SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)
|
9 Months Ended |
Sep. 30, 2019 |
|---|
| Schedule of inventory |
The below table presents inventory by category (in thousands):
|
|
|
|
|
|
|
|
September 30, 2019
|
|
|
December 31,
2018
|
|
|
Raw materials and components
|
|
$
|
1,089
|
|
|
$
|
171
|
|
|
Work-in-process
|
|
|
2,392
|
|
|
|
2,471
|
|
|
Finished goods
|
|
|
4,010
|
|
|
|
2,063
|
|
|
Total
|
|
$
|
7,491
|
|
|
$
|
4,705
|
|
|
| Schedule of prepaid expenses and other current assets |
Prepaid expenses and other current assets consisted of the following at September 30, 2019 and December 31, 2018 (in thousands):
|
|
|
|
|
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
Prepaid insurance
|
|
$
|
427
|
|
|
$
|
82
|
|
|
Other prepaid expenses and current assets
|
|
|
767
|
|
|
|
661
|
|
|
|
|
$
|
1,194
|
|
|
$
|
743
|
|
|
| Schedule of other long-term liabilities |
Other long-term liabilities consisted of the following at September 30, 2019 and December 31, 2018 (in thousands):
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
Trade discount
|
|
$
|
24,052
|
|
|
$
|
26,222
|
|
|
Unearned revenue
|
|
|
10,500
|
|
|
|
10,000
|
|
|
Other long-term liabilities
|
|
|
4
|
|
|
|
—
|
|
|
Total other long-term liabilities
|
|
$
|
34,556
|
|
|
$
|
36,222
|
|
|
| Schedule of change in fair value of warrant derivative liabilities |
The following table presents the change in fair value of warrant derivative liabilities on a recurring basis using Level 3 inputs during the year ended December 31, 2018 (in thousands):
|
|
|
Year Ended
|
|
|
Warrant Derivative Liabilities—Stock Purchase Warrants
|
|
December 31, 2018
|
|
|
Balance, beginning of period
|
|
$
|
26,377
|
|
|
Repurchased
|
|
|
(6,186
|
)
|
|
Change in fair value included in the statement of comprehensive income (loss)
|
|
|
(20,191
|
)
|
|
Balance, end of period
|
|
$
|
—
|
|
|
| Senior Secured Convertible Debentures [Member] |
|
| Schedule of change in fair value of warrants issued |
The following table sets forth the fair value of the embedded conversion option measured as of September 30, 2019:
|
|
|
Nine Months Ended
|
|
|
Embedded Conversion Option Liabilities—10% Secured Senior Debentures
|
|
September 30, 2019
|
|
|
Balance, beginning of period
|
|
$
|
—
|
|
|
Fair value at issuance date
|
|
$
|
635
|
|
|
Change in fair value included in the statement of comprehensive income (loss)
|
|
|
(342
|
)
|
|
Balance, end of period
|
|
$
|
293
|
|
|
| Schedule of assumptions used in the valuation of warrants Issued |
The values as of September 30, 2019 and as of the Merger date were based upon following assumptions:
|
|
|
September 30, 2019
|
|
|
July 17, 2019
|
|
|
Conversion price
|
|
$
|
9.52
|
|
|
$
|
10.00
|
|
|
Risk‑free interest rate
|
|
|
1.74
|
%
|
|
|
1.92
|
%
|
|
Expected volatility (peer group)
|
|
|
60.00
|
%
|
|
|
55.00
|
%
|
|
Expected life (in years)
|
|
|
1.06
|
|
|
|
1.26
|
|
|
Expected dividend yield
|
|
—
|
|
|
—
|
|
|
Balance, end of period:
|
|
|
|
|
|
|
|
|
|
Embedded conversion option liabilities (in thousands)
|
|
$
|
293
|
|
|
$
|
635
|
|
|
| GPB Debt Holdings II, LLC [Member] |
|
| Schedule of change in fair value of warrants issued |
The following table presents the change in fair value of warrants issued to GPB Debt Holdings II, LLC as described in Note 8 as of September 30, 2019 and December 31, 2018 (in thousands):
|
|
|
Nine Months Ended
|
|
|
Year Ended
|
|
|
|
|
September 30, 2019
|
|
|
December 31, 2018
|
|
|
Warrant Derivative Liabilities—GPB
|
|
Warrants
|
|
|
Embedded Conversion Option
|
|
|
Warrants
|
|
|
Embedded Conversion Option
|
|
|
Balance, beginning of period
|
|
$
|
1,399
|
|
|
$
|
—
|
|
|
$
|
1,882
|
|
|
$
|
1,289
|
|
|
Change in fair value included in the statement of comprehensive income (loss)
|
|
|
(623
|
)
|
|
|
—
|
|
|
|
(483
|
)
|
|
|
(466
|
)
|
|
Extinguished upon debt repayment
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(823
|
)
|
|
Reclassification to equity
|
|
|
(776
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, end of period
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,399
|
|
|
$
|
—
|
|
|
| Schedule of assumptions used in the valuation of warrants Issued |
The value of warrant derivative liabilities and the change in fair value of the warrant derivative liabilities were determined using a Binomial Monte-Carlo Cliquet Option Pricing Model. The model is similar to traditional Black-Scholes-type option pricing models, except that the exercise price resets at certain dates in the future. In connection with the Merger, the variable exercise price was fixed, and the warrants were reclassified to equity.
The value as of the dates set forth in the table above was based on upon following assumptions:
|
|
|
July 17, 2019
|
|
|
December 31, 2018
|
|
|
Stock price
|
|
$
|
7.02
|
|
|
$
|
9.10
|
|
|
Risk‑free interest rate
|
|
|
1.81
|
%
|
|
|
2.48
|
%
|
|
Expected volatility (peer group)
|
|
|
70.00
|
%
|
|
|
70.00
|
%
|
|
Expected life (in years)
|
|
|
3.96
|
|
|
|
4.00
|
|
|
Expected dividend yield
|
|
|
—
|
|
|
—
|
|
|
Number outstanding
|
|
|
252,802
|
|
|
|
240,764
|
|
|
Balance, end of period:
|
|
|
|
|
|
|
|
|
|
Warrant derivative liabilities (long-term) (in thousands)
|
|
$
|
776
|
|
|
$
|
1,399
|
|
|