. This standard will be effective for interim and annual periods beginning after December 15, 2019. We do not expect the adoption of this guidance to have a significant impact on our financial position, results of operations or cash flows. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which significantly changes the accounting for credit losses on instruments within its scope. The new guidance introduces an approach based on expected losses to estimate credit losses on certain financial instruments, including trade receivables, and requires an entity to recognize an allowance based on its estimate of expected credit losses rather than incurred losses. This standard will be effective for interim and annual periods beginning after December 15, 2019, and will generally require adoption on a modified retrospective basis. We are in the process of evaluating the impact of the standard. Adoption of recent accounting pronouncement In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) , which supersedes the current lease accounting requirements. Additionally, in July 2018, the FASB issued ASU No. 2018-11, Leases (Topic 842): Targeted Improvements , which simplifies adoption of Topic 842 by allowing an additional transition method that will not require restatement of prior periods and providing a new practical expedient for lessors to avoid separating lease and non-lease components within a contract if certain criteria are met (provisions of which must be elected upon adoption of Topic 842). The new standard requires a lessee to record on the balance sheet the assets and liabilities for the rights and obligations created by leases with lease terms of more than 12 months. It also requires lessees to disclose certain key information about lease transactions. Upon implementation, an entity’s lease payment obligations will be recognized at their estimated present value along with a corresponding right-of-use asset. Lease expense recognition will be generally consistent with current practice. The Company adopted this guidance as of January 1, 2019 using the required modified retrospective method with the non-comparative transition option. The Company applied the transitional package of practical expedients allowed by the standard to not reassess the identification, classification and initial direct costs of leases commencing before this ASU’s effective date. The Company also applied the lease term and impairment hindsight transitional practical expedients. The Company has chosen to apply the following accounting policy practical expedients: to not separate lease and non-lease components to new leases as well as existing leases through transition; and the election to not apply recognition requirements of the guidance to short-term leases. The results for reporting periods beginning after January 1, 2019 are presented under Topic 842, while prior period amounts are not adjusted and continue to be reported in accordance with legacy generally accepted accounting principles. On adoption, we recognized additional operating lease liabilities of approximately $2.9 million , with corresponding right-of-use assets based on the present value of the remaining minimum rental payments under prior leasing standards for our existing operating leases. The operating lease right-of-use assets recorded upon adoption were offset by the carrying value of liabilities previously recorded under Topic 420 and impairment charges totaling $ 273 thousand and $186 thousand , respectively. Refer to Note 6, “Leases” below for additional disclosures relating to the Company’s leasing arrangements. |
Revenue | Revenue On January 1, 2018, we adopted ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) , as amended by subsequently issued additional guidance (together, “ASC 606”) using the modified retrospective method. The adoption of ASC 606 did not have a material impact on our consolidated financial position or results of operations, as our revenue arrangements generally consist of a single performance obligation to transfer promised goods at a fixed price. Net sales include revenues from sales of products and shipping and handling charges, net of estimates for product returns. Revenue is measured at the amount of consideration we expect to receive in exchange for the transferred products. We recognize revenue at the point in time when we transfer the promised products to the customer and the customer obtains control over the products. We recognize revenue for shipping and handling charges at the time the goods are shipped to the customer, and the costs of outbound freight are included in cost of sales, as we have elected the practical expedient included in ASC 606. We provide for product returns based on historical return rates. While we incur costs for sales commissions to our sales employees and outside agents, we recognize commission costs concurrent with the related revenue, as the amortization period is less than one year and we have elected the practical expedient included in ASC 606. We do not incur any other incremental costs to obtain contracts with our customers. Our product warranties are assurance-type warranties, which promise the customer that the products are as specified in the contract. Therefore, the product warranties are not a separate performance obligation and are accounted for as described below. Sales taxes assessed by governmental authorities are accounted for on a net basis and are excluded from net sales. |
Accounts Receivable | Accounts Receivable Our trade accounts receivable consists of amounts billed to and currently due from customers. Credit is extended to customers based upon an evaluation of the customer’s financial condition and the amounts due are stated at their estimated net realizable value. We maintain an allowance for doubtful accounts receivable to provide for the estimated amount of receivables that will not be collected. The allowance is based on an assessment of customer creditworthiness and historical payment experience, the age of outstanding receivables, and performance guarantees to the extent applicable. Past due amounts are written off when our internal collection efforts have been unsuccessful. Our standard payment terms with customers are net 30 days, and we do not generally offer extended payment terms to our customers, but exceptions are made in some cases to major customers or with particular orders. Accordingly, we do not adjust trade accounts receivable for the effects of financing, as we expect the period between the transfer of product to the customer and the receipt of payment from the customer to be in line with our standard payment terms. |
Net loss per share | Net loss per share Basic loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. Dilutive potential common shares consist of incremental shares upon the exercise of stock options or release of restricted stock units unless the effect would be anti-dilutive. |
Product warranties | Product warranties Through March 31, 2016 , we warranted finished goods against defects in material and workmanship under normal use and service for periods generally between one and five years . Beginning April 1, 2016 , we warrant our commercial LED tubes, globes, and troffer luminaires for a period of ten years . Warranty settlement costs consist of actual amounts expensed for warranty, which are largely a result of the cost of replacement products provided to our customers. A liability for the estimated future costs under product warranties is maintained for products outstanding under warranty based on the actual claims incurred to date and the estimated nature, frequency, and costs of future claims. These estimates are inherently uncertain and changes to our historical or projected experience may cause material changes to our warranty reserves in the future. We continuously review the assumptions related to the adequacy of our warranty reserve, including product failure rates, and make adjustments to the existing warranty liability when there are changes to these estimates or the underlying replacement product costs, or the warranty period expires. |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Disaggregation of revenue | The following table provides a disaggregation of product net sales for the periods presented (in thousands): Three months ended 2019 2018 Net sales: Commercial 1,983 2,205 Military 1,194 2,454 Total net sales $ 3,177 $ 4,659 |
Reconciliation of basic and diluted income (loss) per share | The following is a reconciliation of the numerator and denominator of the basic and diluted net loss per share computations for the periods presented below (in thousands): Three months ended 2019 2018 Numerator: Net loss $ (2,865 ) $ (2,390 ) Denominator: Basic weighted average common shares outstanding 12,126 11,900 Potential common shares from equity awards and warrants — — Diluted weighted average shares 12,126 11,900 |
Schedule of warranty activity | The following table summarizes warranty activity for the periods presented (in thousands): Three months ended 2019 2018 Balance at beginning of period $ 258 $ 174 Warranty accruals for current period sales 12 8 Adjustments to existing warranties 89 (1 ) In kind settlements made during the period (7 ) (40 ) Accrued warranty reserve $ 352 $ 141 |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Restructuring Reserve by Type of Cost | The following is a reconciliation of the beginning and ending balances of our restructuring liability as it relates to the 2017 restructuring plan (in thousands): Facilities Balance at December 31, 2018 $ 350 Accretion of lease obligations (11 ) Reclassification upon adoption of Topic 842 (273 ) Balance at March 31, 2019 $ 66 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories are stated at the lower of standard cost (which approximates actual cost determined using the first-in, first-out cost method) or net realizable value, and consist of the following (in thousands): March 31, December 31, Raw materials $ 4,019 $ 4,041 Finished goods 7,608 8,229 Reserves for excess, obsolete, and slow moving inventories and valuation reserves - Raw Materials (901 ) (1,261 ) Reserves for excess, obsolete, and slow moving inventories and valuation reserves - Finished Goods (2,475 ) (2,951 ) Inventories, net $ 8,251 $ 8,058 |
Property and Equipment and As_2
Property and Equipment and Assets Held For Sale (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment are stated at cost and depreciated using the straight-line method over the estimated useful lives of the related assets and consist of the following (in thousands): March 31, December 31, Equipment (useful life 3 to 15 years) $ 1,491 $ 1,511 Tooling (useful life 2 to 5 years) 371 371 Vehicles (useful life 5 years) 47 47 Furniture and fixtures (useful life 5 years) 137 137 Computer software (useful life 3 years) 1,043 1,043 Leasehold improvements (the shorter of useful life or lease life) 211 211 Finance lease right-of-use asset 13 — Projects in progress 61 55 Property and equipment at cost 3,374 3,375 Less: accumulated depreciation (2,864 ) (2,765 ) Property and equipment, net $ 510 $ 610 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Components of Lease Cost and Supplemental Cash Flow Information | omponents of the operating, restructured and finance lease costs for the first quarter of 2019 were as follows (in thousands): Three months ended 2019 Operating lease cost Sublease income $ (25 ) Lease cost 147 Operating lease cost, net 122 Restructured lease cost Sublease income (112 ) Lease cost 109 Restructured lease cost, net (3 ) Finance lease cost Interest on lease liabilities 1 Finance lease cost, net 1 Total lease cost $ 120 Supplemental cash flow information related to leases for the first quarter of 2019 was as follows (in thousands): Three months ended 2019 Supplemental cash flow information Cash paid, net, for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 122 Operating cash flows from restructured leases $ (3 ) Financing cash flows from finance leases $ 1 |
Schedule of Supplemental Balance Sheet Information | upplemental balance sheet information related to the Company’s operating and finance leases as of March 31, 2019 are as follows (in thousands): March 31, 2019 Operating Leases Operating lease right-of-use assets $ 1,682 Restructured lease right-of-use assets 563 Operating lease right-of-use assets, total 2,245 Operating lease liabilities 1,867 Restructured lease liabilities 810 Operating lease liabilities, total 2,677 Finance Leases Property and equipment 13 Allowances for depreciation (4 ) Finance lease assets, net 9 Finance lease liabilities 8 Total finance lease liabilities $ 8 |
Schedule of Future Maturities of Finance Lease Liabilities | Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at March 31, 2019 are as follows: Operating Leases Restructured Leases Restructured Leases Sublease Payments Finance Lease April 2019 to March 2020 $ 636 $ 441 $ (359 ) 3 April 2020 to March 2021 636 342 (273 ) 3 April 2021 to March 2022 633 86 (68 ) 3 April 2022 to March 2023 170 — — — April 2023 to March 2024 17 — — — Total future undiscounted lease payments 2,092 869 (700 ) 9 Less imputed interest (225 ) (59 ) 47 (1 ) Total lease obligations $ 1,867 $ 810 $ (653 ) $ 8 |
Schedule of Future Maturities of Operating Lease Liabilities | Future minimum lease payments required under operating, restructured and finance leases for each of the 12-month rolling periods below in effect at March 31, 2019 are as follows: Operating Leases Restructured Leases Restructured Leases Sublease Payments Finance Lease April 2019 to March 2020 $ 636 $ 441 $ (359 ) 3 April 2020 to March 2021 636 342 (273 ) 3 April 2021 to March 2022 633 86 (68 ) 3 April 2022 to March 2023 170 — — — April 2023 to March 2024 17 — — — Total future undiscounted lease payments 2,092 869 (700 ) 9 Less imputed interest (225 ) (59 ) 47 (1 ) Total lease obligations $ 1,867 $ 810 $ (653 ) $ 8 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Summary of stock-based compensation expense | The following table summarizes stock-based compensation expense and the impact it had on operations for the periods presented (in thousands): Three months ended 2019 2018 Cost of sales $ 7 $ 9 Product development 28 25 Selling, general, and administrative 508 161 Total stock-based compensation $ 543 $ 195 |
Schedule of valuation assumptions | Estimates utilized in the calculation include the expected life of the option, risk-free interest rate, and expected volatility, and are further comparatively detailed as follows: Three months ended 2019 2018 Fair value of options issued $ — $ 1.74 Exercise price $ — $ 2.46 Expected life of options (in years) 5.8 Risk-free interest rate — % 2.3 % Expected volatility — % 84.3 % Dividend yield 0.0 % 0.0 % |
Summary of option activity | A summary of option activity under all plans for the three months ended March 31, 2019 is presented as follows: Number of Weighted Weighted Balance at December 31, 2018 292,871 $ 3.78 Granted — — Exercised — — Canceled/forfeited (119,896 ) 2.23 Expired — — Balance at March 31, 2019 172,975 $ 4.86 5.7 Vested and expected to vest at March 31, 2019 172,462 $ 4.86 5.7 Exercisable at March 31, 2019 166,527 $ 4.92 5.6 |
Summary of restricted stock activity | A summary of restricted stock unit activity under all plans for the three months ended March 31, 2019 is presented as follows: Restricted Weighted Weighted Balance at December 31, 2018 546,858 $ 2.54 Granted 16,580 1.16 Released (340,185 ) 2.61 Canceled/forfeited (125,716 ) 2.26 Balance at March 31, 2019 97,537 $ 2.36 1.1 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) shares in Thousands, $ in Thousands | Apr. 01, 2016 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jan. 01, 2019 |
Concentration Risk [Line Items] | |||||
Operating lease liabilities | $ 1,867 | ||||
Operating lease right-of-use assets | 1,682 | ||||
Operating lease, impairment loss | $ 186 | ||||
Securities excluded from net loss per share calculation (in shares) | 28 | 90 | |||
Warranty service periods | 10 years | ||||
Minimum | |||||
Concentration Risk [Line Items] | |||||
Warranty service periods | 1 year | ||||
Maximum | |||||
Concentration Risk [Line Items] | |||||
Warranty service periods | 5 years | ||||
Geographic concentration risk | United States | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 97.00% | ||||
Revenue | Geographic concentration risk | Countries outside of the United States | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 1.00% | 1.00% | |||
Distributor To The U.S. Navy | Revenue | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 22.00% | 46.00% | |||
Distributor To The U.S. Navy | Accounts receivable | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 19.00% | 40.00% | |||
Shipbuilder for U.S.Navy | Revenue | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 10.00% | ||||
Shipbuilder for U.S.Navy | Accounts receivable | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 14.00% | ||||
Commercial Lighting Retrofit Company | Revenue | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 30.00% | 10.00% | |||
Commercial Lighting Retrofit Company | Accounts receivable | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 34.00% | ||||
U.S. Navy | Revenue | Customer concentration risk | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (less than for one percent) | 32.00% | 50.00% | |||
Accounting Standards Update 2016-02 | |||||
Concentration Risk [Line Items] | |||||
Operating lease liabilities | $ 2,900 | ||||
Operating lease right-of-use assets | $ 2,900 | ||||
Facilities | 2017 Restructuring Plan | |||||
Concentration Risk [Line Items] | |||||
Reclassification upon adoption of Topic 842 | $ 273 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue from External Customer [Line Items] | ||
Net sales | $ 3,177 | $ 4,659 |
Commercial | ||
Revenue from External Customer [Line Items] | ||
Net sales | 1,983 | 2,205 |
Military | ||
Revenue from External Customer [Line Items] | ||
Net sales | $ 1,194 | $ 2,454 |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Reconciliation of Basic and Diluted Loss per Share (Details) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator: | ||
Net loss | $ (2,865) | $ (2,390) |
Denominator: | ||
Basic and diluted (in shares) | 12,126 | 11,900 |
Potential common shares from equity awards and warrants (in shares) | 0 | 0 |
Diluted weighted average shares (in shares) | 12,126 | 11,900 |
Basis of Presentation and Sum_7
Basis of Presentation and Summary of Significant Accounting Policies - Warranty Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Movement in Standard and Extended Product Warranty, Increase (Decrease) [Roll Forward] | ||
Balance at beginning of period | $ 258 | $ 174 |
Accruals for warranties issued | 12 | 8 |
Adjustments to existing warranties | 89 | (1) |
In kind settlements made during the period | (7) | (40) |
Accrued warranty reserve | $ 352 | $ 141 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) $ in Thousands | Mar. 29, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($)position | Mar. 31, 2018USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2017USD ($) |
Restructuring Cost and Reserve [Line Items] | ||||||
Number of positions eliminated | position | 3 | |||||
Restructuring | $ 134 | $ (50) | ||||
Cash and cash equivalents | 3,861 | $ 10,172 | $ 6,335 | $ 10,761 | ||
Short-term debt | 3,400 | |||||
Credit line borrowings | 1,757 | $ 2,219 | ||||
Proceeds from issuance of subordinated convertible promissory notes | $ 1,700 | |||||
Severance and Related Benefits | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring | 100 | |||||
Revolving Credit Facility | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Credit line borrowings | $ 1,700 | |||||
Scenario, Forecast | Severance and Related Benefits | ||||||
Restructuring Cost and Reserve [Line Items] | ||||||
Restructuring | $ 100 |
Restructuring - Reconciliation
Restructuring - Reconciliation of Restructuring Liability (Details) - 2017 Restructuring Plan - Facilities $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Restructuring Reserve [Roll Forward] | |
Beginning balance | $ 350 |
Accretion of lease obligations | (11) |
Reclassification upon adoption of Topic 842 | (273) |
Ending balance | $ 66 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,019 | $ 4,041 |
Finished goods | 7,608 | 8,229 |
Reserves for excess, obsolete, and slow moving inventories and valuation reserves - Raw Materials | (901) | (1,261) |
Reserves for excess, obsolete, and slow moving inventories and valuation reserves - Finished Goods | (2,475) | (2,951) |
Inventories, net | $ 8,251 | $ 8,058 |
Property and Equipment and As_3
Property and Equipment and Assets Held For Sale - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment at cost | $ 3,374 | $ 3,375 | |
Less: accumulated depreciation | (2,864) | (2,765) | |
Property and equipment, net | 510 | 610 | |
Depreciation | 105 | $ 151 | |
Equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment at cost | $ 1,491 | 1,511 | |
Equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 15 years | ||
Tooling | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment at cost | $ 371 | 371 | |
Tooling | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 2 years | ||
Tooling | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Property and equipment at cost | $ 47 | 47 | |
Furniture and fixtures | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 5 years | ||
Property and equipment at cost | $ 137 | 137 | |
Computer software | |||
Property, Plant and Equipment [Line Items] | |||
Useful life | 3 years | ||
Property and equipment at cost | $ 1,043 | 1,043 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment at cost | 211 | 211 | |
Finance lease right-of-use asset | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment at cost | 13 | 0 | |
Projects in progress | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment at cost | $ 61 | $ 55 |
Property and Equipment and As_4
Property and Equipment and Assets Held For Sale - Proceeds From Sale (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||
(Gain) loss on dispositions of property and equipment | $ 1 | $ 19 |
Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Proceeds from sale of equipment | 200 | |
(Gain) loss on dispositions of property and equipment | $ 18 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease, discount rate | 7.25% |
Operating lease, weighted average remaining lease term | 3 years |
Restructured lease, weighted average remaining lease term | 2 years |
Finance lease, weighted average remaining lease term | 3 years |
Operating lease, impairment loss | $ 186 |
2017 Restructuring Plan | Facilities | |
Lessee, Lease, Description [Line Items] | |
Reclassification upon adoption of Topic 842 | $ 273 |
Leases - Components of Lease Co
Leases - Components of Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Sublease income | $ (25) |
Operating lease cost | 147 |
Operating lease cost, net | 122 |
Sublease income | 112 |
Lease cost | 109 |
Restructured lease cost, net | (3) |
Interest on lease liabilities | 1 |
Total lease cost | $ 120 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Balance Sheet Information (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Operating lease right-of-use assets | $ 1,682 |
Restructured lease, right-of-use asset | 563 |
Operating lease right-of-use assets, total | 2,245 |
Operating lease liabilities | 1,867 |
Restructured lease liabilities | 810 |
Operating lease liabilities, total | 2,677 |
Property and equipment | 13 |
Allowances for depreciation | (4) |
Finance lease assets, net | 9 |
Finance lease liabilities | $ 8 |
Leases - Schedule of Future Mat
Leases - Schedule of Future Maturities of Lease Liabilities (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Operating Leases | |
April 2019 to March 2020 | $ 636 |
April 2020 to March 2021 | 636 |
April 2021 to March 2022 | 633 |
April 2022 to March 2023 | 170 |
April 2023 to March 2024 | 17 |
Total future undiscounted lease payments | 2,092 |
Less imputed interest | (225) |
Total lease obligations | 1,867 |
Restructured Leases | |
April 2019 to March 2020 | 441 |
April 2020 to March 2021 | 342 |
April 2021 to March 2022 | 86 |
April 2022 to March 2023 | 0 |
April 2023 to March 2024 | 0 |
Total future undiscounted lease payments | 869 |
Less imputed interest | (59) |
Total lease obligations | 810 |
Restructured Leases Sublease Payments | |
April 2019 to March 2020 | (359) |
April 2020 to March 2021 | (273) |
April 2021 to March 2022 | (68) |
April 2022 to March 2023 | 0 |
April 2023 to March 2024 | 0 |
Total future undiscounted lease payments | (700) |
Less imputed interest | (47) |
Total lease obligations | (653) |
Finance Lease | |
April 2019 to March 2020 | 3 |
April 2020 to March 2021 | 3 |
April 2021 to March 2022 | 3 |
April 2022 to March 2023 | 0 |
April 2023 to March 2024 | 0 |
Total future undiscounted lease payments | 9 |
Less imputed interest | (1) |
Total lease obligations | $ 8 |
Leases - Schedule of Suppleme_2
Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Leases [Abstract] | ||
Operating cash flows from operating leases | $ 122 | |
Operating cash flows from restructured leases | (3) | |
Financing cash flows from finance leases | $ 1 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 29, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2021 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | |||||
Credit line borrowings | $ 1,757 | $ 2,219 | |||
Proceeds from issuance of subordinated convertible promissory notes | $ 1,700 | ||||
Conversion rate (in dollars per share) | $ 0.67 | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Credit line borrowings | $ 1,700 | ||||
Unamortized debt issuance costs | $ 100 | ||||
Credit facility, interest rate | 7.50% | ||||
Available borrowing capacity remaining | $ 600 | ||||
Subsequent Event | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate on convertible notes | 5.00% | 10.00% | |||
Convertible Debt | |||||
Line of Credit Facility [Line Items] | |||||
Unamortized debt issuance costs | $ 28 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - U.S. Federal, State and Local tax authorities - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Loss Carryforwards [Line Items] | ||
Operating loss carry-forward | $ 100.5 | |
Operating loss carry-forward available | $ 46 | $ 46 |
Stockholders' Equity - Stock-Ba
Stockholders' Equity - Stock-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 543 | $ 195 |
Unearned stock-based compensation | $ 400 | 1,300 |
Unearned compensation expected to be recognized, period | 1 year 5 months 6 days | |
Cost of sales | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 7 | 9 |
Product development | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | 28 | 25 |
Selling, general, and administrative | ||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | ||
Stock-based compensation expense | $ 508 | $ 161 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Options and a Summary of Activity (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | ||
Fair value of options issued (in dollars per share) | $ 0 | $ 1.74 |
Exercise price (in dollars per share) | $ 0 | $ 2.46 |
Expected life of options (in years) | 5 years 9 months 18 days | |
Risk-free interest rate | 0.00% | 2.30% |
Expected volatility | 0.00% | 84.30% |
Dividend yield | 0.00% | 0.00% |
Number of Options | ||
Outstanding at beginning of period (in shares) | 292,871 | |
Granted (in shares) | 0 | |
Exercised (in shares) | 0 | |
Canceled/forfeited (in shares) | (119,896) | |
Expired (in shares) | 0 | |
Outstanding at end of period (in shares) | 172,975 | |
Vested and expected to vest at period end (in shares) | 172,462 | |
Exercisable at period end (in shares) | 166,527 | |
Weighted Average Exercise Price Per Share | ||
Outstanding at beginning of period (in dollars per share) | $ 3.78 | |
Granted (in dollars per share) | 0 | |
Exercised (in dollars per share) | 0 | |
Canceled/forfeited (in dollars per share) | 2.23 | |
Expired (in dollars per share) | 0 | |
Outstanding at end of period (in dollars per share) | 4.86 | |
Vested and expected to vest at period end (in dollars per share) | 4.86 | |
Exercisable at period end (in dollars per share) | $ 4.92 | |
Weighted Average Remaining Contractual Life (in years) | ||
Outstanding at end of period | 5 years 8 months | |
Vested and expected to vest at period end | 5 years 8 months | |
Exercisable at period end | 5 years 7 months 12 days |
Stockholders' Equity - Restrict
Stockholders' Equity - Restricted Stock Units (Details) | 3 Months Ended |
Mar. 31, 2019$ / sharesshares | |
Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 292,871 |
Granted (in shares) | shares | 0 |
Canceled/forfeited (in shares) | shares | (119,896) |
Outstanding at end of period (in shares) | shares | 172,975 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 3.78 |
Granted (in dollars per share) | $ / shares | 0 |
Canceled/forfeited (in dollars per share) | $ / shares | 2.23 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 4.86 |
Weighted Average Remaining Contractual Life (in years) | |
Outstanding at end of period | 5 years 8 months |
Restricted Stock Units | |
Restricted Stock Units | |
Outstanding at beginning of period (in shares) | shares | 546,858 |
Granted (in shares) | shares | 16,580 |
Released (in shares) | shares | (340,185) |
Canceled/forfeited (in shares) | shares | (125,716) |
Outstanding at end of period (in shares) | shares | 97,537 |
Weighted Average Grant Date Fair Value | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 2.54 |
Granted (in dollars per share) | $ / shares | 1.16 |
Released (in dollars per share) | $ / shares | 2.61 |
Canceled/forfeited (in dollars per share) | $ / shares | 2.26 |
Outstanding at end of period (in dollars per share) | $ / shares | $ 2.36 |
Weighted Average Remaining Contractual Life (in years) | |
Outstanding at end of period | 1 year 1 month |
Commitments and Contingencies P
Commitments and Contingencies Purchase obligations (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2019 | Mar. 31, 2019 | |
Long-term Purchase Commitment [Line Items] | ||
Outstanding purchase commitments | $ 2.5 | |
Scenario, Forecast | ||
Long-term Purchase Commitment [Line Items] | ||
Purchase commitment | $ 1.9 |
Uncategorized Items - efoi-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (186,000) |
Restricted Cash | us-gaap_RestrictedCash | 342,000 |
Restricted Cash | us-gaap_RestrictedCash | 342,000 |
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | 9,830,000 |
Cash and Cash Equivalents, at Carrying Value | us-gaap_CashAndCashEquivalentsAtCarryingValue | 3,519,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (186,000) |