SIENTRA, INC., 10-Q filed on 8/11/2023
Quarterly Report
v3.23.2
Document and Entity Information - shares
 6 Months Ended
Jun. 30, 2023
Aug. 08, 2023
Cover [Abstract]    
Entity Registrant Name SIENTRA, INC.  
Entity Central Index Key 0001551693  
Document Type 10-Q  
Document Period End Date Jun. 30, 2023  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   11,264,850
Document Fiscal Year Focus 2023  
Document Fiscal Period Focus Q2  
Trading Symbol SIEN  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity File Number 001-36709  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-5551000  
Entity Address, Address Line One 3333 Michelson Drive  
Entity Address, Address Line Two Suite 650  
Entity Address, City or Town Irvine  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 92612  
City Area Code 805  
Local Phone Number 562-3500  
Document Quarterly Report true  
Document Transition Report false  
v3.23.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Current assets:    
Cash and cash equivalents $ 18,637 $ 26,071
Accounts receivable, net of allowances for doubtful accounts of $2,982 and $3,132 at June 30, 2023 and December 31, 2022, respectively 31,819 36,892
Inventories 39,408 42,692
Prepaid expenses and other current assets 2,044 2,094
Total current assets 91,908 107,749
Property and equipment, net 13,984 14,941
Goodwill 9,202 9,202
Other intangible assets, net 23,881 25,676
Right of use assets, net 6,175 7,004
Other assets 849 849
Total assets 145,999 165,421
Current liabilities:    
Accounts payable 4,795 6,818
Accrued and other current liabilities 17,209 22,599
Customer deposits 53,718 45,161
Sales return liability 12,756 15,773
Total current liabilities 88,478 90,351
Long-term debt 57,796 55,406
Derivative liability 0 880
Deferred and contingent consideration 3,073 2,791
Warranty reserve 8,778 8,186
Lease liabilities 4,437 5,518
Other liabilities 2,069 2,698
Total liabilities 164,631 165,830
Commitments and contingencies (Note 11)
Stockholders deficit:    
Preferred stock, $0.01 par value - Authorized 10,000,000 shares: none issued or outstanding 0 0
Common stock, $0.01 par value - Authorized 200,000,000 shares; issued 11,261,906 and 10,709,716 and outstanding 11,254,633 and 10,702,444 shares at June 30, 2023 and December 31, 2022, respectively 113 107
Additional paid-in capital 698,535 694,395
Treasury stock, at cost (7,273 shares at June 30, 2023 and December 31, 2022) (260) (260)
Accumulated deficit (717,020) (694,651)
Total stockholders' deficit (18,632) (409)
Total liabilities and stockholders' deficit $ 145,999 $ 165,421
v3.23.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Statement of Financial Position [Abstract]    
Accounts receivable, allowances (in dollars) $ 2,982 $ 3,132
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Common stock, shares authorized 200,000,000 200,000,000
Common stock, shares issued 11,261,906 10,709,716
Common stock, shares outstanding 11,254,633 10,702,444
Treasury stock, shares 7,273 7,273
v3.23.2
Condensed Consolidated Statements of Operations - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Income Statement [Abstract]        
Net sales $ 23,130,000 $ 21,513,000 $ 45,687,000 $ 42,911,000
Cost of goods sold 10,515,000 8,771,000 20,925,000 17,324,000
Gross profit 12,615,000 12,742,000 24,762,000 25,587,000
Operating expenses:        
Sales and marketing 10,005,000 13,664,000 20,157,000 29,252,000
Research and development 2,387,000 2,959,000 5,095,000 6,103,000
General and administrative 7,334,000 12,057,000 17,185,000 22,265,000
Total operating expenses 19,726,000 28,680,000 42,437,000 57,620,000
Loss from operations (7,111,000) (15,938,000) (17,675,000) (32,033,000)
Other (expense) income, net:        
Interest income 184,000 15,000 290,000 17,000
Interest expense (2,506,000) (2,323,000) (4,883,000) 4,220,000
Other (expense) income, net (44,000) 0 (101,000) 5,000
Total other (expense) income, net (2,366,000) (2,308,000) (4,694,000) (4,198,000)
Loss from continuing operations before income taxes (9,477,000) (18,246,000) (22,369,000) (36,231,000)
Income tax expense 0 0 0 0
Loss from continuing operations (9,477,000) (18,246,000) (22,369,000) (36,231,000)
Loss from discontinued operations, net of income taxes 0 (58,000) 0 (114,000)
Net loss $ (9,477,000) $ (18,304,000) $ (22,369,000) $ (36,345,000)
Basic net loss per common share        
Continuing operations $ (0.85) $ (2.91) $ (1.93) $ (5.80)
Discontinued operations 0 (0.01) 0 (0.02)
Basic net loss per share (0.85) (2.92) (1.93) (5.82)
Diluted net loss per common share        
Continuing operations (0.85) (2.91) (1.93) (5.80)
Discontinued operations 0 (0.01) 0 (0.02)
Diluted net loss per share $ (0.85) $ (2.92) $ (1.93) $ (5.82)
Weighted average outstanding common shares used for net loss per common share:        
Basic 11,205,000 6,264,954 11,589,311 6,249,356
Diluted 11,205,000 6,264,954 11,589,311 6,249,356
v3.23.2
Condensed Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)
$ in Thousands
Total
Common stock
Treasury stock
Additional paid-in capital
Accumulated deficit
Balance, beginning of year at Dec. 31, 2021 $ 40,857 $ 62 $ (260) $ 662,399 $ (621,344)
Balance, beginning of year (in shares) at Dec. 31, 2021   6,224,209 7,273    
Employee stock-based compensation expense 2,196     2,196  
Employee stock purchase program (ESPP) 329     329  
Employee stock purchase program (ESPP) (in shares)   13,958      
Vested RSUs (in shares)   26,533      
Shares repurchased for tax withholding on vesting RSUs (shares)   (9,407)      
Shares repurchased for tax withholding on vesting RSUs (255)     (255)  
Net loss (18,041)       (18,041)
Balance, end of year at Mar. 31, 2022 25,086 $ 62 $ (260) 664,669 (639,385)
Balance, end of year (in shares) at Mar. 31, 2022   6,255,293 7,273    
Balance, beginning of year at Dec. 31, 2021 40,857 $ 62 $ (260) 662,399 (621,344)
Balance, beginning of year (in shares) at Dec. 31, 2021   6,224,209 7,273    
Derivative liability reclassified to equity 0        
Net loss (36,345)        
Balance, end of year at Jun. 30, 2022 8,669 $ 62 $ (260) 666,556 (657,689)
Balance, end of year (in shares) at Jun. 30, 2022   6,279,621 7,273    
Balance, beginning of year at Mar. 31, 2022 25,086 $ 62 $ (260) 664,669 (639,385)
Balance, beginning of year (in shares) at Mar. 31, 2022   6,255,293 7,273    
Employee stock-based compensation expense 2,062     2,062  
Vested RSUs (0)        
Vested RSUs (in shares)   33,077      
Shares repurchased for tax withholding on vesting RSUs (shares)   (8,749)      
Shares repurchased for tax withholding on vesting RSUs (175)     (175)  
Net loss (18,304)       (18,304)
Balance, end of year at Jun. 30, 2022 8,669 $ 62 $ (260) 666,556 (657,689)
Balance, end of year (in shares) at Jun. 30, 2022   6,279,621 7,273    
Balance, beginning of year at Dec. 31, 2022 (409) $ 107 $ (260) 694,395 (694,651)
Balance, beginning of year (in shares) at Dec. 31, 2022   10,709,716 7,273    
Derivative liability reclassified to equity 880     880  
Employee stock-based compensation expense 1,722     1,722  
Exercise of warrants   $ 3   (3)  
Exercise of warrants (in shares)   290,315      
Employee stock purchase program (ESPP) 256 $ 1   255  
Employee stock purchase program (ESPP) (in shares)   146,227      
Vested RSUs   $ 1   (1)  
Vested RSUs (in shares)   70,017      
Shares repurchased for tax withholding on vesting RSUs (shares)   (25,034)      
Shares repurchased for tax withholding on vesting RSUs (40)     (40)  
Net loss (12,892)       (12,892)
Balance, end of year at Mar. 31, 2023 (10,483) $ 112 $ (260) 697,208 (707,543)
Balance, end of year (in shares) at Mar. 31, 2023   11,191,241 7,273    
Balance, beginning of year at Dec. 31, 2022 (409) $ 107 $ (260) 694,395 (694,651)
Balance, beginning of year (in shares) at Dec. 31, 2022   10,709,716 7,273    
Derivative liability reclassified to equity 880        
Net loss (22,369)        
Balance, end of year at Jun. 30, 2023 (18,632) $ 113 $ (260) 698,535 (717,020)
Balance, end of year (in shares) at Jun. 30, 2023   11,261,906 7,273    
Balance, beginning of year at Mar. 31, 2023 (10,483) $ 112 $ (260) 697,208 (707,543)
Balance, beginning of year (in shares) at Mar. 31, 2023   11,191,241 7,273    
Employee stock-based compensation expense 1,338     1,338  
Employee stock purchase program (ESPP) (3)     (3)  
Employee stock purchase program (ESPP) (in shares)   (1,780)      
Vested RSUs 0 $ 1   (1)  
Vested RSUs (in shares)   78,661      
Shares repurchased for tax withholding on vesting RSUs (shares)   (6,216)      
Shares repurchased for tax withholding on vesting RSUs (7)     (7)  
Net loss (9,477)       (9,477)
Balance, end of year at Jun. 30, 2023 $ (18,632) $ 113 $ (260) $ 698,535 $ (717,020)
Balance, end of year (in shares) at Jun. 30, 2023   11,261,906 7,273    
v3.23.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Cash flows from operating activities:    
Net loss $ (22,369) $ (36,345)
Loss from discontinued operations, net of income taxes 0 (114)
Loss from continuing operations, net of income taxes (22,369) (36,231)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 3,677 3,402
Provision for doubtful accounts 534 505
Provision for warranties 894 525
Provision for inventory 7 404
Fair value adjustments of other liabilities held at fair value 279 (88)
Amortization of debt discount and issuance costs 2,506 1,927
Employee stock-based compensation expense 3,060 4,258
Other non-cash adjustments 0 70
Changes in operating assets and liabilities:    
Accounts receivable 4,539 (3,698)
Inventories 3,277 (291)
Prepaid expenses, other current assets and other assets 50 916
Accounts payable, accrued, and other liabilities (8,787) (4,691)
Customer deposits 8,557 3,052
Sales return liability (3,017) (905)
Net cash flow used in operating activities - continuing operations (6,793) (30,845)
Net cash flow used in operating activities - discontinued operations 0 (114)
Net cash used in operating activities (6,793) (30,959)
Cash flows from investing activities:    
Purchases of property and equipment (786) (813)
Net cash flow used in investing activities - continuing operations (786) (813)
Net cash used in investing activities (786) (813)
Cash flows from financing activities:    
Proceeds from issuance of common stock for employee stock-based plans 253 329
Tax payments related to shares withheld for vested RSUs (47) (430)
Gross borrowings under the Term Loan 0 5,000
Gross borrowings under the Revolving Loan 0 5,440
Repayments of the Revolving Loan 0 (5,277)
Deferred financing costs (61) (73)
Net cash provided by financing activities - continuing operations 145 4,989
Net cash provided by financing activities 145 4,989
Net decrease in cash, cash equivalents and restricted cash (7,434) (26,783)
Cash, cash equivalents and restricted cash at:    
Beginning of period 26,677 52,068
End of period 19,243 25,285
Reconciliation of cash, cash equivalents, and restricted cash to the condensed consolidated balance sheets    
Cash and cash equivalents 18,637 24,990
Restricted cash included in other assets 606 295
End of period 19,243 25,285
Supplemental disclosure of cash flow information:    
Interest paid 2,087 2,190
Supplemental disclosure of non-cash investing and financing activities:    
Property and equipment in accounts payable and accrued liabilities 117 95
Asset acquisition, deferred and contingent consideration obligations at fair value 3 0
Deferred financing costs in accounts payable and accrued liabilities 0 250
Derivative liability reclassified to equity $ 880 $ 0
v3.23.2
Summary of Significant Accounting Policies
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
1.
Summary of Significant Accounting Policies
a.
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Sientra, Inc. (“Sientra”, the “Company”, “we”, “our”, or “us”) in this Quarterly Report on Form 10-Q have been prepared in accordance with U.S. generally accepted accounting principles, or "GAAP", and the rules and regulations of the U.S. Securities and Exchange Commission, or the "SEC". Accordingly, they do not include certain notes and financial presentations normally required under GAAP for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on April 18, 2023, or the Annual Report. The results for the three and six months ended June 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period.

 

Reverse Stock Split

 

On January 19, 2023, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock, par value $0.01 per share (the “Common Stock”) by the filing of a Certificate of Amendment (the “Certificate”) with the Secretary of State of the State of Delaware pursuant to the Delaware General Corporation Law. The Reverse Stock Split became effective on January 19, 2023.

 

As a result of the Reverse Stock Split, every 10 shares of Common Stock issued and outstanding were automatically reclassified into one new share of common stock. The Reverse Stock Split did not modify any rights or preferences of the shares of Common Stock. Proportionate adjustments were made to the exercise or conversion prices and the number of shares underlying the Company’s outstanding equity awards, convertible securities and warrants, as well as to the number of shares issued and issuable under the Company’s equity incentive plans. The Common Stock issued pursuant to the Reverse Stock Split remained fully paid and non-assessable. The Reverse Stock Split did not affect the number of authorized shares of Common Stock or the par value of the Common Stock. All share information in the accompanying financial statements has been adjusted to reflect the results of the Reverse Stock Split.

 

Discontinued Operations of miraDry

As a result of the miraDry sale discussed in Note 2, the miraDry business met the criteria to be reported as discontinued operations. Therefore, the Company is reporting the historical results of miraDry, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein through the date of the Sale. Unless otherwise noted, the accompanying notes to the unaudited condensed consolidated financial statements have all been revised to reflect continuing operations only. Following the sale the Company has one operating segment in continuing operations named Plastic Surgery, formerly known as Breast Products.

 

b.
Liquidity and Going Concern

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these condensed consolidated financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the condensed consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Since the Company’s inception, it has incurred recurring losses and cash outflows from operations and the Company anticipates that losses will continue in the near term. During the six months ended June 30, 2023, the Company incurred net losses of $22.4 million and used $7.4 million of cash from continuing operations. As of June 30, 2023, the Company had cash and cash equivalents of $18.6 million. As a result of these conditions substantial doubt exists about our ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

In an effort to alleviate these conditions, management is currently evaluating various cost-saving measures in order to reduce operating expenses and cash outflows. However, the Company will need to generate a significant increase in net sales to further improve profitability and cash inflows, which is dependent upon continued growth in our Plastic Surgery segment and the launch of new products and partnerships. Additionally, we are evaluating various funding alternatives to improve liquidity and may seek to raise additional equity or debt capital, refinance our debt obligations or obtain waivers, and/or scale back or freeze our organic growth plans to manage our liquidity and capital resources. As the Company seeks additional sources of financing, there can be no assurance that such financing would be available to the Company on favorable terms or at all. The Company’s ability to obtain additional financing in the equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry.

 

During 2022, to fund ongoing operating and capital needs, the Company raised additional capital through the sale of equity securities and incremental debt financing. See Note 7 to the condensed consolidated financial statements for further details.

 

c.
Recent Accounting Pronouncements

 

 

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendment eliminates certain accounting models and simplifies the accounting for convertible instruments and enhances disclosures for convertible instruments and earnings per share. The amendments are effective for public entities excluding smaller reporting companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023 including interim periods within those fiscal years and early adoption is permitted. The Company adopted this guidance effective January 1, 2023 under the modified retrospective adoption approach and there was no material impact on its consolidated financial statements from the adoption.

 

 

Recently Issued Accounting Standards

 

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 that extends the period of time preparers can utilize the reference rate reform relief guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The Company is currently evaluating the impact the election of the optional expedient will have on the consolidated financial statements.

 

d.
Risks and Uncertainties

 

The COVID-19 pandemic and its related macroeconomic effects significantly impacted our business and results of operations in past years. At the height of the pandemic and as an aesthetics company, the surgical procedures involving our breast products were susceptible to local and national government restrictions. The inability or limited ability to perform non-emergency procedures significantly harmed our revenues starting in the second quarter of 2020 and lasting through the first quarter of 2022. While restrictions on non-emergency procedures have been removed, there is still substantial uncertainty as to when, if at all, the aesthetic procedures that the Company’s products are sold into will return to pre-pandemic levels.

In addition, the global economy, including the financial and credit markets, has recently experienced extreme volatility and disruptions, including increases to inflation rates, rising interest rates, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. The severity and duration of the impact of these conditions on our business cannot be predicted.

The estimates used for, but not limited to, determining the collectability of accounts receivable, fair value of long-lived assets and goodwill, and sales returns liability required could be impacted by the factors described above. While the full impact and duration of the factors noted above is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained.

v3.23.2
Discontinued Operations
 6 Months Ended
Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
2.
Discontinued Operations

 

On June 10, 2021, the Company completed the sale of its miraDry business (the “Sale”) to miraDry Acquisition Company, Inc., a Delaware corporation (“Buyer”), an entity affiliated with 1315 Capital II, LP, as a result of the Company’s strategic decision to focus investment on its core Plastic Surgery segment. The Sale was made pursuant to the terms and conditions of the Asset Purchase Agreement (the “Purchase Agreement”), dated May 11, 2021, among the Company and certain of its subsidiaries, Buyer, and, solely for purposes of Section 8.14 of the Purchase Agreement, 1315 Capital II, LP. The aggregate purchase price was $10.0 million, which after certain adjustments for agreed upon changes in the estimated net asset value amount of purchased assets and assumed liabilities resulted in net cash proceeds of $11.3 million to the Company on the date of close. In October 2021, the Company finalized the transaction and paid $3.2 million to the Buyer in accordance with the agreed upon post close changes in the net asset value and recognized a loss on sale of $2.5 million.

In accordance with the Purchase Agreement, assumed liabilities did not include product liabilities, environmental, and employee claims arising prior to the closing date. The Purchase Agreement also included customary representations and warranties, as well as certain covenants, including, among other things, that: (i) the Company will abide by certain non-solicitation, exclusivity, and non-competition covenants, and (ii) the Company would enter into a transition services agreement (“TSA”) to provide certain transition services related to the business.

 

Under the TSA, the Company provided certain post-closing services to the Buyer related to the miraDry business for a period of six months, including accounting, accounts receivable support, customer service, IT, regulatory, quality assurance, and clinical support. As consideration for these services, the Buyer reimbursed the Company for direct and certain indirect costs, as well as certain overhead or administrative expenses related to operating the business. The Company recognized $0.1 million of TSA fees and cost reimbursements in operating expenses from continuing operations in the condensed consolidated statement of operations for the six months ended June 30, 2022. Since the closing date, the Company has received $0.3 million relating to the TSA services and has recorded a receivable of $0.1 million within other current assets in the condensed consolidated balance sheets. In connection with the accounts receivable support under the TSA, since the closing date the Company received $2.3 million in customer payments and has remitted $2.3 million to the Buyer. As of June 30, 2023, the Company does not have a payable to the Buyer on the condensed consolidated balance sheets.

 

Additionally, the Company and the Buyer entered into a sublease agreement whereby the Buyer subleased the miraDry office space in Santa Clara, CA. The sublease term was for an initial period of six months, with subsequent option periods for up to a total of twenty-four months. Following the initial period, the Buyer exercised an additional period of six months, and an extension of twelve months thereafter. The sublease expired in March 2023. During the three and six months ended June 30, 2023, the Company recognized $0.1 million and $0.4 million, respectively of sublease income in general and administrative expenses in the consolidated statements of operations.

The Sale met the discontinued operations criteria given that the business is a component and represented a strategic shift. The following table presents the aggregate carrying amounts of major classes of assets and liabilities of discontinued operations (in thousands):

 

 

June 30,

 

 

 

 

2023

 

 

 

Assets of discontinued operations:

 

 

 

 

Prepaid expenses and other current assets

$

4

 

 

 

Total assets of discontinued operations

$

4

 

 

 

Liabilities of discontinued operations:

 

 

 

 

Accounts payable

$

6

 

 

 

Accrued and other current liabilities

 

209

 

 

 

Total liabilities of discontinued operations

$

215

 

 

 

 

The results of operations for the miraDry business were included in loss from discontinued operations on the accompanying condensed consolidated statements of operations. The following table provides information regarding the results of discontinued operations (in thousands):

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

 

 

2022

 

 

 

 

2022

 

Net sales

 

 

$

—

 

 

 

 

$

—

 

Cost of goods sold

 

 

 

—

 

 

 

 

 

—

 

Gross profit

 

 

 

—

 

 

 

 

 

—

 

Operating expenses

 

 

 

58

 

 

 

 

 

114

 

Loss from operations of discontinued operations

 

 

 

(58

)

 

 

 

 

(114

)

Other income (expense), net

 

 

 

—

 

 

 

 

 

—

 

Loss from discontinued operations before income taxes

 

 

 

(58

)

 

 

 

 

(114

)

Loss on sale of discontinued operations before income taxes

 

 

 

—

 

 

 

 

 

—

 

Total loss from discontinued operations before income taxes

 

 

 

(58

)

 

 

 

 

(114

)

Income tax expense (benefit)

 

 

 

—

 

 

 

 

 

—

 

Loss from discontinued operations, net of income taxes

 

 

$

(58

)

 

 

 

$

(114

)

 

The results of the miraDry business, including the results of operations, cashflows, and related assets and liabilities are reported as discontinued operations for the period ended June 30, 2023.

v3.23.2
Revenue
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Revenue
3.
Revenue

The Company generates revenue primarily through the sale and delivery of promised goods or services to customers. Sales prices are documented in the executed sales contract, purchase order or order acknowledgement prior to the transfer of control to the customer. Typical payment terms are 30 days.

Revenue contracts may include multiple products or services, each of which is considered a separate performance obligation. Performance obligations typically include the delivery of promised products, such as breast implants, tissue expanders, BIOCORNEUM, Viality, and SimpliDerm, along with service-type warranties. Other deliverables are sometimes promised but are ancillary and insignificant in the context of the contract as a whole. Revenue is allocated to each performance obligation based on its relative standalone selling price. The Company determines standalone selling prices based on observable prices for all performance obligations with the exception of the service-type warranty under the Platinum20 Limited Warranty Program, or "Platinum20".

The Company introduced Platinum20 in May 2018 on all breast implants implanted in the United States or Puerto Rico on or after May 1, 2018. Additionally, Platinum20 Program applies to all breast implants that are implanted in Canada on or after March 23, 2022. Platinum20 provides for financial assistance for revision surgeries and no-charge contralateral replacement implants upon the occurrence of certain qualifying events. The Company considers Platinum20 to have an assurance warranty component and a service warranty component. The assurance component is recorded as a warranty liability at the time of sale. The Company considers the service warranty component as an additional performance obligation and defers revenue at the time of sale using the expected cost plus a margin approach for the performance obligation. Inputs into the expected cost plus a margin approach include historical incidence rates, estimated replacement costs, estimated financial assistance payouts and an estimated margin.

The liability for unsatisfied performance obligations under the service warranty as of June 30, 2023 were as follows (in thousands):

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

Balance as of December 31, 2022

 

$

3,508

 

Additions and adjustments, net

 

 

274

 

Revenue recognized

 

 

(1,352

)

Balance as of June 30, 2023

 

$

2,430

 

Less short-term portion

 

 

(415

)

Long-term portion

 

$

2,015

 

 

The liability for the short-term portion is included in “Accrued and other current liabilities” and the long-term portion is included in “Other liabilities” in the condensed consolidated balance sheets.

 

Revenue from service warranties are recognized ratably over the term of the agreement. Specifically for Platinum20, the performance obligations are satisfied at the time that the benefits are provided and are expected to be satisfied ratably over the 3 to 24 month period following sale of the product for financial assistance and 20 years for product replacement.

 

For delivery of promised products, control transfers and revenue is recognized upon shipment, unless the contractual arrangement requires transfer of control when products reach their destination, for which revenue is recognized once the product arrives at its destination. A portion of the Company’s revenue is generated from the sale of consigned inventory maintained at doctor, hospital, and clinic locations. For these products, revenue is recognized at the time the Company is notified by the customer that the product has been used, not when the consigned products are delivered to the customer’s location.

 

Sales Return Liability

 

With the exception of the Company’s BIOCORNEUM scar management products, Viality, inventory held on consignment, and products sold to international customers, the Company allows for the return of products from customers within six months after the original sale, which is accounted for as variable consideration. A sales return liability is established based on estimated returns using relevant historical experience taking into consideration recent gross sales and notifications of pending returns, as adjusted for changes in recent industry events and trends. Estimated future sales returns for the current and prior periods are recorded as a reduction of revenue and as a sales return liability in the current period. Actual sales returns for current and prior periods, in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period would be recorded and noted separately as a change in estimate. The following table provides a rollforward of the sales return liability (in thousands):

 

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Beginning balance

 

$

15,773

 

 

$

13,399

 

Addition to reserve for sales activity

 

 

98,719

 

 

 

86,279

 

Actual returns

 

 

(101,736

)

 

 

(87,184

)

Ending balance

 

$

12,756

 

 

$

12,494

 
v3.23.2
Fair Value of Financial Instruments
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Fair Value of Financial Instruments
4.
Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, customer deposits and sales return liability are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the contingent consideration and the convertible feature related to the convertible note are discussed in Note 5. As discussed in Note 5, the fair value of the convertible notes conversion features has been reclassified to equity in the current year and the conversion features no longer requires measurement at fair value. The convertible notes are carried at amortized cost on the condensed consolidated balance sheet.

The fair value of the long-term debt is based on the amount of future cash flows associated with the instrument discounted using the Company’s market rate. As of June 30, 2023 and December 31, 2022, the carrying value and fair value of the convertible note were as follows (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Carrying value

 

 

 

 

 

 

Convertible Note

 

$

41,635

 

 

$

40,423

 

2022 Note

 

$

16,162

 

 

$

15,396

 

 

 

 

 

 

 

 

Fair value

 

 

 

 

 

 

Convertible Note

 

$

35,574

 

 

$

33,794

 

2022 Note

 

$

18,250

 

 

$

16,495

 
v3.23.2
Balance Sheet Components
 6 Months Ended
Jun. 30, 2023
Balance Sheet Related Disclosures [Abstract]  
Balance Sheet Components
5.
Balance Sheet Components
a.
Inventories

Inventories consist of the following (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Raw materials

 

$

3,268

 

 

$

2,765

 

Work in progress

 

 

2,947

 

 

 

4,245

 

Finished goods

 

 

30,192

 

 

 

31,438

 

Finished goods - right of return

 

 

3,001

 

 

 

4,244

 

 

 

$

39,408

 

 

$

42,692

 

 

b.
Property and Equipment

Property and equipment, net consist of the following (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Leasehold improvements

 

$

6,361

 

 

$

6,264

 

Manufacturing equipment and tooling

 

 

11,714

 

 

 

11,259

 

Computer equipment

 

 

1,771

 

 

 

1,690

 

Software

 

 

6,668

 

 

 

6,393

 

Furniture and fixtures

 

 

1,200

 

 

 

1,205

 

 

 

27,714

 

 

 

26,811

 

Less accumulated depreciation

 

 

(13,730

)

 

 

(11,870

)

 

$

13,984

 

 

$

14,941

 

depreciation expense

Depreciation expense for the three months ended June 30, 2023 and 2022 was $0.9 million and $0.7 million, respectively. Depreciation expense for the six months ended June 30, 2023 and 2022 was $1.9 million and $1.5 million, respectively. There were no impairments recorded during the six months ended June 30, 2023 and 2022.

 

c.
Goodwill and Other Intangible Assets, net

Following the sale of the miraDry business, the Company has one reporting unit, Plastic Surgery, formerly known as Breast Products. The Company evaluates goodwill for impairment at least annually on October 1st and whenever circumstances suggest that goodwill may be impaired.

The carrying amount of goodwill is $9.2 million for the years ended June 30, 2023 and December 31, 2022.

 

The components of the Company’s other intangible assets consist of the following (in thousands):

 

 

Average

 

 

 

 

 

 

Amortization

 

 

June 30, 2023

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(4,592

)

 

$

348

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(489

)

 

 

311

 

Manufacturing know-how

 

 

19

 

 

 

8,240

 

 

 

(2,893

)

 

 

5,347

 

Developed technology

 

 

8

 

 

 

21,166

 

 

 

(3,741

)

 

 

17,425

 

Total definite-lived intangible assets

 

 

 

$

35,146

 

 

$

(11,715

)

 

$

23,431

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

Total trade names - indefinite-lived

 

 

 

 

 

450

 

 

 

—

 

 

 

450

 

Total definite and indefinite-lived intangibles

 

 

 

 

$

35,596

 

 

$

(11,715

)

 

$

23,881

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

 

December 31, 2022

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(4,493

)

 

$

447

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(456

)

 

 

344

 

Manufacturing know-how

 

 

19

 

 

 

8,240

 

 

 

(2,479

)

 

 

5,761

 

Developed technology

 

 

8

 

 

 

21,163

 

 

 

(2,489

)

 

 

18,674

 

Total definite-lived intangible assets

 

 

 

$

35,143

 

 

$

(9,917

)

 

$

25,226

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

Total trade names - indefinite-lived

 

 

 

 

 

450

 

 

 

—

 

 

 

450

 

Total definite and indefinite-lived intangibles

 

 

 

 

$

35,593

 

 

$

(9,917

)

 

$

25,676

 

 

Amortization expense for both the three months ended June 30, 2023 and 2022 was $0.9 million respectively. Amortization expense for the six months ended June 30, 2023 and 2022 was $1.8 and $1.9 million respectively. Amortization expense is recorded in general and administrative expense in the condensed consolidated statement of operations, with the exception of manufacturing know-how and developed technology, which is recorded in cost of goods sold. The following table summarizes the future estimated amortization expense relating to the Company's definite-lived intangible assets as of June 30, 2023 (in thousands):

 

 

Amortization

 

Period

 

Expense

 

2023

 

$

1,886

 

2024

 

 

3,628

 

2025

 

 

3,485

 

2026

 

 

3,312

 

2027

 

 

3,230

 

Thereafter

 

 

7,890

 

 

$

23,431

 

 

d.
Accrued and Other Current Liabilities

Accrued and other current liabilities consist of the following (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Accrued payroll and bonuses

 

$

4,731

 

 

$

4,962

 

Accrued severance

 

 

589

 

 

 

1,232

 

Accrued commissions

 

 

1,405

 

 

 

3,017

 

Deferred and contingent consideration, current portion

 

 

3,031

 

 

 

3,030

 

Lease liabilities

 

 

2,053

 

 

 

1,823

 

Other

 

 

5,400

 

 

 

8,535

 

 

$

17,209

 

 

$

22,599

 

 

e.
Warranty Reserve

The following table provides a rollforward of the accrued assurance-type warranties (in thousands):

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Balance as of January 1

 

$

8,828

 

 

$

2,505

 

Warranty costs incurred during the period

 

 

(404

)

 

 

(266

)

Changes in accrual related to warranties issued during the period

 

 

902

 

 

 

513

 

Changes in accrual related to pre-existing warranties

 

 

(9

)

 

 

12

 

Balance as of June 30

 

$

9,317

 

 

$

2,764

 

Less short-term portion

 

$

(539

)

 

$

—

 

Long-term portion

 

$

8,778

 

 

$

2,764

 

 

As of June 30, 2023 and 2022, the liability for the long-term balance is included in “Warranty reserve”, and the short-term portion is included in “Accrued and other current liabilities”.

 

f.
Liabilities measured at fair value

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

•
Level 1 — Quoted prices in active markets for identical assets or liabilities.
•
Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.
•
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Contingent consideration

The contingent consideration balance consists of milestone payments related to the acquisition of Viality and future royalty payments related to the acquisition of BIOCORNEUM.

The Company assessed the fair value of all contingent consideration using a Monte-Carlo simulation model. The contingent consideration related to Viality is based on the achievement of certain clinical endpoints following the completion of a study measuring retention rates using the fat transfer products. The significant assumptions utilized in the fair value measurement was risk-free rate, the probable retention rate based on historical data and the Company's equity volatility of 125%. Any subsequent changes to the fair value of contingent consideration will be recorded as an adjustment to the carrying value of the assets acquired.

The contingent consideration related to the acquisition of BIOCORNEUM consists of royalty obligations based on future net sales for a defined term, beginning in 2024. The significant assumption utilized in the fair value measurement was the discount rate, which was 24.0%.

As these inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3.

 

 

Derivative liability

The Company identified certain embedded derivatives related to the conversion features of the Convertible Notes. Refer to Note 7 to the unaudited condensed consolidated financial statements for further details on the Convertible Notes. In accordance with ASC 815-40, Derivatives and Hedging Activities, the embedded conversion options contained within the Convertible Notes were accounted for as derivative liabilities at the date of issuance and shall be adjusted to fair value through each reporting date. The Company utilized a binomial lattice model to calculate the fair value of the embedded derivatives. Significant observable and unobservable inputs include, conversion price, stock price, dividend rate, expected volatility, risk-free rate, and the probability of conversion to common shares at the Base Conversion Rate in the event of a major transaction (e.g., a change in control). The binomial lattice model is a Level 3 valuation technique because it requires the development of significant internal assumptions in addition to observable market indicators.

 

On January 19, 2023, the Company effected a Reverse Stock Split, and upon the effectiveness of the Reverse Stock Split, the Company deemed it appropriate to reassess the conversion features of its Convertible Notes. As noted above, the conversion features were separately bifurcated and accounted for as embedded derivatives. Based on the Company’s reassessment, it has concluded that the conversion features meet the criteria for equity classification and has reclassified the fair value of the bifurcated conversion features to “Additional paid in capital” on the condensed consolidated balance sheet.

 

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 and indicate the level of the fair value hierarchy utilized to determine such fair value (in thousands):

 

 

 

Fair Value Measurements as of

 

 

 

June 30, 2023 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

2,908

 

 

$

2,908

 

 

$

—

 

 

$

—

 

 

$

2,908

 

 

$

2,908

 

 

 

 

Fair Value Measurements as of

 

 

 

December 31, 2022 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Liability for embedded derivative

 

$

—

 

 

$

—

 

 

$

880

 

 

$

880

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

2,815

 

 

$

2,815

 

 

$

—

 

 

$

—

 

 

$

3,695

 

 

$

3,695

 

 

The following table provides a rollforward of the aggregate fair values of the Company’s liabilities for which fair value is determined by Level 3 inputs (in thousands):

 

 

 

Fair Value Measurements

 

Balance, December 31, 2022

 

$

3,695

 

Embedded derivative reclassified to equity

 

 

(880

)

Change in fair value – contingent consideration

 

 

93

 

Balance, June 30, 2023

 

$

2,908

 

 

The liability for the current portion of contingent consideration is included in “Accrued and other current liabilities” and the long-term portion is included in “Deferred and contingent consideration” in the condensed consolidated balance sheets.

 

The liability for the embedded derivative is recorded as “Derivative liability” in the consolidated balance sheet.

The Company recognizes changes in the fair value of the derivative liability as “Change in fair value of derivative liability” in the consolidated statement of operations and changes in the contingent consideration are recognized in “General and administrative” expense in the consolidated statement of operations.
v3.23.2
Leases
 6 Months Ended
Jun. 30, 2023
Leases [Abstract]  
Leases
6.
Leases

 

Components of lease expense were as follows:

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Lease Cost

 

Classification

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating lease cost

 

Operating expenses

 

$

465

 

 

$

437

 

 

 

930

 

 

$

851

 

Operating lease cost

 

Cost of goods sold

 

 

98

 

 

 

107

 

 

 

195

 

 

 

221

 

Sublease income

 

Operating expenses

 

 

(85

)

 

 

(306

)

 

 

(365

)

 

 

(538

)

Total operating lease cost

 

 

 

$

478

 

 

$

238

 

 

$

760

 

 

$

534

 

Finance lease cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

Operating expenses

 

$

(6

)

 

$

—

 

 

$

4

 

 

$

3

 

Amortization of right-of-use assets

 

Cost of goods sold

 

 

6

 

 

 

12

 

 

 

14

 

 

 

23

 

Interest on lease liabilities

 

Other income (expense), net

 

 

—

 

 

 

1

 

 

 

—

 

 

 

2

 

Total finance lease cost

 

 

 

$

—

 

 

$

13

 

 

$

18

 

 

$

28

 

Variable lease cost

 

Cost of goods sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

 

 

$

478

 

 

$

251

 

 

$

778

 

 

$

562

 

 

Short-term lease expense for the three and six months ended June 30, 2023 and 2022 was not material.

 

Supplemental cash flow information related to operating and finance leases for the six months ended June 30, 2023 was as follows (in thousands):

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash outflows from operating leases

 

$

642

 

 

$

892

 

Operating cash outflows from finance leases

 

$

10

 

 

$

27

 

 

Supplemental balance sheet information related to operating and finance leases was as follows (in thousands, except lease term and discount rate):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Reported as:

 

 

 

 

 

 

Right-of-use assets, net

 

 

 

 

 

 

Operating lease right-of-use assets

 

$

5,899

 

 

$

6,710

 

Finance lease right-of-use assets

 

$

276

 

 

 

294

 

Total right-of-use assets

 

 

6,175

 

 

 

7,004

 

Accrued and other current liabilities

 

 

 

 

 

 

Operating lease liabilities

 

$

2,052

 

 

$

1,796

 

Finance lease liabilities

 

 

1

 

 

 

27

 

Lease liabilities

 

 

 

 

 

 

Operating lease liabilities

 

 

4,437

 

 

 

5,517

 

Finance lease liabilities

 

 

—

 

 

 

1

 

Total lease liabilities

 

$

6,490

 

 

$

7,341

 

Weighted average remaining lease term (years)

 

 

 

 

 

 

Operating leases

 

 

4.34

 

 

 

5.00

 

Finance leases

 

 

0.67

 

 

 

1.00

 

Weighted average discount rate

 

 

 

 

 

 

Operating leases

 

 

9.30

%

 

 

9.11

%

Finance leases

 

 

6.90

%

 

 

6.90

%

 

 

As of June 30, 2023, maturities of the Company’s operating and finance lease liabilities and sublease income are as follows (in thousands):

 

Period

 

Operating leases

 

 

Finance leases

 

 

Total

 

 

Sublease income

 

2023

 

$

1,326

 

 

$

1

 

 

$

1,327

 

 

$

(113

)

2024

 

 

2,153

 

 

 

—

 

 

 

2,153

 

 

 

(231

)

2025

 

 

1,244

 

 

 

—

 

 

 

1,244

 

 

 

(39

)

2026

 

 

1,209

 

 

 

—

 

 

 

1,209

 

 

 

—

 

2027

 

 

1,061

 

 

 

—

 

 

 

1,061

 

 

 

—

 

2028 and thereafter

 

 

1,055

 

 

 

—

 

 

 

1,055

 

 

 

—

 

Total lease payments (receipts)

 

$

8,048

 

 

$

1

 

 

$

8,049

 

 

$

(383

)

Less imputed interest

 

 

1,559

 

 

 

—

 

 

 

1,559

 

 

 

 

Total lease liabilities

 

$

6,489

 

 

$

1

 

 

$

6,490

 

 

 

 
v3.23.2
Debt
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Debt
7.
Debt

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Convertible Note

 

$

50,000

 

 

$

50,000

 

2022 Note *

 

 

23,449

 

 

 

23,449

 

Total carrying amount

 

 

73,449

 

 

 

73,449

 

Unamortized debt discount and issuance costs

 

 

(15,653

)

 

 

(18,043

)

Total - carrying amount, net

 

$

57,796

 

 

$

55,406

 

 

*2022 Note includes exit fees of $0.45 million – included in principal and unamortized debt discount and issuance costs

 

Convertible and 2022 Note

 

On October 12, 2022, the Company, entered into the “Restated Agreement” that amends and restates the Existing Agreement with Deerfield. In connection with the Restated Agreement, the Company and Deerfield entered into an Exchange Agreement pursuant to which Deerfield exchanged $10.0 million of principal under the Original Note for securities of the Company, reducing the outstanding principal amount of the original convertible note to $50.0 million. Additionally, on the date of the Restated Agreement and pursuant to the terms thereof, the Company issued and sold an additional senior secured convertible note in a principal amount of $23.0 million (the “2022 Note” and, together with the Original Note, the “Convertible Notes”).

 

Pursuant to the Convertible Notes, Deerfield has the option to demand repayment of all outstanding principal, and any unpaid interest accrued thereon and any other amounts payable under the Restated Agreement (including the Exit Fee (in the case of the 2022 Note) and any make whole amounts), in connection with a Major Transaction (as defined in the Convertible Notes), which shall include, among others, any acquisition or other change of control of the Company; the sale or transfer of assets of the Company equal to more than 50% of the Enterprise Value (as defined in the Convertible Notes) of the Company; a liquidation, bankruptcy or other dissolution of the Company; or if at any time shares of the Company’s common stock are not listed on an Eligible Market (as defined in the Convertible Notes). The Convertible Notes are subject to specified events of default, the occurrence of which would entitle Deerfield to immediately demand repayment of all outstanding principal and accrued interest on the Convertible Note. Such events of default include, among others, failure to make any payment under the Convertible Note when due, failure to observe or perform any covenant under the Restated Agreement or the other transaction documents related thereto (subject to a standard cure period), the failure of the Company to be able to pay debts as they come due, the commencement of bankruptcy or insolvency proceedings against the Company, a material judgment levied against the Company and a material default by the Company under the Convertible Note.

On the payment, repayment, dischargement, redemption or prepayment of the 2022 Note or upon a Successor Major Transaction Conversion (as defined in the 2022 Note), the Company will pay a non-refundable exit fee equal to 1.95% of the 2022 Note so paid, repaid, discharged, redeemed or prepaid, as the case may be.

The Company used the proceeds from the new 2022 Note to repay in full the outstanding amounts under its Second Amended and Restated Credit and Security Agreement (Term Loan), dated December 31, 2021, by and among the Company, certain of its wholly owned subsidiaries, the lenders party thereto and MidCap Financial Trust, as administrative agent and collateral agent (as amended, amended and restated, supplemented or otherwise modified prior to the date hereof, the “MidCap Term Credit Agreement”) and repay in full the outstanding amounts, and terminate the outstanding commitments, under that certain Amended and Restated Credit and Security Agreement (Revolving Loan), dated as of July 1, 2019, by and among the Company, certain of its wholly owned subsidiaries, the lenders party thereto and MidCap Funding IV Trust, as administrative and collateral agent (as amended, amended and restated, supplemented or otherwise modified prior to the date hereof, the “MidCap Revolving Credit Agreement”).

The Restated Agreement also provides for the issuance of warrants to purchase Common Stock (the “Warrants”) to the extent that the obligations under Restated Agreement and the Convertible Notes are prepaid. If issued, the Warrants will be exercisable on a cash or cashless (net exercise) basis with an initial exercise price equal to the conversion price of the Original Note and 2022 Note, respectively, for the number of Conversion Shares (as defined in the Convertible Notes) which the repaid amount would have been convertible into and will be subject to the Beneficial Ownership Cap, as well as certain other customary anti-dilution adjustments upon the occurrence of certain events such as stock splits, subdivisions, reclassifications or combinations of Common Stock consistent with those included in the Convertible Notes. The Warrants will also provide, at the election of each holder thereof, for the payment of the exercise price therefor by reduction of the principal amount of any outstanding Convertible Notes held by such holder. Upon the consummation of a “Major Transaction” (as defined in the Warrants and consistent with the term as used in the Convertible Notes), holders of the Warrants may elect to (i) have their Warrants redeemed by the Company for an amount equal to the Black-Scholes value of such Warrant, in cash or, if applicable, in the form of the consideration paid to the Company’s stockholders in a Major Transaction, or (ii) have such Warrants be assumed by the successor to the Company in a Major Transaction, if applicable. Holders of the Warrants are also entitled to participate in any dividends or distributions to holders of Common Stock at the time such dividends or distributions are paid to such stockholders. All Warrants under the Exchange Agreement with Deerfield, in connection with the Restated Agreement were exercised as of March 31, 2023. See Note 8 for additional details.

The Company may redeem all or any portion of the principal amount of the Convertible Notes for cash. Upon redemption of any Convertible Notes, the Company will issue Warrants covering the same number of shares of Common Stock underlying, and at an exercise price equal to the conversion price of, the redeemed Convertible Notes. The Convertible Notes provide for the optional redemption of the Convertible Notes without issuance of any Warrants or payment of any additional make whole amount (unless such Convertible Note is converted following receipt of an optional redemption notice but prior to payment of the redemption amount) provided that each of the following is greater than 130% of the conversion price then in effect.(1) the volume weighted average price of the Common Stock on each of any twenty (20) trading days during the period of thirty (30) consecutive trading days ending on the date on which the Company delivers an optional redemption notice, (2) the volume weighted average price of the Common Stock on the last trading day of such period and (3) the closing price of the Common Stock on the last trading day of such period. The Company may not effect any optional redemption during a delisting event or unless all conversion shares and warrant shares are freely tradable.

 

 

As of June 30, 2023, there was $73.5 million of outstanding principal, reduced by unamortized debt discount and issuance costs of $15.7 million related to the convertible note included in “Long-term debt” on the consolidated balance sheet. The Company amortizes the debt discount and debt issuance costs under the effective interest method over the term of the Note, at a resulting effective interest rate of approximately 12%. For the six months ended June 30, 2023 and 2022, the amortization of the convertible debt discount and issuance costs were $2.4 million and $1.6 million, respectively. Both were included in interest expense in the condensed consolidated statements of operations.

The Company is subject to a number of affirmative and restrictive covenants, including covenants regarding compliance with applicable laws and regulations, maintenance of property, payment of taxes, maintenance of insurance, business combinations, incurrence of additional indebtedness, prepayments of other unsecured indebtedness and transactions with affiliates, among other covenants.

 

 

Term Loan and Revolving Loan

 

As noted above, the Company used the proceeds from the new 2022 Note to repay in full the outstanding amounts under its Term Loan and Revolving loan.

 

Accordingly, for the current year there was no amount outstanding under the Term Loan and the Revolving Loan and no unamortized debt issuance costs related to the Term Loan and the Revolving Loan.

 

The amortization of debt issuance costs on the term loan and the revolving loan was $0.1 million and $0.3 million for the three months ended June 30, 2022 and the six months ended June 30, 2022, respectively, and was included in interest expense in the condensed consolidatedstatements of operations.

 

Future Principal Payments of Debt

 

The future schedule of principal payments for all outstanding debt as of June 30, 2023 was as follows (in thousands):

 

Fiscal Year

 

 

 

2023

 

 

—

 

2024

 

 

—

 

2025

 

 

—

 

2026

 

 

50,000

 

2027 and thereafter

 

 

23,449

 

Total

 

$

73,449

 
v3.23.2
Stockholders' Equity
 6 Months Ended
Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Stockholders' Equity
8.
Stockholders’ Equity

(a) Authorized Stock

The Company’s Amended and Restated Certificate of Incorporation authorizes the Company to issue 210,000,000 shares of common and preferred stock, consisting of 200,000,000 shares of common stock with $0.01 par value and 10,000,000 shares of preferred stock with $0.01 par value. As of June 30, 2023 and December 31, 2022, the Company had no preferred stock issued or outstanding.

 

(b) Issuance of Common Stock

2022 Follow-on Public Offering

In October 2022, the Company completed a follow-on public offering of 1,778,500 shares of common stock and pre-funded warrants to purchase up to 2,221,499 shares of common stock and warrants to purchase 3,999,999 shares of common stock, at an offering price of $3.80 per share of common stock and warrant and $3.70 per pre-funded warrant and warrant, before underwriting discounts and commissions. Net proceeds were approximately $14.1 million, after deducting underwriting discounts, debt issuance cost, commissions and estimated expenses payable by the Company. As of June 30, 2023 and December 31, 2022, there were 4,657,799 warrants outstanding related to the follow-on public offering.

Exchange Agreement with Deerfield

 

In October 2022, the Company entered into an Exchange Agreement with Deerfield, in connection with the Restated Agreement, pursuant to which Deerfield exchanged $10.0 million of principal under the Original Note for 296,774 shares of our common stock and a pre-funded warrant to purchase 1,054,395 shares of our common stock (the

"Exchange Warrants"), reducing the outstanding principal amount of the Original Note to $50.0 million. The Exchange Warrants are immediately exercisable, have an exercise price of $0.001 per share, and may be exercised on a cash or cashless basis at any time until all of the Exchange Warrants are exercised in full. Under the terms of the Exchange Warrants, a holder will not be entitled to exercise any portion of any such warrant, if, upon giving effect to such exercise, the aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates, any other persons acting as a group together with the holder or any of the holder’s affiliates, and any other persons whose beneficial ownership of Common Stock would or could be aggregated with the holder’s for purposes of Section 13(d) or Section 16 of the Securities Exchange Act of 1934, as amended) would exceed 4.985% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise.

 

The Exchange Agreement contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification obligations of the Company, other obligations of the parties, and termination provisions.

 

As of June 30, 2023 and December 31, 2022, there were 0 and 303,804 warrants outstanding, respectively, related to Exchange Agreement.

(c) Stock Option Plans

 

In April 2007, the Company adopted the 2007 Equity Incentive Plan, or 2007 Plan. The 2007 Plan provides for the granting of stock options to employees, directors and consultants of the Company. A total of 169,045 shares of the Company’s common stock were reserved for issuance under the 2007 Plan.

The Company’s board of directors adopted the 2014 Equity Incentive Plan, or 2014 Plan, in July 2014, and the stockholders approved the 2014 Plan in October 2014. The 2014 Plan became effective upon completion of the IPO on November 3, 2014, at which time the Company ceased granting awards under the 2007 Plan. A total of 102,750 shares of common stock were initially reserved for issuance under the 2014 Plan, subject to certain annual increases.

 

Pursuant to a board-approved Inducement Plan, the Company may issue NSOs and restricted stock unit awards which may only be granted to new employees of the Company and their affiliates in accordance with NASDAQ Stock Market Rule 5635(c)(4) as an inducement material to such individuals entering into employment with the Company.

As of June 30, 2023, a total of 314,016 shares of the Company’s common stock were available for issuance under the 2014 Plan. As of June 30, 2023, inducement grants for 528,221 shares of common stock have been awarded, and 303,496 shares of common stock were reserved for future issuance under the Inducement Plan.

 

On June 22, 2023, the Company registered an additional 511,128 shares of the Registrant’s common stock to be issued pursuant to the Registrant’s 2016 Equity Inducement Plan.

 

On April 17, 2023, the Company registered an additional 428,098 shares of the Registrant’s common stock to be issued pursuant to the Registrant’s 2014 Equity Incentive Plan.

 

Options under the 2007 Plan and the 2014 Plan may be granted for periods of up to ten years as determined by the Company’s board of directors, provided, however, that (i) the exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a more than 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. An NSO has no such exercise price limitations. NSOs under the Inducement Plan may be granted for periods of up to ten years as determined by the board of directors, provided, the exercise price will be not less than 100% of the estimated fair value of the shares on the date of grant. Options generally vest with 25% of the grant vesting on the first anniversary and the balance vesting monthly on a straight-lined basis over the requisite service period of three additional years for the award. Compensation expense is recognized on a straight-lined basis over the vesting term of one year based upon the probable performance target that will be met. The vesting provisions of individual options may vary but provide for vesting of at least 25% per year.

The following summarizes all option activity under the 2007 Plan, 2014 Plan and Inducement Plan:

 

 

 

 

 

Weighted

 

 

Weighted
average

 

 

 

 

 

 

average

 

 

remaining

 

 

 

Option

 

 

exercise

 

 

contractual

 

 

 

Shares

 

 

price

 

 

term (year)

 

Balance at December 31, 2022

 

 

89,678

 

 

$

42.78

 

 

 

7.11

 

Forfeited

 

 

(2,619

)

 

 

139.79

 

 

 

 

Balance at June 30, 2023

 

 

87,059

 

 

$

39.86

 

 

 

6.78

 

 

 

For stock-based awards the Company recognizes compensation expense based on the grant date fair value using the Black-Scholes option valuation model. Stock-based compensation expense related to stock options for both the three months ended June 30, 2023 and 2022 was $0.2 million. Stock-based compensation expense related to stock options for both the six months ended June 30, 2023 and 2022 was $0.3 million.

(d) Restricted Stock Units

The Company has issued restricted stock unit awards, or RSUs, under the 2014 Plan and the Inducement Plan. The RSUs issued to employees generally vest on a straight-line basis annually over a 3-year requisite service period. RSUs issued to non-employees generally vest either monthly or annually over the service term.

Activity related to RSUs is set forth below:

 

 

 

 

 

 

Weighted
average

 

 

 

Number

 

 

grant date

 

 

 

of shares

 

 

fair value

 

Balance at December 31, 2022

 

 

708,806

 

 

$

43.86

 

Granted

 

 

574,200

 

 

 

1.71

 

Vested

 

 

(147,924

)

 

 

24.91

 

Forfeited

 

 

(61,626

)

 

 

12.05

 

Balance at June 30, 2023

 

 

1,073,456

 

 

$

25.75

 

 

Stock-based compensation expense for RSUs for the three months ended June 30, 2023 and 2022 was $1.1 million and $1.8 million, respectively. Stock-based compensation expense for RSUs for the six months ended June 30, 2023 and 2022 was $2.5 million and $3.7 million, respectively. As of June 30, 2023, there was $5.7 million of total unrecognized compensation costs related to non-vested RSU awards. The cost is expected to be recognized over a weighted average period of approximately 1.49 years.

(e) Employee Stock Purchase Plan

The Company’s board of directors adopted the 2014 Employee Stock Purchase Plan, or ESPP, in July 2014, and the stockholders approved the ESPP in October 2014. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides for offering periods not to exceed 27 months, and each offering period will include purchase periods, which will be the approximately six-month period commencing with one exercise date and ending with the next exercise date. Employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the purchase date. A total of 255,500 shares of common stock were initially reserved for issuance under the ESPP, subject to certain annual increases.

During the six months ended June 30, 2023, employees purchased 144,447 shares of common stock at a weighted average price of $1.75 per share. As of June 30, 2023, the number of shares of common stock available for future

issuance for the ESPP was 115,837. On April 17, 2023, the Company registered an additional 107,024 shares of the Registrant’s common stock to be issued pursuant to the Registrant’s 2014 Employee Stock Purchase Plan.

The Company estimated the fair value of employee stock purchase rights using the Black-Scholes model. Stock-based compensation expense related to the ESPP for the three months ended June 30, 2023 and 2022 was $0.1 million and $0.2, respectively. Stock-based compensation expense related to the ESPP was $0.3 million for both the six months ended June 30, 2023 and 2022.
v3.23.2
Net Loss Per Share
 6 Months Ended
Jun. 30, 2023
Earnings Per Share [Abstract]  
Net Loss Per Share
9.
Net Loss Per Share

Basic net loss per share attributable to common stockholders is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted net loss per share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding, to the extent they are dilutive. Potential dilutive shares consist of shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock. Dilutive net loss per share is the same as basic net loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive (in thousands, except per share and share amounts).

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Loss from continuing operations

 

$

(9,477

)

 

 

$

(18,246

)

 

$

(22,369

)

 

$

(36,231

)

Loss from discontinued operations, net of income taxes

 

 

-

 

 

 

(58

)

 

 

-

 

 

(114

)

Net loss

 

$

(9,477

)

 

$

(18,304

)

 

$

(22,369

)

$

(36,345

)

Weighted average common shares outstanding, basic and diluted

 

 

11,205,000

 

 

 

 

6,264,954

 

 

 

11,589,311

 

 

 

6,249,356

 

Basic and diluted net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.85

)

 

 

$

(2.91

)

 

$

(1.93

)

 

$

(5.80

)

Discontinued operations

 

 

-

 

 

 

 

(0.01

)

 

 

-

 

 

 

(0.02

)

Basic and diluted net loss per share

 

$

(0.85

)

 

 

$

(2.92

)

 

$

(1.93

)

 

$

(5.82

)

 

The Company excluded the following weighted average potentially dilutive securities, outstanding for the three and six months ended June 30, 2023 and 2022, from the computation of diluted net loss per share attributable to common stockholders for the three and six months ended June 30, 2023 and 2022 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Stock issuable upon exercise of warrants

 

 

3,999,999

 

 

 

—

 

 

 

3,999,999

 

 

 

—

 

Stock issuable upon conversion of convertible note

 

 

4,118,181

 

 

 

1,463,415

 

 

 

4,118,181

 

 

 

1,463,415

 

 

Stock options to purchase common stock

 

 

475

 

 

 

—

 

 

 

1,216

 

 

 

250

 

 

Unvested RSUs

 

 

537,713

 

 

 

397,927

 

 

 

334,255

 

 

 

319,920

 

 

 

 

8,656,368

 

 

 

1,861,342

 

 

 

8,453,651

 

 

 

1,783,585

 

 
v3.23.2
Income Taxes
 6 Months Ended
Jun. 30, 2023
Income Tax Disclosure [Abstract]  
Income Taxes
10.
Income Taxes

The Company operates in several tax jurisdictions and is subject to taxes in each jurisdiction in which it conducts business. To date, the Company has incurred cumulative net losses and maintains a full valuation allowance on its net deferred tax assets due to the uncertainty surrounding realization of such assets. The Company had no tax expense for both the three and six months ended June 30, 2023 and 2022.

v3.23.2
Commitments and Contingencies
 6 Months Ended
Jun. 30, 2023
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies
11.
Commitments and Contingencies

The Company is subject to claims and assessment from time to time in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated.

Product Liability Litigation

 

On October 7, 2019, a lawsuit was filed in the Superior Court of the State of California against the Company and Silimed Industria de Implantes Ltda. (the Company’s former contract manufacturer). The lawsuit alleges that the Company’s textured breast implants caused certain of the plaintiffs to develop a condition known as breast implant associated anaplastic large cell lymphoma (“BIA-ALCL”), and that the Company is liable to the plaintiffs based on claims for strict liability (failure to warn), strict liability (defective manufacture), negligence and loss of consortium. On January 21, 2020, the Company filed a demurrer to the plaintiff’s complaint, which demurrer the Court granted in a tentative ruling dated March 9, 2021 with leave to replead. The Plaintiffs filed an amended complaint on April 6, 2021 and the Company filed a demurrer to that complaint on May 6, 2021. On October 25, 2021, the Court issued a ruling granting the Company’s demurrer in-part and denying it in-part, and gave plaintiffs twenty days to file an amendment complaint. On August 3, 2022, the Company entered into confidential settlement agreements with the plaintiffs resolving all disputes between them and dismissing the plaintiffs’ claims with prejudice. The Court granted the dismissal with prejudice on August 4, 2022.

On September 23, 2020, a lawsuit was filed in the Eastern District of Tennessee against the Company. The lawsuit alleges that the Company’s textured breast implants caused certain of the plaintiffs to develop a condition known as breast implant associated anaplastic large cell lymphoma (“BIA-ALCL”), and that the Company is liable to the plaintiffs based on claims for negligence, strict liability (manufacturing defects), strict liability (failure to warn), breach of express and implied warranties, and punitive damages. The Company filed a motion to dismiss the complaint on December 7, 2020. On February 28, 2022 the Court granted the Company’s motion, and dismissed the plaintiff’s complaint with prejudice. On March 28, 2022, the plaintiffs filed a motion to alter or amend the judgment. The Company opposed that motion on April 11, 2022. On March 31, 2023 the Court denied plaintiffs motion, and the plaintiffs have not filed any timely appeal from the Court’s denial of their motion.

 

Grand Jury and SEC Subpoenas

The Company received a grand jury subpoena dated September 30, 2022 from the U.S. Department of Justice (“DOJ”) requesting the production of materials concerning the trading activities of a former Chief Executive Officer of the Company in 2019 and 2020, including all documents and communications with the General Counsel regarding such activities. In addition, the SEC has subpoenaed documents and testimony from each of the Company and its General Counsel. Each of the SEC subpoenas is captioned “In the Matter of Trading in the Securities of Sientra, Inc.” The SEC subpoenas request, among other things, documents and communications relating to trading activities by each of the aforementioned individuals. The investigation by the SEC does not mean that the SEC has concluded that anyone has violated the law. Also, the investigation does not mean that the SEC has a negative opinion of any person, entity or security. On April 13, 2023, the DOJ informed the Company that the DOJ did not intend to pursue prosecutions relating to the subpoena and was closing its file with respect to the Company. The Company continues to cooperate with the SEC. The Company is, at this time, unable to predict what action, if any, might be taken in the future by the SEC as a result of the matters that are the subject of the subpoenas and investigation.
v3.23.2
Summary of Significant Accounting Policies (Policies)
 6 Months Ended
Jun. 30, 2023
Accounting Policies [Abstract]  
Basis of Presentation
a.
Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Sientra, Inc. (“Sientra”, the “Company”, “we”, “our”, or “us”) in this Quarterly Report on Form 10-Q have been prepared in accordance with U.S. generally accepted accounting principles, or "GAAP", and the rules and regulations of the U.S. Securities and Exchange Commission, or the "SEC". Accordingly, they do not include certain notes and financial presentations normally required under GAAP for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on April 18, 2023, or the Annual Report. The results for the three and six months ended June 30, 2023 are not necessarily indicative of results to be expected for the year ending December 31, 2023, any other interim periods, or any future year or period.

 

Reverse Stock Split

 

On January 19, 2023, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock, par value $0.01 per share (the “Common Stock”) by the filing of a Certificate of Amendment (the “Certificate”) with the Secretary of State of the State of Delaware pursuant to the Delaware General Corporation Law. The Reverse Stock Split became effective on January 19, 2023.

 

As a result of the Reverse Stock Split, every 10 shares of Common Stock issued and outstanding were automatically reclassified into one new share of common stock. The Reverse Stock Split did not modify any rights or preferences of the shares of Common Stock. Proportionate adjustments were made to the exercise or conversion prices and the number of shares underlying the Company’s outstanding equity awards, convertible securities and warrants, as well as to the number of shares issued and issuable under the Company’s equity incentive plans. The Common Stock issued pursuant to the Reverse Stock Split remained fully paid and non-assessable. The Reverse Stock Split did not affect the number of authorized shares of Common Stock or the par value of the Common Stock. All share information in the accompanying financial statements has been adjusted to reflect the results of the Reverse Stock Split.

 

Discontinued Operations of miraDry

As a result of the miraDry sale discussed in Note 2, the miraDry business met the criteria to be reported as discontinued operations. Therefore, the Company is reporting the historical results of miraDry, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein through the date of the Sale. Unless otherwise noted, the accompanying notes to the unaudited condensed consolidated financial statements have all been revised to reflect continuing operations only. Following the sale the Company has one operating segment in continuing operations named Plastic Surgery, formerly known as Breast Products.

Liquidity and Going Concern
b.
Liquidity and Going Concern

 

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with GAAP. The going concern basis of presentation assumes that the Company will continue in operation one year after the date these financial statements are issued and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business.

Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these condensed consolidated financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within control of the Company as of the date the condensed consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued.

Since the Company’s inception, it has incurred recurring losses and cash outflows from operations and the Company anticipates that losses will continue in the near term. During the six months ended June 30, 2023, the Company incurred net losses of $22.4 million and used $7.4 million of cash from continuing operations. As of June 30, 2023, the Company had cash and cash equivalents of $18.6 million. As a result of these conditions substantial doubt exists about our ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

In an effort to alleviate these conditions, management is currently evaluating various cost-saving measures in order to reduce operating expenses and cash outflows. However, the Company will need to generate a significant increase in net sales to further improve profitability and cash inflows, which is dependent upon continued growth in our Plastic Surgery segment and the launch of new products and partnerships. Additionally, we are evaluating various funding alternatives to improve liquidity and may seek to raise additional equity or debt capital, refinance our debt obligations or obtain waivers, and/or scale back or freeze our organic growth plans to manage our liquidity and capital resources. As the Company seeks additional sources of financing, there can be no assurance that such financing would be available to the Company on favorable terms or at all. The Company’s ability to obtain additional financing in the equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry.

 

During 2022, to fund ongoing operating and capital needs, the Company raised additional capital through the sale of equity securities and incremental debt financing. See Note 7 to the condensed consolidated financial statements for further details.

Recent Accounting Pronouncements
c.
Recent Accounting Pronouncements

 

 

Recently Adopted Accounting Standards

In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. The amendment eliminates certain accounting models and simplifies the accounting for convertible instruments and enhances disclosures for convertible instruments and earnings per share. The amendments are effective for public entities excluding smaller reporting companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023 including interim periods within those fiscal years and early adoption is permitted. The Company adopted this guidance effective January 1, 2023 under the modified retrospective adoption approach and there was no material impact on its consolidated financial statements from the adoption.

 

 

Recently Issued Accounting Standards

 

In December 2022, the FASB issued ASU 2022-06, Deferral of the Sunset Date of Topic 848 that extends the period of time preparers can utilize the reference rate reform relief guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional guidance to ease the potential burden in accounting for (or recognizing the effects of) reference rate reform on financial reporting. To ensure the relief in Topic 848 covers the period of time during which a significant number of modifications may take place, the ASU defers the sunset date of Topic 848 from December 31, 2022, to December 31, 2024, after which entities will no longer be permitted to apply the relief in Topic 848. The Company is currently evaluating the impact the election of the optional expedient will have on the consolidated financial statements.
Risks and Uncertainties
d.
Risks and Uncertainties

 

The COVID-19 pandemic and its related macroeconomic effects significantly impacted our business and results of operations in past years. At the height of the pandemic and as an aesthetics company, the surgical procedures involving our breast products were susceptible to local and national government restrictions. The inability or limited ability to perform non-emergency procedures significantly harmed our revenues starting in the second quarter of 2020 and lasting through the first quarter of 2022. While restrictions on non-emergency procedures have been removed, there is still substantial uncertainty as to when, if at all, the aesthetic procedures that the Company’s products are sold into will return to pre-pandemic levels.

In addition, the global economy, including the financial and credit markets, has recently experienced extreme volatility and disruptions, including increases to inflation rates, rising interest rates, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. The severity and duration of the impact of these conditions on our business cannot be predicted.

The estimates used for, but not limited to, determining the collectability of accounts receivable, fair value of long-lived assets and goodwill, and sales returns liability required could be impacted by the factors described above. While the full impact and duration of the factors noted above is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained.

v3.23.2
Discontinued Operations (Tables)
 6 Months Ended
Jun. 30, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Schedule of Disposal Groups Including Discontinued Operations Balance Sheet and Income Statement The following table presents the aggregate carrying amounts of major classes of assets and liabilities of discontinued operations (in thousands):

 

 

June 30,

 

 

 

 

2023

 

 

 

Assets of discontinued operations:

 

 

 

 

Prepaid expenses and other current assets

$

4

 

 

 

Total assets of discontinued operations

$

4

 

 

 

Liabilities of discontinued operations:

 

 

 

 

Accounts payable

$

6

 

 

 

Accrued and other current liabilities

 

209

 

 

 

Total liabilities of discontinued operations

$

215

 

 

 
The following table provides information regarding the results of discontinued operations (in thousands):

 

 

Three Months Ended

 

 

Six Months Ended

 

 

June 30,

 

 

June 30,

 

 

 

 

2022

 

 

 

 

2022

 

Net sales

 

 

$

—

 

 

 

 

$

—

 

Cost of goods sold

 

 

 

—

 

 

 

 

 

—

 

Gross profit

 

 

 

—

 

 

 

 

 

—

 

Operating expenses

 

 

 

58

 

 

 

 

 

114

 

Loss from operations of discontinued operations

 

 

 

(58

)

 

 

 

 

(114

)

Other income (expense), net

 

 

 

—

 

 

 

 

 

—

 

Loss from discontinued operations before income taxes

 

 

 

(58

)

 

 

 

 

(114

)

Loss on sale of discontinued operations before income taxes

 

 

 

—

 

 

 

 

 

—

 

Total loss from discontinued operations before income taxes

 

 

 

(58

)

 

 

 

 

(114

)

Income tax expense (benefit)

 

 

 

—

 

 

 

 

 

—

 

Loss from discontinued operations, net of income taxes

 

 

$

(58

)

 

 

 

$

(114

)
v3.23.2
Revenue (Tables)
 6 Months Ended
Jun. 30, 2023
Revenue from Contract with Customer [Abstract]  
Schedule of Rollforward of Sales Return Liability

The liability for unsatisfied performance obligations under the service warranty as of June 30, 2023 were as follows (in thousands):

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

Balance as of December 31, 2022

 

$

3,508

 

Additions and adjustments, net

 

 

274

 

Revenue recognized

 

 

(1,352

)

Balance as of June 30, 2023

 

$

2,430

 

Less short-term portion

 

 

(415

)

Long-term portion

 

$

2,015

 
Schedule of Liability for Unsatisfied Performance Obligations Under Service Warranty

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Beginning balance

 

$

15,773

 

 

$

13,399

 

Addition to reserve for sales activity

 

 

98,719

 

 

 

86,279

 

Actual returns

 

 

(101,736

)

 

 

(87,184

)

Ending balance

 

$

12,756

 

 

$

12,494

 
v3.23.2
Fair Value of Financial Instruments (Tables)
 6 Months Ended
Jun. 30, 2023
Fair Value Disclosures [Abstract]  
Schedule of Carrying Value and Fair Value of Convertible Note As of June 30, 2023 and December 31, 2022, the carrying value and fair value of the convertible note were as follows (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Carrying value

 

 

 

 

 

 

Convertible Note

 

$

41,635

 

 

$

40,423

 

2022 Note

 

$

16,162

 

 

$

15,396

 

 

 

 

 

 

 

 

Fair value

 

 

 

 

 

 

Convertible Note

 

$

35,574

 

 

$

33,794

 

2022 Note

 

$

18,250

 

 

$

16,495

 
v3.23.2
Balance Sheet Components (Tables)
 6 Months Ended
Jun. 30, 2023
Balance Sheet Related Disclosures [Abstract]  
Schedule of inventories

Inventories consist of the following (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Raw materials

 

$

3,268

 

 

$

2,765

 

Work in progress

 

 

2,947

 

 

 

4,245

 

Finished goods

 

 

30,192

 

 

 

31,438

 

Finished goods - right of return

 

 

3,001

 

 

 

4,244

 

 

 

$

39,408

 

 

$

42,692

 
Schedule of property and equipment, net

Property and equipment, net consist of the following (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Leasehold improvements

 

$

6,361

 

 

$

6,264

 

Manufacturing equipment and tooling

 

 

11,714

 

 

 

11,259

 

Computer equipment

 

 

1,771

 

 

 

1,690

 

Software

 

 

6,668

 

 

 

6,393

 

Furniture and fixtures

 

 

1,200

 

 

 

1,205

 

 

 

27,714

 

 

 

26,811

 

Less accumulated depreciation

 

 

(13,730

)

 

 

(11,870

)

 

$

13,984

 

 

$

14,941

 

depreciation expense
Schedule of Other Intangible assets

The components of the Company’s other intangible assets consist of the following (in thousands):

 

 

Average

 

 

 

 

 

 

Amortization

 

 

June 30, 2023

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(4,592

)

 

$

348

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(489

)

 

 

311

 

Manufacturing know-how

 

 

19

 

 

 

8,240

 

 

 

(2,893

)

 

 

5,347

 

Developed technology

 

 

8

 

 

 

21,166

 

 

 

(3,741

)

 

 

17,425

 

Total definite-lived intangible assets

 

 

 

$

35,146

 

 

$

(11,715

)

 

$

23,431

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

Total trade names - indefinite-lived

 

 

 

 

 

450

 

 

 

—

 

 

 

450

 

Total definite and indefinite-lived intangibles

 

 

 

 

$

35,596

 

 

$

(11,715

)

 

$

23,881

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

 

December 31, 2022

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(4,493

)

 

$

447

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(456

)

 

 

344

 

Manufacturing know-how

 

 

19

 

 

 

8,240

 

 

 

(2,479

)

 

 

5,761

 

Developed technology

 

 

8

 

 

 

21,163

 

 

 

(2,489

)

 

 

18,674

 

Total definite-lived intangible assets

 

 

 

$

35,143

 

 

$

(9,917

)

 

$

25,226

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

Total trade names - indefinite-lived

 

 

 

 

 

450

 

 

 

—

 

 

 

450

 

Total definite and indefinite-lived intangibles

 

 

 

 

$

35,593

 

 

$

(9,917

)

 

$

25,676

 
Schedule of Future Estimated Amortization Expense The following table summarizes the future estimated amortization expense relating to the Company's definite-lived intangible assets as of June 30, 2023 (in thousands):

 

 

Amortization

 

Period

 

Expense

 

2023

 

$

1,886

 

2024

 

 

3,628

 

2025

 

 

3,485

 

2026

 

 

3,312

 

2027

 

 

3,230

 

Thereafter

 

 

7,890

 

 

$

23,431

 
Schedule of accrued and other current liabilities

Accrued and other current liabilities consist of the following (in thousands):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Accrued payroll and bonuses

 

$

4,731

 

 

$

4,962

 

Accrued severance

 

 

589

 

 

 

1,232

 

Accrued commissions

 

 

1,405

 

 

 

3,017

 

Deferred and contingent consideration, current portion

 

 

3,031

 

 

 

3,030

 

Lease liabilities

 

 

2,053

 

 

 

1,823

 

Other

 

 

5,400

 

 

 

8,535

 

 

$

17,209

 

 

$

22,599

 
Schedule of rollforward of the accrued assurance-type warranties

The following table provides a rollforward of the accrued assurance-type warranties (in thousands):

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Balance as of January 1

 

$

8,828

 

 

$

2,505

 

Warranty costs incurred during the period

 

 

(404

)

 

 

(266

)

Changes in accrual related to warranties issued during the period

 

 

902

 

 

 

513

 

Changes in accrual related to pre-existing warranties

 

 

(9

)

 

 

12

 

Balance as of June 30

 

$

9,317

 

 

$

2,764

 

Less short-term portion

 

$

(539

)

 

$

—

 

Long-term portion

 

$

8,778

 

 

$

2,764

 
Schedule of Company's Liabilities that are Measured at Fair Value on a Recurring Basis

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of June 30, 2023 and December 31, 2022 and indicate the level of the fair value hierarchy utilized to determine such fair value (in thousands):

 

 

 

Fair Value Measurements as of

 

 

 

June 30, 2023 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

2,908

 

 

$

2,908

 

 

$

—

 

 

$

—

 

 

$

2,908

 

 

$

2,908

 

 

 

 

Fair Value Measurements as of

 

 

 

December 31, 2022 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Liability for embedded derivative

 

$

—

 

 

$

—

 

 

$

880

 

 

$

880

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

2,815

 

 

$

2,815

 

 

$

—

 

 

$

—

 

 

$

3,695

 

 

$

3,695

 

 
Schedule of Aggregate Fair Values of Company's Liabilities for which Fair Value is Determined by Level 3 Inputs

The following table provides a rollforward of the aggregate fair values of the Company’s liabilities for which fair value is determined by Level 3 inputs (in thousands):

 

 

 

Fair Value Measurements

 

Balance, December 31, 2022

 

$

3,695

 

Embedded derivative reclassified to equity

 

 

(880

)

Change in fair value – contingent consideration

 

 

93

 

Balance, June 30, 2023

 

$

2,908

 
v3.23.2
Leases (Tables)
 6 Months Ended
Jun. 30, 2023
Leases [Abstract]  
Components of Lease Expense

Components of lease expense were as follows:

 

 

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

Lease Cost

 

Classification

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Operating lease cost

 

Operating expenses

 

$

465

 

 

$

437

 

 

 

930

 

 

$

851

 

Operating lease cost

 

Cost of goods sold

 

 

98

 

 

 

107

 

 

 

195

 

 

 

221

 

Sublease income

 

Operating expenses

 

 

(85

)

 

 

(306

)

 

 

(365

)

 

 

(538

)

Total operating lease cost

 

 

 

$

478

 

 

$

238

 

 

$

760

 

 

$

534

 

Finance lease cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

Operating expenses

 

$

(6

)

 

$

—

 

 

$

4

 

 

$

3

 

Amortization of right-of-use assets

 

Cost of goods sold

 

 

6

 

 

 

12

 

 

 

14

 

 

 

23

 

Interest on lease liabilities

 

Other income (expense), net

 

 

—

 

 

 

1

 

 

 

—

 

 

 

2

 

Total finance lease cost

 

 

 

$

—

 

 

$

13

 

 

$

18

 

 

$

28

 

Variable lease cost

 

Cost of goods sold

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total lease cost

 

 

 

$

478

 

 

$

251

 

 

$

778

 

 

$

562

 
Supplemental Cash Flow Information Related to Operating and Finance Leases

Supplemental cash flow information related to operating and finance leases for the six months ended June 30, 2023 was as follows (in thousands):

 

 

 

Six Months Ended June 30,

 

 

 

2023

 

 

2022

 

Cash paid for amounts included in the measurement of lease liabilities:

 

 

 

 

 

 

Operating cash outflows from operating leases

 

$

642

 

 

$

892

 

Operating cash outflows from finance leases

 

$

10

 

 

$

27

 
Supplemental Balance Sheet Information Related to Operating and Finance Leases

Supplemental balance sheet information related to operating and finance leases was as follows (in thousands, except lease term and discount rate):

 

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Reported as:

 

 

 

 

 

 

Right-of-use assets, net

 

 

 

 

 

 

Operating lease right-of-use assets

 

$

5,899

 

 

$

6,710

 

Finance lease right-of-use assets

 

$

276

 

 

 

294

 

Total right-of-use assets

 

 

6,175

 

 

 

7,004

 

Accrued and other current liabilities

 

 

 

 

 

 

Operating lease liabilities

 

$

2,052

 

 

$

1,796

 

Finance lease liabilities

 

 

1

 

 

 

27

 

Lease liabilities

 

 

 

 

 

 

Operating lease liabilities

 

 

4,437

 

 

 

5,517

 

Finance lease liabilities

 

 

—

 

 

 

1

 

Total lease liabilities

 

$

6,490

 

 

$

7,341

 

Weighted average remaining lease term (years)

 

 

 

 

 

 

Operating leases

 

 

4.34

 

 

 

5.00

 

Finance leases

 

 

0.67

 

 

 

1.00

 

Weighted average discount rate

 

 

 

 

 

 

Operating leases

 

 

9.30

%

 

 

9.11

%

Finance leases

 

 

6.90

%

 

 

6.90

%

 
Maturities of Operating and Finance Lease Liabilities

As of June 30, 2023, maturities of the Company’s operating and finance lease liabilities and sublease income are as follows (in thousands):

 

Period

 

Operating leases

 

 

Finance leases

 

 

Total

 

 

Sublease income

 

2023

 

$

1,326

 

 

$

1

 

 

$

1,327

 

 

$

(113

)

2024

 

 

2,153

 

 

 

—

 

 

 

2,153

 

 

 

(231

)

2025

 

 

1,244

 

 

 

—

 

 

 

1,244

 

 

 

(39

)

2026

 

 

1,209

 

 

 

—

 

 

 

1,209

 

 

 

—

 

2027

 

 

1,061

 

 

 

—

 

 

 

1,061

 

 

 

—

 

2028 and thereafter

 

 

1,055

 

 

 

—

 

 

 

1,055

 

 

 

—

 

Total lease payments (receipts)

 

$

8,048

 

 

$

1

 

 

$

8,049

 

 

$

(383

)

Less imputed interest

 

 

1,559

 

 

 

—

 

 

 

1,559

 

 

 

 

Total lease liabilities

 

$

6,489

 

 

$

1

 

 

$

6,490

 

 

 

 
v3.23.2
Debt (Tables)
 6 Months Ended
Jun. 30, 2023
Debt Disclosure [Abstract]  
Schedule of Carrying Value of our Long-Term Debt

 

 

June 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

Convertible Note

 

$

50,000

 

 

$

50,000

 

2022 Note *

 

 

23,449

 

 

 

23,449

 

Total carrying amount

 

 

73,449

 

 

 

73,449

 

Unamortized debt discount and issuance costs

 

 

(15,653

)

 

 

(18,043

)

Total - carrying amount, net

 

$

57,796

 

 

$

55,406

 

 

*2022 Note includes exit fees of $0.45 million – included in principal and unamortized debt discount and issuance costs
Schedule of Future Principal Payments for Outstanding Debt

The future schedule of principal payments for all outstanding debt as of June 30, 2023 was as follows (in thousands):

 

Fiscal Year

 

 

 

2023

 

 

—

 

2024

 

 

—

 

2025

 

 

—

 

2026

 

 

50,000

 

2027 and thereafter

 

 

23,449

 

Total

 

$

73,449

 
v3.23.2
Stockholders' Equity (Tables)
 6 Months Ended
Jun. 30, 2023
Share-Based Payment Arrangement [Abstract]  
Summary of option activity

The following summarizes all option activity under the 2007 Plan, 2014 Plan and Inducement Plan:

 

 

 

 

 

Weighted

 

 

Weighted
average

 

 

 

 

 

 

average

 

 

remaining

 

 

 

Option

 

 

exercise

 

 

contractual

 

 

 

Shares

 

 

price

 

 

term (year)

 

Balance at December 31, 2022

 

 

89,678

 

 

$

42.78

 

 

 

7.11

 

Forfeited

 

 

(2,619

)

 

 

139.79

 

 

 

 

Balance at June 30, 2023

 

 

87,059

 

 

$

39.86

 

 

 

6.78

 
Summary of RSUs activity

Activity related to RSUs is set forth below:

 

 

 

 

 

 

Weighted
average

 

 

 

Number

 

 

grant date

 

 

 

of shares

 

 

fair value

 

Balance at December 31, 2022

 

 

708,806

 

 

$

43.86

 

Granted

 

 

574,200

 

 

 

1.71

 

Vested

 

 

(147,924

)

 

 

24.91

 

Forfeited

 

 

(61,626

)

 

 

12.05

 

Balance at June 30, 2023

 

 

1,073,456

 

 

$

25.75

 
v3.23.2
Net Loss Per Share (Tables)
 6 Months Ended
Jun. 30, 2023
Earnings Per Share [Abstract]  
Schedule of net loss per share, basic and diluted

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Loss from continuing operations

 

$

(9,477

)

 

 

$

(18,246

)

 

$

(22,369

)

 

$

(36,231

)

Loss from discontinued operations, net of income taxes

 

 

-

 

 

 

(58

)

 

 

-

 

 

(114

)

Net loss

 

$

(9,477

)

 

$

(18,304

)

 

$

(22,369

)

$

(36,345

)

Weighted average common shares outstanding, basic and diluted

 

 

11,205,000

 

 

 

 

6,264,954

 

 

 

11,589,311

 

 

 

6,249,356

 

Basic and diluted net loss per share

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.85

)

 

 

$

(2.91

)

 

$

(1.93

)

 

$

(5.80

)

Discontinued operations

 

 

-

 

 

 

 

(0.01

)

 

 

-

 

 

 

(0.02

)

Basic and diluted net loss per share

 

$

(0.85

)

 

 

$

(2.92

)

 

$

(1.93

)

 

$

(5.82

)
Schedule of weighted average potentially dilutive securities excluded from the computation of diluted net loss per share attributable to common stockholders

The Company excluded the following weighted average potentially dilutive securities, outstanding for the three and six months ended June 30, 2023 and 2022, from the computation of diluted net loss per share attributable to common stockholders for the three and six months ended June 30, 2023 and 2022 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

Stock issuable upon exercise of warrants

 

 

3,999,999

 

 

 

—

 

 

 

3,999,999

 

 

 

—

 

Stock issuable upon conversion of convertible note

 

 

4,118,181

 

 

 

1,463,415

 

 

 

4,118,181

 

 

 

1,463,415

 

 

Stock options to purchase common stock

 

 

475

 

 

 

—

 

 

 

1,216

 

 

 

250

 

 

Unvested RSUs

 

 

537,713

 

 

 

397,927

 

 

 

334,255

 

 

 

319,920

 

 

 

 

8,656,368

 

 

 

1,861,342

 

 

 

8,453,651

 

 

 

1,783,585

 

 
v3.23.2
Summary of Significant Accounting Policies (Details)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jan. 19, 2023
$ / shares
Jun. 30, 2023
USD ($)
$ / shares
Mar. 31, 2023
USD ($)
Jun. 30, 2022
USD ($)
Mar. 31, 2022
USD ($)
Jun. 30, 2023
USD ($)
$ / shares
Jun. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
$ / shares
Summary Of Significant Accounting Policies [Line Items]                
Reverse Stock Split 1-for-10              
Common stock, par value (in dollars per share) | $ / shares $ 0.01 $ 0.01       $ 0.01   $ 0.01
Reverse stock split ratio 10              
Cash and cash equivalents   $ 18,637   $ 24,990   $ 18,637 $ 24,990 $ 26,071
Incurred net losses   (9,477) $ (12,892) $ (18,304) $ (18,041) (22,369) (36,345)  
Cash used in operation           (6,793) $ (30,959)  
Term loan pursuant to the credit agreement   73,449       73,449   $ 73,449
Going Concern                
Summary Of Significant Accounting Policies [Line Items]                
Cash and cash equivalents   $ 18,600       18,600    
Incurred net losses           (22,400)    
Cash used in operation           $ 7,400    
v3.23.2
Discontinued Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]        
Receivable $ 31,819 $ 31,819   $ 36,892
Accounts payable 4,795 $ 4,795   $ 6,818
Transition Services Agreement        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]        
Post-closing services period   6 months    
TSA fees and cost reimbursements in operating expenses from continuing operations     $ 100  
Payments relating to the TSA services   $ 300    
Receivable relating to TSA services   2,300    
Remittance relating to TSA services   2,300    
Accounts payable 0 $ 0    
Sublease Agreement        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]        
Sublease term initial period   6 months    
Additional sublease term   6 months    
First option period   24 months    
Subsequent option period   24 months    
General and Administrative Expenses | Sublease Agreement        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]        
Sublease Income 100 $ 400    
Other Current Assets | Transition Services Agreement        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]        
Receivable $ 100 100    
miraDry        
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]        
Proceeds from sale of assets   10,000    
Net upfront cash proceeds   11,300    
Loss on sale of businesses   (2,500)    
Payment for post close changes in net asset value   $ 3,200    
v3.23.2
Discontinued Operations - Summary of Aggregate Carrying Amounts of Major Classes of Assets and Liabilities of Discontinued Operations (Details)
$ in Thousands
Jun. 30, 2023
USD ($)
Assets of discontinued operations:  
Prepaid expenses and other current assets $ 4
Total assets of discontinued operations 4
Liabilities of discontinued operations:  
Accounts payable 6
Accrued and other current liabilities 209
Total liabilities of discontinued operations $ 215
v3.23.2
Discontinued Operations - Summary of Information Regarding the Results of Discontinued Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2022
Jun. 30, 2022
Discontinued Operation, Income (Loss) from Discontinued Operation Disclosures [Abstract]    
Net sales $ 0 $ 0
Cost of goods sold 0 0
Gross profit 0 0
Operating expenses 58 114
Loss from operations of discontinued operations (58) (114)
Other income (expense), net 0 0
Loss from discontinued operations before income taxes (58) (114)
Loss on sale of discontinued operations before income taxes 0 0
Total loss from discontinued operations before income taxes (58) (114)
Income tax expense (benefit) 0 0
Loss from discontinued operations, net of income taxes $ (58) $ (114)
v3.23.2
Revenue (Details 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Jun. 30, 2023
Product Replacement  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 20 years
Breast Products and Consumable miraDry products  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 30 days
Maximum | Financial Assistance  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 24 months
Minimum | Financial Assistance  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 3 months
v3.23.2
Revenue (Details)
 6 Months Ended
Jun. 30, 2023
Change in Contract with Customer, Liability [Abstract]  
Period for sales return 6 months
v3.23.2
Revenue - Schedule of Liability for Unsatisfied Performance Obligations Under Service Warranty and Deliverables Under Certain Marketing Programs (Details)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
USD ($)
Change in Contract with Customer, Liability [Abstract]  
Balance as of December 31, 2022 $ 3,508
Additions and adjustments, net 274
Revenue recognized (1,352)
Balance as of June 30, 2023 2,430
Less short-term portion (415)
Long-term portion $ 2,015
v3.23.2
Revenue - Schedule of Rollforward of Sales Return Liability (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Revenue Recognition [Abstract]    
Beginning balance $ 15,773 $ 13,399
Addition to reserve for sales activity 98,719 86,279
Actual returns (101,736) (87,184)
Ending balance $ 12,756 $ 12,494
v3.23.2
Fair Value of Financial Instruments - Schedule of Carrying Value and Fair Value of Convertible Note (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Convertible Note    
Debt Instrument [Line Items]    
Carrying Value $ 41,635 $ 40,423
Fair Value 35,574 33,794
2022 Note    
Debt Instrument [Line Items]    
Carrying Value 16,162 15,396
Fair Value $ 18,250 $ 16,495
v3.23.2
Balance Sheet Components (Inventories) (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Balance Sheet Related Disclosures [Abstract]    
Raw materials $ 3,268 $ 2,765
Work in progress 2,947 4,245
Finished goods 30,192 31,438
Finished goods - right of return 3,001 4,244
Inventories $ 39,408 $ 42,692
v3.23.2
Balance Sheet Components (PPE) (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Property Plant And Equipment [Line Items]          
Property and equipment, gross $ 27,714,000   $ 27,714,000   $ 26,811,000
Less accumulated depreciation (13,730,000)   (13,730,000)   (11,870,000)
Property and equipment, net 13,984,000   13,984,000   14,941,000
Depreciation expense 900,000 $ 700,000 1,900,000 $ 1,500,000  
Impairments     0 $ 0  
Leasehold improvements          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 6,361,000   6,361,000   6,264,000
Manufacturing equipment and tooling          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 11,714,000   11,714,000   11,259,000
Computer equipment          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 1,771,000   1,771,000   1,690,000
Software          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 6,668,000   6,668,000   6,393,000
Furniture and fixtures          
Property Plant And Equipment [Line Items]          
Property and equipment, gross $ 1,200,000   $ 1,200,000   $ 1,205,000
v3.23.2
Balance Sheet Components - Goodwill and Other Intangible Assets, net (Details)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
USD ($)
Jun. 30, 2022
USD ($)
Jun. 30, 2023
USD ($)
ReportingUnit
Jun. 30, 2022
USD ($)
Dec. 31, 2022
USD ($)
Finite-Lived Intangible Assets [Line Items]          
Number of reporting units | ReportingUnit     1    
Goodwill $ 9,202   $ 9,202   $ 9,202
Other intangible assets          
Amortization expense 900 $ 900 1,800 $ 1,900  
Plastic Surgery          
Finite-Lived Intangible Assets [Line Items]          
Goodwill $ 9,200   $ 9,200   $ 9,200
v3.23.2
Balance Sheet Components - Components of Other Intangible Assets (Details) - USD ($)
$ in Thousands
 6 Months Ended 12 Months Ended
Jun. 30, 2023
Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 35,146 $ 35,143
Accumulated Amortization (11,715) (9,917)
Intangible Assets, net 23,431 25,226
Total definite and indefinite-lived intangibles 35,596 35,593
Indefinite-lived intangible assets, Gross 23,881 25,676
Indefinite-lived intangible assets, Net 23,881 25,676
Trade name    
Finite-Lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets, Gross 450 450
Indefinite-lived intangible assets, Net $ 450 $ 450
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Average Amortization Period 10 years 10 years
Gross Carrying Amount $ 4,940 $ 4,940
Accumulated Amortization (4,592) (4,493)
Intangible Assets, net $ 348 $ 447
Trade names - finite life    
Finite-Lived Intangible Assets [Line Items]    
Average Amortization Period 12 years 12 years
Gross Carrying Amount $ 800 $ 800
Accumulated Amortization (489) (456)
Intangible Assets, net $ 311 $ 344
Manufacturing know-how    
Finite-Lived Intangible Assets [Line Items]    
Average Amortization Period 19 years 19 years
Gross Carrying Amount $ 8,240 $ 8,240
Accumulated Amortization (2,893) (2,479)
Intangible Assets, net $ 5,347 $ 5,761
Developed technology    
Finite-Lived Intangible Assets [Line Items]    
Average Amortization Period 8 years 8 years
Gross Carrying Amount $ 21,166 $ 21,163
Accumulated Amortization (3,741) (2,489)
Intangible Assets, net $ 17,425 $ 18,674
v3.23.2
Balance Sheet Components - Schedule of Future Estimated Amortization Expense (Details)
$ in Thousands
Jun. 30, 2023
USD ($)
Estimated amortization expense  
2023 $ 1,886
2024 3,628
2025 3,485
2026 3,312
2027 3,230
Thereafter 7,890
Total amortization $ 23,431
v3.23.2
Balance Sheet Components (Accrued liabilities) (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Accrued and other current liabilities    
Accrued payroll and bonuses $ 4,731 $ 4,962
Accrued severance 589 1,232
Accrued commissions 1,405 3,017
Deferred and contingent consideration, current portion 3,031 3,030
Lease liabilities 2,053 1,823
Other 5,400 8,535
Total $ 17,209 $ 22,599
v3.23.2
Balance Sheet Components - Schedule of rollforward of the accrued assurance-type warranties (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Balance as of January 1 $ 8,828 $ 2,505
Warranty costs incurred during the period (404) (266)
Changes in accrual related to warranties issued during the period 902 513
Changes in accrual related to warranties issued during prior periods (9) 12
Balance as of March 31 9,317 2,764
Less short-term portion (539) 0
Long-term portion $ 8,778 $ 2,764
v3.23.2
Balance Sheet Components (Liabilities measured at fair value) (Details)
 6 Months Ended
Jun. 30, 2023
Measurement Input, Discount Rate | BIOCORNEUM | Future Royalty Payments  
Fair Value Measurements  
Fair value measurement discount rate 24.00%
Monte-Carlo Simulation Model | Measurement Input, Volatility Rate  
Fair Value Measurements  
Fair value measurement, volatility rate 125.00%
v3.23.2
Balance Sheet Components - Schedule of Company's Liabilities that are Measured at Fair Value on a Recurring Basis (Details) - Recurring - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Fair Value Measurements    
Fair value liability $ 2,908 $ 3,695
Contingent Consideration Liability    
Fair Value Measurements    
Fair value liability 2,908 2,815
Embedded Derivative Liability    
Fair Value Measurements    
Fair value liability   880
Level 3    
Fair Value Measurements    
Fair value liability 2,908 3,695
Level 3 | Contingent Consideration Liability    
Fair Value Measurements    
Fair value liability $ 2,908 2,815
Level 3 | Embedded Derivative Liability    
Fair Value Measurements    
Fair value liability   $ 880
v3.23.2
Balance Sheet Components - Schedule of Aggregate Fair Values of Company's Liabilities for which Fair Value is Determined by Level 3 Inputs (Details) - Level 3 - Fair Value, Recurring
$ in Thousands
 6 Months Ended
Jun. 30, 2023
USD ($)
Fair Value Measurements  
Balance at beginning of the period $ 3,695
Balance at the end of the period 2,908
Embedded Derivative Liability  
Fair Value Measurements  
Reclassification to equity 880
Contingent Consideration Liability  
Fair Value Measurements  
Change in fair value $ (93)
v3.23.2
Leases - Components of Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Lessee Lease Description [Line Items]        
Total operating lease cost $ 478 $ 238 $ 760 $ 534
Finance lease cost        
Total finance lease cost 0 13 18 28
Total lease cost 478 251 778 562
Operating Expenses        
Lessee Lease Description [Line Items]        
Total operating lease cost 465 437 930 851
Sublease income (85) (306) (365) (538)
Finance lease cost        
Amortization of right-of-use assets (6) 0 4 3
Other Income (Expense), Net        
Finance lease cost        
Interest on lease liabilities 0 1 0 2
Cost of goods sold        
Lessee Lease Description [Line Items]        
Total operating lease cost 98 107 195 221
Finance lease cost        
Amortization of right-of-use assets 6 12 14 23
Variable lease cost $ 0 $ 0 $ 0 $ 0
v3.23.2
Leases - Supplemental Cash Flow Information Related to Operating and Finance Leases (Details) - USD ($)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash outflows from operating leases $ 642 $ 892
Operating cash outflows from finance leases $ 10 $ 27
v3.23.2
Leases - Supplemental Balance Sheet Information Related to Operating and Finance Leases (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Assets and Liabilities, Lessee [Abstract]    
Operating lease right-of-use assets $ 5,899 $ 6,710
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Total right-of use assets Total right-of use assets
Right of use assets, net $ 276 $ 294
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Total right-of use assets Total right-of use assets
Total right-of use assets $ 6,175 $ 7,004
Operating lease liabilities $ 2,052 $ 1,796
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and other current liabilities Accrued and other current liabilities
Finance lease liabilities $ 1 $ 27
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and other current liabilities Accrued and other current liabilities
Operating lease liabilities $ 4,437 $ 5,517
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Lease liabilities Lease liabilities
Lease liabilities $ 0 $ 1
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] Lease liabilities Lease liabilities
Total lease liabilities $ 6,490 $ 7,341
Weighted average remaining lease term (years)    
Operating leases 4 years 4 months 2 days 5 years
Finance leases 8 months 1 day 1 year
Weighted average discount rate    
Operating leases 9.30% 9.11%
Finance leases 6.90% 6.90%
v3.23.2
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Operating Lease Liabilities, Payments Due [Abstract]    
Operating leases, 2023 $ 1,326  
Operating leases, 2024 2,153  
Operating leases, 2025 1,244  
Operating leases, 2026 1,209  
Operating leases, 2027 1,061  
Operating leases, 2028 and thereafter 1,055  
Total operating lease payments 8,048  
Less imputed interest, Operating leases 1,559  
Total operating lease liabilities 6,489  
Finance Lease Liabilities, Payments, Due [Abstract]    
Finance leases, 2023 1  
Total finance lease payments 1  
Total finance lease liabilities 1  
Lessee Lease Liability Payments Due [Abstract]    
2023 1,327  
2024 2,153  
2025 1,244  
2026 1,209  
2027 1,061  
2028 and thereafter 1,055  
Total lease payments 8,049  
Less imputed interest 1,559  
Total lease liabilities 6,490 $ 7,341
Sublease Income Payments Due [Abstract]    
Subincome lease, 2023 (113)  
Subincome lease, 2024 (231)  
Subincome lease, 2025 (39)  
Total sublease income payments (receipts) $ (383)  
v3.23.2
Debt (Details) - USD ($)
 3 Months Ended 6 Months Ended
Oct. 12, 2022
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Oct. 30, 2022
Line Of Credit Facility [Line Items]          
Amortization of debt issuance costs and discounts     $ 2,506,000 $ 1,927,000  
Debt Instrument principal amount         $ 10,000,000.0
Term Loan and Revolving Loan          
Line Of Credit Facility [Line Items]          
Loan amount outstanding     0    
Unamortized debt issuance costs     0    
Amortization of debt issuance costs   $ 100,000   300,000  
Deerfield Facility Agreement | Convertible Note          
Line Of Credit Facility [Line Items]          
Loan amount outstanding     73,500,000    
Term loan credit and security agreement entered date Oct. 12, 2022        
Unamortized debt discount and issuance costs     $ 15,700,000    
Debt instrument interest rate     12.00%    
Amortization of debt issuance costs and discounts     $ 2,400,000 $ 1,600,000  
Debt instrument, call feature     Deerfield has the option to demand repayment of all outstanding principal, and any unpaid interest accrued thereon and any other amounts payable under the Restated Agreement (including the Exit Fee (in the case of the 2022 Note) and any make whole amounts), in connection with a Major Transaction (as defined in the Convertible Notes), which shall include, among others, any acquisition or other change of control of the Company; the sale or transfer of assets of the Company equal to more than 50% of the Enterprise Value (as defined in the Convertible Notes) of the Company; a liquidation, bankruptcy or other dissolution of the Company; or if at any time shares of the Company’s common stock are not listed on an Eligible Market (as defined in the Convertible Notes). The Convertible Notes are subject to specified events of default, the occurrence of which would entitle Deerfield to immediately demand repayment of all outstanding principal and accrued interest on the Convertible Note. Such events of default include, among others, failure to make any payment under the Convertible Note when due, failure to observe or perform any covenant under the Restated Agreement or the other transaction documents related thereto (subject to a standard cure period), the failure of the Company to be able to pay debts as they come due, the commencement of bankruptcy or insolvency proceedings against the Company, a material judgment levied against the Company and a material default by the Company under the Convertible Note.    
Percentage of transfer of assets 50.00%        
Amended and Restated Facility Agreement          
Line Of Credit Facility [Line Items]          
Debt Instrument principal amount $ 23,000,000.0        
Exit fee percentage to aggregate amount of all term loans funded 1.95%        
Debt conversion, threshold percentage 130.00%        
Amended and Restated Facility Agreement | Convertible Note          
Line Of Credit Facility [Line Items]          
Principal debt amount exchanged $ 10,000,000.0        
Debt Instrument principal amount $ 50,000,000.0        
v3.23.2
Debt - Schedule of Carrying Value of our Long-Term Debt (Details) - USD ($)
$ in Thousands
Jun. 30, 2023
Dec. 31, 2022
Line of Credit Facility [Line Items]    
Convertible Note $ 50,000 $ 50,000
2022 Note [1] 23,449 23,449
Total carrying amount 73,449 73,449
Unamortized debt discount and issuance costs (15,653) (18,043)
Total - carrying amount, net $ 57,796 $ 55,406
[1]

*2022 Note includes exit fees of $0.45 million – included in principal and unamortized debt discount and issuance costs
v3.23.2
Debt - Schedule of Carrying Value of our Long-Term Debt (Parenthetical) (Details)
$ in Thousands
 6 Months Ended
Jun. 30, 2023
USD ($)
Debt Disclosure [Abstract]  
Long Term Debt Exit Fees $ 450
v3.23.2
Debt - Schedule of Future Principal and Exit Fee Payments of Outstanding Debt (Details)
$ in Thousands
Jun. 30, 2023
USD ($)
Debt Disclosure [Abstract]  
2023 $ 0
2024 0
2025 0
2026 50,000
2027 and thereafter 23,449
Total $ 73,449
v3.23.2
Stockholders' Equity (Details) - $ / shares
 1 Months Ended
Oct. 31, 2022
Jun. 30, 2023
Jan. 19, 2023
Dec. 31, 2022
Stock other disclosures        
Common and preferred stock, shares authorized   210,000,000   210,000,000
Common stock, shares authorized   200,000,000   200,000,000
Common stock, par value (in dollars per share)   $ 0.01 $ 0.01 $ 0.01
Preferred stock, shares authorized   10,000,000   10,000,000
Preferred stock, par value (in dollars per share)   $ 0.01   $ 0.01
Preferred stock, shares issued   0   0
Preferred stock, shares outstanding   0   0
2022 Follow-on Public Offering | Common stock        
Stock other disclosures        
Stock issued during period, shares 1,778,500      
2022 Follow-on Public Offering | Stock issuable upon exercise of warrants        
Stock other disclosures        
Stock issued during period, shares 3,999,999      
2022 Follow-on Public Offering | Pre-funded Warrant        
Stock other disclosures        
Stock issued during period, shares 2,221,499      
v3.23.2
Stockholders' Equity (Warrants) (Details) - USD ($)
$ / shares in Units, $ in Millions
 1 Months Ended
Oct. 31, 2022
Jun. 30, 2023
Dec. 31, 2022
Oct. 30, 2022
Common Stock Warrants        
Warrants outstanding   0 303,804  
Debt Instrument principal amount       $ 10.0
Deerfield Facility Agreement        
Common Stock Warrants        
Warrant exercise, threshold percentage       4.985%
Deerfield Exchange Agreement        
Common Stock Warrants        
Exercise price (in dollars per share)       $ 0.001
Debt Instrument principal amount       $ 50.0
Debt conversion, shares Issued 296,774      
Debt conversion, warrants issued 1,054,395      
2022 Follow-on Public Offering        
Common Stock Warrants        
Proceeds from the issuance of common stock, net of underwriting discounts, commissions and offering expenses $ 14.1      
Warrants outstanding   4,657,799 4,657,799  
2022 Follow-on Public Offering | Stock issuable upon exercise of warrants        
Common Stock Warrants        
Exercise price (in dollars per share)       $ 3.80
2022 Follow-on Public Offering | Pre-funded Warrant        
Common Stock Warrants        
Exercise price (in dollars per share)       $ 3.70
v3.23.2
Stockholders' Equity (Options) (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 6 Months Ended 12 Months Ended
Jun. 22, 2023
Apr. 17, 2023
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Dec. 31, 2022
Nov. 03, 2014
Apr. 30, 2007
Stock options                  
Number of options                  
Balance at the beginning of period (in shares)         89,678        
Options forfeited (in shares)         (2,619)        
Balance at the end of the period (in shares)     87,059   87,059   89,678    
Weighted average exercise price                  
Balance at the beginning of period (in dollars per share)         $ 42.78        
Forfeited         139.79        
Balance at the end of period (in dollars per share)     $ 39.86   $ 39.86   $ 42.78    
Additional information                  
Weighted average remaining contractual term         6 years 9 months 10 days   7 years 1 month 9 days    
Stock-based compensation expense     $ 0.2 $ 0.2 $ 0.3 $ 0.3      
2014 Plan                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Number of shares available for future grants     314,016   314,016        
Additional shares of common stock issued   107,024              
Common stock reserved for issuance (in shares)               102,750  
Number of shares available for future grants     (314,016)   (314,016)        
2014 Plan | Stock options                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Additional shares of common stock issued   428,098              
2007 Plan                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Common stock reserved for issuance (in shares)                 169,045
Inducement Plan                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Number of shares available for future grants     303,496   303,496        
Number of shares awarded         528,221        
Grant period of stock awards         10 years        
Vesting period         1 year        
Number of shares available for future grants     (303,496)   (303,496)        
Inducement Plan | On the first anniversary                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Vesting percentage         25.00%        
Inducement Plan | Minimum                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant         100.00%        
Inducement Plan | Minimum | Individual options                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Vesting percentage         25.00%        
2007 Plan and 2014 Plan | Stock options                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Grant period of stock awards         10 years        
2007 Plan and 2014 Plan | Stock options | Minimum                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant         100.00%        
Percentage of voting power owned by shareholder     10.00%   10.00%        
2007 Plan and 2014 Plan | Stock options | Maximum                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant         110.00%        
2016 Plan | Stock options                  
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]                  
Additional shares of common stock issued 511,128                
v3.23.2
Stockholders' Equity (Restricted Stock) (Details) - Restricted stock units - 2014 Plan - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Stockholders' Equity, other disclosures        
Requisite service period, annually     3 years  
Stock-based compensation expense $ 1.1 $ 1.8 $ 2.5 $ 3.7
Unrecognized compensation costs (in dollars) $ 5.7   $ 5.7  
Weighted average period over which unrecognized compensation costs are expected to be recognized     1 year 5 months 26 days  
Number of shares        
Balance at beginning of the period     708,806  
Granted     574,200  
Vested     (147,924)  
Forfeited     (61,626)  
Balance at end of the period 1,073,456   1,073,456  
Weighted average grant date fair value        
Balance at beginning of the period     $ 43.86  
Granted     1.71  
Vested     24.91  
Forfeited     12.05  
Balance at end of the period $ 25.75   $ 25.75  
v3.23.2
Stockholders' Equity (Stock Purchase) (Details) - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 6 Months Ended
Apr. 17, 2023
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Oct. 31, 2014
2014 Employee Stock Purchase Plan            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Purchase period of offering       6 months    
Rate of purchase price of stock on fair value (as a percent)       85.00%    
Purchases under the award       144,447    
Weighted Average purchase price   $ 1.75   $ 1.75    
Number of shares available for future grants   115,837   115,837    
Stock-based compensation expense   $ 0.1 $ 0.2 $ 0.3 $ 0.3  
2014 Employee Stock Purchase Plan | Maximum            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Discount rate on the value of shares through payroll deductions (as a percent)       15.00%    
Expiration period of each offering       27 months    
Number of shares reserved for future issuance           255,500
2014 Plan            
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]            
Additional shares of common stock issued 107,024          
Number of shares available for future grants   314,016   314,016    
v3.23.2
Net Loss Per Share - Schedule of Net Loss Per Share, Basic and Diluted (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Mar. 31, 2023
Jun. 30, 2022
Mar. 31, 2022
Jun. 30, 2023
Jun. 30, 2022
Earnings Per Share [Abstract]            
Loss from continuing operations $ (9,477)   $ (18,246)   $ (22,369) $ (36,231)
Loss from discontinued operations, net of income taxes 0   (58)   0 (114)
Net loss $ (9,477) $ (12,892) $ (18,304) $ (18,041) $ (22,369) $ (36,345)
Weighted Average Number of Shares Outstanding, Basic 11,205,000   6,264,954   11,589,311 6,249,356
Weighted Average Number of Shares Outstanding, Diluted 11,205,000   6,264,954   11,589,311 6,249,356
Continuing operations, Basic $ (0.85)   $ (2.91)   $ (1.93) $ (5.80)
Continuing operations, Diluted (0.85)   (2.91)   (1.93) (5.80)
Discontinued operations, Basic 0   (0.01)   0 (0.02)
Discontinued operations, Diluted 0   (0.01)   0 (0.02)
Basic net loss income per share (0.85)   (2.92)   (1.93) (5.82)
Diluted net loss income per share $ (0.85)   $ (2.92)   $ (1.93) $ (5.82)
v3.23.2
Net Loss Per Share - Schedule of Weighted Average Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Potentially dilutive securities        
Potentially dilutive securities 8,656,368 1,861,342 8,453,651 1,783,585
Stock issuable upon exercise of warrants        
Potentially dilutive securities        
Potentially dilutive securities 3,999,999 0 3,999,999 0
Stock issuable upon conversion of convertible note        
Potentially dilutive securities        
Potentially dilutive securities 4,118,181 1,463,415 4,118,181 1,463,415
Stock options to purchase common stock        
Potentially dilutive securities        
Potentially dilutive securities 475 0 1,216 250
Unvested RSUs        
Potentially dilutive securities        
Potentially dilutive securities 537,713 397,927 334,255 319,920
v3.23.2
Income Taxes (Details) - USD ($)
 3 Months Ended 6 Months Ended
Jun. 30, 2023
Jun. 30, 2022
Jun. 30, 2023
Jun. 30, 2022
Income Tax Disclosure [Abstract]        
Tax expense $ 0 $ 0 $ 0 $ 0