Document and Entity Information - USD ($) $ in Thousands	12 Months Ended
Document and Entity Information - USD ($) $ in Thousands	Dec. 31, 2019	Mar. 04, 2020	Jun. 30, 2019
Cover [Abstract]
Entity Registrant Name	Sientra, Inc.
Entity Central Index Key	0001551693
Document Type	10-K
Document Period End Date	Dec. 31, 2019
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Shell Company	false
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Public Float			$ 278,429,000
Entity Common Stock, Shares Outstanding		49,985,057
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	FY
Trading Symbol	SIEN
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NASDAQ
Entity File Number	001-36709
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5551000
Entity Address, Address Line One	420 South Fairview Avenue
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Santa Barbara
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	93117
City Area Code	805
Local Phone Number	562-3500
Document Annual Report	true
Document Transition Report	false
Documents Incorporated by Reference	Portions of the registrant’s definitive Proxy Statement relating to its 2020 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated. Such Proxy Statement will be filed with the U.S. Securities and Exchange Commission within 120 days after the end of the fiscal year to which this report relates.

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Current assets:
Cash and cash equivalents	$ 87,608	$ 86,899
Accounts receivable, net of allowances of $3,835 and $2,428 at December 31, 2019 and December 31, 2018, respectively	27,548	22,527
Inventories, net	39,612	24,085
Prepaid expenses and other current assets	2,489	2,612
Total current assets	157,257	136,123
Property and equipment, net	12,314	2,536
Goodwill	9,202	12,507
Other intangible assets, net	17,390	16,495
Other assets	8,241	698
Total assets	204,404	168,359
Current liabilities:
Current portion of long-term debt	6,508	6,866
Accounts payable	9,352	13,184
Accrued and other current liabilities	32,551	27,697
Legal settlement payable		410
Customer deposits	13,943	9,936
Sales return liability	8,116	6,048
Total current liabilities	70,470	64,141
Long-term debt	38,248	27,883
Deferred and contingent consideration	5,177	6,481
Warranty reserve and other long-term liabilities	8,627	2,976
Total liabilities	122,522	101,481
Commitments and contingencies (Note 13)
Stockholders’ equity:
Preferred stock, $0.01 par value – Authorized 10,000,000 shares; none issued or outstanding
Common stock, $0.01 par value — Authorized 200,000,000 shares; issued 49,612,907 and 28,701,494 and outstanding 49,540,180 and 28,628,767 shares at December 31, 2019 and December 31, 2018, respectively	495	286
Additional paid-in capital	550,562	428,949
Treasury stock, at cost (72,727 shares at December 31, 2019 and December 31, 2018)	(260)	(260)
Accumulated deficit	(468,915)	(362,097)
Total stockholders’ equity	81,882	66,878
Total liabilities and stockholders’ equity	$ 204,404	$ 168,359

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2019	Dec. 31, 2018
Statement Of Financial Position [Abstract]
Accounts receivable, allowances (in dollars)	$ 3,835	$ 2,428
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	49,612,907	28,701,494
Common stock, shares outstanding	49,540,180	28,628,767
Treasury stock, shares	72,727	72,727

Consolidated Statements of Operations - USD ($)	12 Months Ended
Consolidated Statements of Operations - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Income Statement [Abstract]
Net sales	$ 83,699,000	$ 68,126,000	$ 36,542,000
Cost of goods sold	33,012,000	26,822,000	14,171,000
Gross profit	50,687,000	41,304,000	22,371,000
Operating expenses:
Sales and marketing	80,189,000	67,715,000	33,911,000
Research and development	13,537,000	10,945,000	9,813,000
General and administrative	46,771,000	42,418,000	31,537,000
Restructuring	1,083,000
Legal settlement			10,000,000
Goodwill and other intangible impairment	12,674,000
Total operating expenses	154,254,000	121,078,000	85,261,000
Loss from operations	(103,567,000)	(79,774,000)	(62,890,000)
Other income (expense), net:
Interest income	1,406,000	532,000	172,000
Interest expense	(4,568,000)	(3,428,000)	(1,232,000)
Other income (expense), net	(55,000)	39,000	(95,000)
Total other income (expense), net	(3,217,000)	(2,857,000)	(1,155,000)
Loss before income taxes	(106,784,000)	(82,631,000)	(64,045,000)
Income tax (benefit) expense	34,000	(4,000)	(17,000)
Net loss	$ (106,818,000)	$ (82,627,000)	$ (64,028,000)
Basic and diluted net loss per share attributable to common stockholders	$ (2.63)	$ (3.25)	$ (3.34)
Weighted average outstanding common shares used for net loss per share attributable to common stockholders:
Basic and diluted	40,654,272	25,402,241	19,159,057

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common stock	Treasury stock	Additional paid-in capital	Accumulated deficit
Balance, beginning of year at Dec. 31, 2016	$ 83,617	$ 186	$ (260)	$ 299,133	$ (215,442)
Balance, beginning of year (in shares) at Dec. 31, 2016		18,671,409	72,727
Employee stock-based compensation expense	6,766			6,766
Stock option exercises	1,346	$ 5		1,341
Stock option exercises (in shares)		480,236
Employee stock purchase program (ESPP)	647	$ 1		646
Employee stock purchase program (ESPP) (in shares)		108,081
Vested restricted stock		$ 3		(3)
Vested restricted stock (in shares)		293,910
Shares withheld for tax obligations on vested RSUs	(725)	$ (1)		(724)
Shares withheld for tax obligations on vested RSUs, shares		(78,934)
Net loss	(64,028)				(64,028)
Balance, end of year at Dec. 31, 2017	27,623	$ 194	$ (260)	307,159	(279,470)
Balance, end of year (in shares) at Dec. 31, 2017		19,474,702	72,727
Proceeds from follow-on offering, net of costs	107,551	$ 85		107,466
Proceeds from follow-on offering, net of costs (in shares)		8,518,519
Employee stock-based compensation expense	13,824			13,824
Stock option exercises	1,149	$ 1		1,148
Stock option exercises (in shares)		147,463
Employee stock purchase program (ESPP)	993	$ 2		991
Employee stock purchase program (ESPP) (in shares)		145,616
Vested restricted stock		$ 5		(5)
Vested restricted stock (in shares)		523,257
Shares withheld for tax obligations on vested RSUs	(1,635)	$ (1)		(1,634)
Shares withheld for tax obligations on vested RSUs, shares		(108,063)
Net loss	(82,627)				(82,627)
Balance, end of year at Dec. 31, 2018	66,878	$ 286	$ (260)	428,949	(362,097)
Balance, end of year (in shares) at Dec. 31, 2018		28,701,494	72,727
Proceeds from follow-on offering, net of costs	107,734	$ 200		107,534
Proceeds from follow-on offering, net of costs (in shares)		20,000,000
Employee stock-based compensation expense	12,655			12,655
Stock option exercises	125			125
Stock option exercises (in shares)		51,451
Employee stock purchase program (ESPP)	1,216	$ 1		1,215
Employee stock purchase program (ESPP) (in shares)		175,624
Vested restricted stock		$ 10		(10)
Vested restricted stock (in shares)		944,467
Shares withheld for tax obligations on vested RSUs	(3,064)	$ (2)		(3,062)
Shares withheld for tax obligations on vested RSUs, shares		(260,129)
Equity contingent consideration	3,156			3,156
Net loss	(106,818)				(106,818)
Balance, end of year at Dec. 31, 2019	$ 81,882	$ 495	$ (260)	$ 550,562	$ (468,915)
Balance, end of year (in shares) at Dec. 31, 2019		49,612,907	72,727

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
Consolidated Statements of Cash Flows - USD ($)	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2017
Cash flows from operating activities:
Net loss	$ (106,818,000)	$ (82,627,000)	$ (64,028,000)
Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill impairment	7,629,000	0	0
Intangible asset impairment	5,045,000	0	0
Depreciation and amortization	3,524,000	3,321,000	3,034,000
Provision for doubtful accounts	2,298,000	2,043,000	493,000
Provision for warranties	929,000	325,000	294,000
Provision for inventory	2,626,000	955,000	3,125,000
Change in fair value of warrants	(75,000)	(81,000)	95,000
Change in fair value of deferred consideration	100,000	24,000	(110,000)
Change in fair value of contingent consideration	1,044,000	2,528,000	1,135,000
Change in deferred revenue	1,124,000	627,000
Non-cash portion of debt extinguishment loss	53,000		17,000
Amortization of debt discount and issuance costs	359,000	174,000	140,000
Stock-based compensation expense	12,478,000	13,824,000	6,766,000
Loss on disposal of property and equipment	119,000	74,000	25,000
Deferred income taxes	18,000	(8,000)	(21,000)
Payments of contingent consideration liability in excess of acquisition-date fair value	(1,968,000)	(320,000)
Changes in assets and liabilities, net of effect from acquisitions:
Accounts receivable	(7,320,000)	(14,094,000)	(1,890,000)
Inventories	(10,921,000)	(4,144,000)	1,526,000
Prepaid expenses, other current assets and other assets	(8,513,000)	(1,302,000)	713,000
Insurance recovery receivable		39,000	9,336,000
Accounts payable	(2,225,000)	8,502,000	1,290,000
Accrued and other liabilities	7,795,000	7,885,000	3,218,000
Legal settlement payable	(410,000)	(590,000)	(9,900,000)
Customer deposits	4,008,000	4,513,000	(1,136,000)
Sales return liability	2,068,000	2,142,000
Net cash used in operating activities	(87,033,000)	(56,190,000)	(45,878,000)
Cash flows from investing activities:
Purchase of property and equipment	(4,071,000)	(855,000)	(1,864,000)
Business acquisitions, net of cash and restricted cash acquired	(17,943,000)		(18,150,000)
Net cash used in investing activities	(22,014,000)	(855,000)	(20,014,000)
Cash flows from financing activities:
Net proceeds from issuance of common stock	107,734,000	107,551,000
Proceeds from exercise of stock options	125,000	1,149,000	1,346,000
Proceeds from issuance of common stock under ESPP	1,216,000	993,000	647,000
Tax payments related to shares withheld for vested restricted stock units (RSUs)	(3,064,000)	(1,635,000)	(725,000)
Gross borrowings under the Term Loan	5,000,000	10,000,000	25,000,000
Gross borrowings under the Revolving Loan	22,296,000	12,109,000	5,000,000
Repayment of the Revolving Loan	(15,788,000)	(12,109,000)	(5,000,000)
Payments of contingent consideration up to acquisition-date fair value	(5,766,000)	(680,000)
Deferred financing costs	(1,997,000)	(22,000)	(657,000)
Net cash provided by financing activities	109,756,000	117,356,000	25,611,000
Net increase in cash, cash equivalents and restricted cash	709,000	60,311,000	(40,281,000)
Cash, cash equivalents and restricted cash at:
Beginning of period	87,242,000	26,931,000	67,212,000
End of period	87,951,000	87,242,000	26,931,000
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets
Cash and cash equivalents	87,608,000	86,899,000	26,588,000
Restricted cash included in other assets	$ 343,000	$ 343,000	$ 343,000
Restricted Cash Noncurrent Asset Statement Of Financial Position Extensible List	us-gaap:OtherNoncurrentAssetsMember	us-gaap:OtherNoncurrentAssetsMember	us-gaap:OtherNoncurrentAssetsMember
End of period	$ 87,951,000	$ 87,242,000	$ 26,931,000
Supplemental disclosure of cash flow information:
Interest paid	4,089,000	3,120,000	870,000
Supplemental disclosure of non-cash investing and financing activities:
Property and equipment in accounts payable and accrued liabilities	745,000	679,000	1,088,000
Acquisition of business, deferred and contingent consideration obligations at fair value	$ 9,063,000		10,912,000
Non-cash deferred consideration settlement		1,000,000
Non-cash settlement of assets held for sale in accounts payable		$ 2,674,000
Forgiveness of SVB Loan commitment fee			750,000
Deferred financing costs in accrued liabilities			$ 6,000

Formation and Business of the Company

12 Months Ended

Dec. 31, 2019

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Formation and Business of the Company

(1) Formation and Business of the Company

(a)

Formation

Sientra, Inc. (“Sientra”, the “Company,” “we,” “our” or “us”), was incorporated in the State of Delaware on August 29, 2003 under the name Juliet Medical, Inc. and subsequently changed its name to Sientra, Inc. in April 2007. The Company acquired substantially all the assets of Silimed, Inc. on April 4, 2007. The purpose of the acquisition was to acquire the rights to the silicone breast implant clinical trials, related product specifications and pre-market approval, or PMA, assets. Following this acquisition, the Company focused on completing the clinical trials to gain FDA approval to offer its silicone gel breast implants in the United States.

In March 2012, the Company announced it had received approval from the FDA for its portfolio of silicone gel breast implants, and in the second quarter of 2012 the Company began commercialization efforts to sell its products in the United States. The Company, based in Santa Barbara, California, is a medical aesthetics company that focuses on serving board-certified plastic surgeons and offers a portfolio of silicone shaped and round breast implants, scar management, tissue expanders, and body contouring products.

In November 2014, the Company completed an initial public offering, or IPO, and its common stock is listed on the Nasdaq Stock Exchange under the symbol “SIEN.”

(b)	Acquisition of miraDry

On June 11, 2017, Sientra entered into an Agreement and Plan of Merger, or the Merger Agreement, with miraDry (formerly Miramar Labs), pursuant to which Sientra commenced a tender offer to purchase all of the outstanding shares of miraDry’s common stock for (i) $0.3149 per share, plus (ii) the contractual right to receive one or more contingent payments upon the achievement of certain future sales milestones. The total merger consideration was $18.7 million in upfront cash and the contractual rights represent potential contingent payments of up to $14 million. The transaction, which closed on July 25, 2017, added the miraDry System to Sientra’s aesthetics portfolio.

(c)	Acquisition of certain assets from Vesta Intermediate Funding, Inc.

On November 7, 2019, the Company entered into an Asset Purchase Agreement, or the Purchase Agreement, with Vesta Intermediate Funding, Inc., or Vesta, pursuant to which the Company purchased certain assets and obtained a non-exclusive, royalty-free, perpetual, irrevocable, assignable, sublicensable, and worldwide license to certain intellectual property owned by Vesta, or the Vesta Acquisition. The total consideration was $ 19.1 million in cash, $3.2 million and $3.0 million in cash payable on November 7, 2021 and November 7, 2023, respectively, and two contingent share issuances of up to 303,721 shares each, of the Company’s common stock upon the achievement of certain price targets. The transaction, which closed on November 7, 2019, will allow the Company to achieve a greater degree of vertical integration, obtaining direct control of breast implant manufacturing and product development activities and generating production-related cost synergies.

(d)	Regulatory Review of Vesta Manufacturing

Prior to its acquisition, the Company engaged Vesta for the manufacture and supply of the Company’s breast implants. On March 14, 2017, the Company announced it had submitted a site-change pre-market approval, or PMA, supplement to the FDA for the manufacture of the Company’s PMA-approved breast implants at the Vesta manufacturing facility. On January 30, 2018, the Company announced the FDA has granted approval of the site-change supplement for Vesta to manufacture its silicone gel breast implants. In support of the move to the Vesta manufacturing facility, the Company also implemented new manufacturing process improvements which, in consultation with the FDA, required three (3) additional PMA submissions. In addition to approving the manufacturing site-change PMA supplement, the FDA approved the Company’s three (3) process enhancement submissions on January 10, 2018, January 19, 2018 and April 17, 2018.

(e)	Follow-on Offerings

On May 7, 2018, the Company completed an underwritten follow-on public offering of 7,407,408 shares of its common stock at $13.50 per share, as well as 1,111,111 additional shares of its common stock pursuant to the full exercise of the over-allotment option granted to the underwriters. Net proceeds to the Company were approximately $107.6 million after deducting underwriting discounts and commissions of $6.9 million and offering expenses of approximately $0.5 million.

On June 7, 2019, the Company completed an underwritten follow-on public offering of 17,391,305 shares of its common stock at $5.75 per share, as well as 2,608,695 additional shares of its common stock pursuant to the full exercise of the over-allotment option granted to the underwriters. Net proceeds to the Company were approximately $107.7 million after deducting underwriting discounts and commissions of $6.9 million and offering expenses of approximately $0.4 million.

(f)	Regulatory Inquiries Regarding Products Manufactured by Silimed

There have been regulatory inquiries related to medical devices manufactured by Silimed Indústria de Implantes Ltda. (formerly, Silimed-Silicone e Instrumental Medico-Cirugio e Hospitalar Ltda.), or Silimed, the Company’s former sole source contract manufacturer for its silicone gel breast implants. Following extensive independent, third-party testing and analyses of its devices manufactured by Silimed, which tests indicated no significant safety concerns with the use of Silimed’s products, the Company lifted the temporary hold on the sale of such devices. While the Company continues to sell its remaining inventory of devices manufactured by Silimed, its existing manufacturing contract with Silimed expired on its terms in April 2017 and the Company did not renew the contract.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

(2) Summary of Significant Accounting Policies

(a)	Basis of Presentation and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to significant judgment and use of estimates include the allowance for doubtful accounts, sales return liability, provision for warranties, valuation of inventories, recoverability of long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and finite lived intangible assets, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with stock-based compensation and other equity instruments.

(b)

Liquidity

Since the Company’s inception, it has incurred significant net operating losses and the Company anticipates that losses will continue in the near term. Although the Company expects its operating expenses will begin to decrease with the implementation of the organizational efficiency initiative, the Company will need to generate significant net sales to achieve profitability. To date, the Company has funded operations primarily with proceeds from the sales of preferred stock, borrowings under term loans, sales of products since 2012, and the proceeds from the sale of common stock in public offerings.

The accompanying consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. At December 31, 2019, the Company had cash and cash equivalents of $87.6 million. Since inception, the Company has incurred recurring losses from operations and cash outflows from operating activities. During the years ended December 31, 2019, 2018 and 2017 the Company incurred net losses of $106.8 million, $82.6 million and $64.0 million, respectively. The Company used $87.0 million of cash in operations for the year ended December 31, 2019, $56.2 million for the year ended December 31, 2018 and $45.9 million for the year ended December 31, 2017. At December 31, 2019 and 2018 the Company had an accumulated deficit of $468.9 million and $362.1 million, respectively. The continuation of the Company as a going concern is dependent upon many factors including liquidity and the ability to raise capital. The Company received FDA approval of their PMA supplement on April 17, 2018 and was then able to access a $10.0 million term loan pursuant to an amendment to the credit agreement with MidCap Financial Trust, or MidCap. In addition, in February 2018, the Company entered into an At-The-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated, or Stifel, as sales agent pursuant to which the Company may sell, from time to time, through Stifel, shares of its common stock having an aggregate gross offering price of up to $50.0 million. As of December 31, 2019, the Company had not sold any common stock pursuant to the sales agreement. Further, on May 7, 2018 and June 7, 2019, the Company completed public offerings of its common stock, raising approximately $107.6 million and $107.7 million, respectively, in net proceeds after deducting underwriting discounts and commissions and other offering expenses.

On March 11, 2020, the Company entered into a Facility Agreement (the “Deerfield Facility Agreement”) by and among the Company, as borrower, certain of the Company’s subsidiaries party thereto as guarantors (collectively with the Company, the “Loan Parties”) and Deerfield Partners, L.P. (“Deerfield”), as agent for itself and the lenders, providing for the sale by the Company to Deerfield of $60.0 million of principal amount of 4.0% unsecured and subordinated convertible notes (the “Convertible Note”) upon the terms and conditions set forth in the Deerfield Facility Agreement (the “Deerfield Financing”). Refer to Note 7 – Debt for further details.

(c)	Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist primarily of cash in checking accounts and interest-bearing money market accounts.

(d)	Concentration of Credit and Supplier Risks

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company’s cash and cash equivalents are deposited in demand accounts at financial institutions that management believes are creditworthy. The Company is exposed to credit risk in the event of default by these financial institutions for cash and cash equivalents in excess of amounts insured by the Federal Deposit Insurance Corporation, or FDIC. Management believes that the Company’s investments in cash and cash equivalents are financially sound and have minimal credit risk and the Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company relies on a limited number of third-party manufacturers for the manufacturing and supply of its products. This could result in the Company not being able to acquire the inventory needed to meet customer demand, which would result in possible loss of sales and affect operating results adversely.

(e)	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 common stock warrant liability, deferred and contingent consideration are discussed in Note 2(f) below. The fair value of the debt is based on the amount of future cash flows associated with the instrument discounted using the Company’s market rate. At December 31, 2019, the carrying value of the long-term debt was not materially different from the fair value.

(f)	Fair Value Measurements

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.

The Company’s common stock warrant liabilities are carried at fair value determined according to the fair value hierarchy described above. The Company has utilized an option pricing valuation model to determine the fair value of its outstanding common stock warrant liabilities. The inputs to the model include fair value of the common stock related to the warrant, exercise price of the warrant, expected term, expected volatility, risk-free interest rate and dividend yield. The warrants are valued using the fair value of common stock as of the measurement date. The Company estimates its expected stock volatility based on company-specific historical and implied volatility information of its stock. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company has estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends. As several significant inputs are not observable, the overall fair value measurement of the warrants is classified as Level 3.

The Company assessed the fair value of the contingent consideration for future royalty payments related to the acquisition of BIOCORNEUM and the contingent consideration for the future milestone payments related to the acquisition of miraDry using a Monte-Carlo simulation model. Significant assumptions used in the measurement include future net sales for a defined term and the risk-adjusted discount rate associated with the business. As the inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3.

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2019 and 2018 and indicate the level of the fair value hierarchy utilized to determine such fair value (in thousands):

	Fair Value Measurements as of
	December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Liability for common stock warrants	$	—		—		38		38
Liability for contingent consideration		—		—		6,891		6,891
	$	—		—		6,929		6,929

	Fair Value Measurements as of
	December 31, 2018 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Liability for common stock warrants	$	—		—		113		113
Liability for contingent consideration		—		—		13,847		13,847
	$	—		—		13,960		13,960

The liability for common stock warrants and the current portion of contingent consideration is included in “accrued and other current liabilities” and the long-term liabilities for the contingent consideration are included in “deferred and contingent consideration” in the consolidated balance sheet. The following table provides a rollforward of the aggregate fair values of the Company’s common stock warrants and contingent consideration for which fair value is determined by Level 3 inputs (in thousands):

Warrant Liability
Balance, December 31, 2018	$	113
Change in fair value of warrant liability		(75	)
Balance, December 31, 2019	$	38
Contingent Consideration Liability
Balance, December 31, 2018	$	13,847
Settlements of contingent consideration		(8,000	)
Change in fair value of contingent consideration		1,044
Balance, December 31, 2019	$	6,891

The Company recognizes changes in the fair value of the warrants in “other income (expense), net” in the consolidated statement of operations and changes in contingent consideration are recognized in “general and administrative” expense in the consolidated statement of operations.

(g)	Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful life of the asset, generally three to fifteen years. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Upon retirement or sale of an asset, the cost and related accumulated depreciation or amortization are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred.

(h)	Goodwill and Other Intangible Assets

Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Goodwill is not amortized, but instead is subject to impairment tests on at least an annual basis and whenever circumstances suggest that goodwill may be impaired. After the acquisition of miraDry, management began evaluating the Company as two reporting units, Breast Products and miraDry. The Company’s annual test for impairment is performed as of October 1 of each fiscal year. The Company makes a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount from the qualitative assessment, the Company performs a quantitative analysis to compare the fair value of the reporting unit to its carrying amount. The Company recognizes impairment charges for the amount by which the carrying amount exceeds the reporting unit’s fair value.

The Company’s fair value analysis of goodwill utilizes the income approach and market approach, which requires the use of estimates about a reporting unit’s future revenues and free cash flows, market multiples, enterprise value, control risk premiums, discount rates, terminal value and enterprise value to determine the estimated fair value. The Company’s future revenues and free cash flow assumptions are determined based upon actual results giving effect to management’s expected changes in operating results in future years. The market multiples, enterprise value, control risk premiums, discount rates and terminal value are based upon market participant assumptions using a defined peer group. Changes in these assumptions can materially affect these estimates. Thus, to the extent the market changes, discount rates increase significantly or the Company does not meet its projected performance, the Company could recognize impairments, and such impairments could be material.

In the second quarter of 2019, the Company noted a decline in actual and forecasted earnings for the miraDry reporting unit in comparison to forecasted earnings determined in prior periods. Based on this evaluation, the Company determined that the carrying value of the miraDry reporting unit more likely than not exceeded its estimated fair value. As a result, the Company performed a quantitative analysis to compare the fair value of the reporting unit to its carrying amount.

After performing the impairment test as of June 30, 2019 the Company determined that the carrying value of its miraDry reporting unit exceeded its estimated fair value using the income approach, as described above, by an amount that indicated a full impairment of the carrying value of goodwill. Consequently, the Company recorded a non-cash goodwill impairment charge of $7.6 million during the second quarter ended June 30, 2019, which is reflected in the accompanying consolidated statement of operations for the year ended December 31, 2019.

For the Breast Products reporting unit, the Company performed a qualitative analysis on the annual impairment testing date of October 1, 2019 and determined the fair value of the reporting unit was more likely than not greater than its carrying value. For the years ended December 31, 2018 and 2017 the Company did not record any goodwill impairment charges.

Further, the Company acquired goodwill through the Vesta acquisition in the fourth quarter of 2019. The Company determined that an impairment analysis would not be necessary as they were assessed and recorded at fair value during the quarter ended December 31, 2019, and thus the goodwill carrying value approximates the fair value as of December 31, 2019. Refer to Note 4(a) for further details.

The Company tests indefinite-lived intangible assets for impairment on at least an annual basis and whenever circumstances suggest the assets may be impaired. The Company’s annual test for impairment is performed as of October 1 of each fiscal year. If indicators of impairment are present, the Company evaluates the carrying value of the intangible assets in relation to estimates of future undiscounted cash flows. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the difference. The Company also evaluates the remaining useful life of an indefinite-lived intangible asset to determine whether events and circumstances continue to support an indefinite useful life. For the years ended December 31, 2019, 2018, and 2017, the Company did not record any indefinite-lived intangible assets impairment charges.

Judgments about the recoverability of purchased finite‑lived intangible assets are made whenever events or changes in circumstance indicate that impairment may exist. Each fiscal year the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstance warrant a revision to the remaining periods of amortization. Recoverability of finite‑lived intangible assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. The intangible asset is amortized to the consolidated statement of operations based on estimated cash flows generated from the intangible over its estimated life.

In connection with the circumstances leading to the impairment of goodwill for the miraDry reporting unit, in the second quarter of 2019 the Company performed a test of recoverability of the intangible assets in the miraDry reporting unit by comparing the carrying amount of the asset group to the future undiscounted cash flows the assets are expected to generate. As the future undiscounted cash flows attributable to the asset group were less than the carrying value, the Company performed a quantitative analysis to compare the fair value of the intangible assets in the reporting unit to their carrying amount.

After performing the impairment test as of June 30, 2019, the Company determined that the carrying values of all of the intangible assets in the miraDry reporting unit exceeded their estimated fair values. Consequently, the Company recorded non-cash impairment charges of $0.4 million for customer relationships, $0.3 million for distributor relationships, $3.3 million for tradenames, and $1.0 million for developed technology within goodwill and other intangible impairment during the second quarter ended June 30, 2019, which is reflected in the accompanying consolidated statement of operations for the year ended December 31, 2019. For the years ended December 31, 2018 and 2017, the Company did not record any definite-lived intangible asset impairment charges.

(i)	Impairment of Long‑Lived Assets

The Company’s management routinely considers whether indicators of impairment of long‑lived assets are present. If such indicators are present, management determines whether the sum of the estimated undiscounted cash flows attributable to the assets in question is less than their carrying value. If less, the Company will recognize an impairment loss based on the excess of the carrying amount of the assets over their respective fair values. Fair value is determined by discounted future cash flows, appraisals or other methods. If the assets determined to be impaired are to be held and used, the Company will recognize an impairment charge to the extent the present value of anticipated net cash flows attributable to the asset are less than the asset’s carrying value. The fair value of the asset will then become the asset’s new carrying value. There have been no impairments of tangible long‑lived assets recorded during the years ended December 31, 2019, 2018 and 2017. The Company may record impairment losses in future periods if factors influencing its estimates change.

(j)	Business Combinations

Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date in the financial statements. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Liability-classified contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair values are recorded in earnings. Equity-classified contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and are not subsequently remeasured each reporting period unless the obligation becomes reclassified as a liability. The subsequent settlement of the obligation is accounted for within equity.

(k)	Segment Reporting

Reportable segments represent components for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, who has been identified as the Chief Operating Decision Maker, or CODM, as defined by authoritative guidance on segment reporting, in determining how to allocate resources and evaluate performance. The segments are determined based on several factors, including client base, homogeneity of products, technology, delivery channels and similar economic characteristics. Based on the financial information presented to and reviewed by the CODM, the Company has determined that it has two reportable segments: Breast Products and miraDry.

(l)	Revenue Recognition

The Company generates revenue primarily through the sale and delivery of promised goods or services to customers and recognizes revenue when control is transferred to customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for the goods or services. Performance obligations typically include the delivery of promised products, such as breast implants, tissue expanders, BIOCORNEUM, miraDry Systems and bioTips, along with service-type warranties and deliverables under certain marketing programs. Other deliverables are sometimes promised, but are ancillary and insignificant in the context of the contract as a whole. Sales prices are documented in the executed sales contract, purchase order or order acknowledgement prior to the transfer of control to the customer. Customers may enter into a separate extended service agreement to purchase an extended warranty for miraDry products from the Company whereby the payment is due at the inception of the agreement. Typical payment terms are 30 days for Breast Products and direct sales of consumable miraDry products, and tend to be longer for capital sales of miraDry Systems and sales to miraDry distributors, but do not extend beyond one year. 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. Revenue for extended service agreements and deliverables under marketing programs are recognized ratably over the term of the agreements.

For Breast Products, with the exception of the Company’s BIOCORNEUM scar management products, the Company allows for the return of products from customers within six months after the original sale, which is accounted for as variable consideration. Reserves are established for anticipated sales returns based on the expected amount calculated with historical experience, recent gross sales and any notification of pending returns. The estimated sales returns are recorded as a reduction of revenue and as a sales return liability in the same period revenue is recognized. Actual sales returns 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. The Company has established an allowance for sales returns of $8.1 million and $6.0 million as of December 31, 2019 and December 31, 2018, respectively, recorded as “sales return liability” on the consolidated balance sheets.

The following table provides a rollforward of the sales return liability (in thousands):

	Sales return liability
Balance as of December 31, 2018	$	6,048
Addition to reserve for sales activity		105,496
Actual returns		(104,148	)
Change in estimate of sales returns		720
Balance as of December 31, 2019	$	8,116

For Breast Products, a portion of the Company’s revenue is generated from the sale of consigned inventory of breast implants 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 implanted, not when the consigned products are delivered to the customer’s location.

For miraDry, in addition to domestic and international direct sales, the Company leverages a distributor network for selling the miraDry System internationally. The Company recognizes revenue when control of the goods or services is transferred to the distributors. Standard terms in both direct sales agreements (domestic and international), and international distributor agreements do not allow for trial periods, right of return, refunds, payment contingent on obtaining financing or other terms that could impact the customer’s payment obligation.

Arrangements with Multiple Performance Obligations

The Company has determined that the delivery of each unit of product in the Company’s revenue contracts with customers is a separate performance obligation. The Company’s revenue contracts may include multiple products or services, each of which is considered a separate performance obligation. For such arrangements, the Company allocates revenue to each performance obligation based on its relative standalone selling price. The Company generally determines standalone selling prices based on observable prices or using an expected cost plus margin approach when an observable price is not available. The Company invoices customers once products are shipped or delivered to customers depending on the negotiated shipping terms.

The Company introduced its Platinum20 Limited Warranty Program, or Platinum20, in May 2018 on all OPUS breast implants implanted in the United States or Puerto Rico on or after May 1, 2018. 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 (as discussed in Note 2(s)). The Company considers the service warranty component as an additional performance obligation and defers revenue at the time of sale based on the relative estimated selling price, by estimating a standalone selling price using the expected cost plus margin approach for the performance obligation. Inputs into the expected cost plus 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 December 31, 2019 and December 31, 2018 was $1.2 million and $0.4 million, respectively.

The short-term obligation related to the service warranty was $0.5 million and $0.2 million as of December 31, 2019 and December 31, 2018, respectively, and is included in “accrued and other current liabilities” on the consolidated balance sheet. The long-term obligation related to the service warranty was $0.7 million and $0.3 million as of December 31, 2019 and December 31, 2018, respectively, and is included in “warranty reserve and other long-term liabilities” on the consolidated balance sheet. The performance obligation is satisfied at the time that Platinum20 benefits are provided and are expected to be satisfied over the following 6 to 24 month period for financial assistance and 20 years for product replacement. Revenue recognized for the service warranty performance obligations for the year ended December 31, 2019 was $0.2 million. Revenue recognized for the service warranty performance obligations for the year ended December 31, 2018 was immaterial.

Practical Expedients and Policy Election

The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses.

The Company does not adjust accounts receivable for the effects of any significant financing components as customer payment terms are shorter than one year.

The Company has elected to account for shipping and handling activities performed after a customer obtains control of the products as activities to fulfill the promise to transfer the products to the customer. Shipping and handling activities are largely provided to customers free of charge for the Breast Products segment. The associated costs were $1.9 million, $1.3 million and $0.9 million for the years ended December 31, 2019, 2018, and 2017, respectively. These costs are viewed as part of the Company’s marketing programs and are recorded as a component of sales and marketing expense in the consolidated statement of operations as an accounting policy election. For the miraDry segment, shipping and handling charges are typically billed to customers and recorded as revenue. The shipping and handling costs incurred are recorded as a component of cost of goods sold in the consolidated statement of operations. The associated costs were $0.7 million, $0.4 million, and $35,000 for the years ended December 31, 2019, 2018, and 2017 from the acquisition date July 25, 2017, respectively.

(m)	Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability to collect from some of its customers. The allowances for doubtful accounts are based on the analysis of historical bad debts, customer credit‑worthiness, past transaction history with the customer, and current economic trends. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances may be required. The Company has established an allowance for doubtful accounts of $3.8 million and $2.4 million as of December 31, 2019 and 2018, respectively.

(n)	Inventories and Cost of Goods Sold

Inventories represent raw materials, work in process and finished goods that are recorded at the lower of cost or market on a first‑in, first‑out basis, or FIFO. The Company periodically assesses the recoverability of all inventories to determine whether adjustments for impairment or obsolescence are required. The Company evaluates the remaining shelf life and other general obsolescence and impairment criteria in assessing the recoverability of the Company’s inventory.

The Company recognizes the cost of inventory transferred to the customer in cost of goods sold when revenue is recognized.

At December 31, 2019 and 2018, approximately $2.7 million and $1.4 million, respectively, of the Company’s Breast Products segment inventory was held on consignment at doctors’ offices, clinics, and hospitals. The value and quantity at any one location is not significant.

(o)	Income Taxes

The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized.

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. However, the Company has deferred tax liabilities that cannot be considered sources of income to support the realization of the deferred tax assets, and has provided for tax expense (or benefit) and a corresponding deferred tax liability. Tax expense for the year ended December 31, 2019 was $34,000. Tax benefit for the years ended December 31, 2018 and 2017 was $4,000 and $17,000, respectively.

The Company accounts for uncertain tax position in accordance with Account Standards Codification, or ASC, 740‑10, Accounting for Uncertainty in Income Taxes. The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of tax benefit might change as new information becomes available.

(p)	Research and Development Expenditures

Research and development costs are charged to operating expenses as incurred. Research and development, or R&D, primarily consist of clinical expenses, regulatory expenses, product development, consulting services, outside research activities, quality control and other costs associated with the development of the Company’s products and compliance with Good Clinical Practices, or GCP, requirements. R&D expenses also include related personnel and consultant compensation and stock-based compensation expense.

(q)	Advertising

Expenses related to advertising are charged to sales and marketing expense as incurred. Advertising costs were $6.1 million, $1.3 million and $1.8 million for the years ended December 31, 2019, 2018 and 2017, respectively.

(r)	Stock‑Based Compensation

The Company applies the fair value provisions of ASC 718, Compensation — Stock Compensation, or ASC 718. ASC 718 requires the recognition of compensation expense, using a fair‑value based method, for costs related to all employee share‑based payments, including stock options, restricted stock units, and the employee stock purchase plan. In the absence of an observable market price for an award, ASC 718 requires companies to estimate the fair value of share‑based payment awards on the date of grant using an option‑pricing model. We estimate the fair value of our stock‑based awards to employees and directors using the Black‑Scholes option pricing model. The grant date fair value of a stock‑based award is recognized as an expense over the requisite service period of the award on a straight‑line basis. In addition, we use the Monte-Carlo simulation option-pricing model to determine the fair value of market-based awards. The Monte-Carlo simulation option-pricing model uses the same input assumptions as the Black-Scholes model; however, it also further incorporates into the fair-value determination the possibility that the market condition may not be satisfied. Compensation costs related to these awards are recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided.

The option-pricing models require the input of subjective assumptions, including the risk‑free interest rate, expected dividend yield, expected volatility and expected term, among other inputs. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock‑based compensation expense could be materially different in the future. These assumptions are estimated as follows:

•

Risk‑free interest rate—The risk‑free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group.

•

Dividend yield—The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company utilized an expected dividend yield of zero.

•

Expected volatility—In the prior years, the Company utilized median historic price volatilities and implied volatilities of comparable public companies due to a lack of significant trading history for the Company’s own common stock. In the current year, the Company estimated its expected stock volatility based on company-specific historical and implied volatility information of its stock as sufficient historical information has become available.

•

Expected term—The expected term represents the period that our stock‑based awards are expected to be outstanding.

The following table presents the weighted‑average assumptions used to estimate the fair value of options granted during the periods presented:

	Year Ended December 31,
Stock Options	2019	2018	2017
Expected term (in years)	—	—	4.47		to	6.07
Expected volatility	—	—	45	%	to	56	%
Risk-free interest rate	—	—	1.24	%	to	2.45	%
Dividend yield	—	—	—

The following table presents the weighted-average assumptions used to estimate the fair value of the stock purchase rights granted under the employee stock purchase plan:

	Year Ended December 31,
ESPP	2019							2018							2017
Expected term (in years)		0.50		to		2.00			0.50		to		2.00			0.50		to		2.10
Expected volatility	69		%	to	77		%	36		%	to	42		%	46		%	to	55		%
Risk-free interest rate	1.87		%	to	2.06		%	1.27		%	to		3.03	%	0.08		%	to		1.30	%
Dividend yield	—							—							—

(s)	Product Warranties

The Company offers a product replacement and limited warranty program for the Company’s silicone gel breast implants, and a product warranty for the Company’s miraDry Systems and consumable bioTips. For silicone gel breast implant surgeries occurring prior to May 1, 2018, the Company provides lifetime replacement implants and up to $3,600 in financial assistance for revision surgeries, for covered rupture events that occur within ten years of the surgery date. The Company introduced its Platinum20 Limited Warranty Program in May 2018, covering OPUS silicone gel breast implants implanted in the United States or Puerto Rico on or after May 1, 2018. The Company considers the program to have an assurance warranty component and a service warranty component. The service warranty component is discussed in Note 2(l) above. The assurance component is related to the lifetime no-charge contralateral replacement implants and up to $5,000 in financial assistance for revision surgeries, for covered rupture events that occur within twenty years of the surgery date. Under the miraDry warranty, the Company provides a standard product warranty for the miraDry System and bioTips, which the Company considers an assurance-type warranty.

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

	Year Ended December 31,
	2019			2018
Balance as of January 1	$	1,395		$	1,642
Warranty costs incurred during the period		(762	)		(572	)
Changes in accrual related to warranties issued during the period		1,138			891
Changes in accrual related to pre-existing warranties		(209	)		(566	)
Balance as of December 31	$	1,562		$	1,395

(t)	Net Loss Per Share

	December 31,
	2019			2018			2017
Net loss (in thousands)	$	(106,818	)	$	(82,627	)	$	(64,028	)
Weighted average common shares outstanding, basic and diluted		40,654,272			25,402,241			19,159,057
Net loss per share attributable to common stockholders	$	(2.63	)	$	(3.25	)	$	(3.34	)

The Company excluded the following potentially dilutive securities, outstanding as of December 31, 2019, 2018 and 2017 from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2019, 2018 and 2017 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.

	December 31,
	2019		2018		2017
Stock options to purchase common stock		417,109		1,625,778		1,867,627
Warrants for the purchase of common stock		47,710		47,710		47,710
		464,819		1,673,488		1,915,337

(u)	Recent Accounting Pronouncements

Recently Adopted Accounting Standards

In February 2016, the FASB issued Accounting Standards Update, or ASU, 2016-02, Leases (Topic 842). This ASU requires a company to recognize lease assets and liabilities arising from operating leases in the statement of financial position. This ASU does not significantly change the previous lease guidance for how a lessee should recognize the recognition, measurement, and presentation of expenses and cash flows arising from a lease. Additionally, the criteria for classifying a finance lease versus an operating lease are substantially the same as the previous guidance. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption was permitted. In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842) Targeted Improvements, amending certain aspects of the new leasing standard. The amendment allowed an additional optional transition method whereby an entity records a cumulative effect adjustment to opening retained earnings in the year of adoption without restating prior periods. The Company adopted Topic 842 on January 1, 2019 electing the package of practical expedients permitted under the transition guidance, which allowed the Company to carry forward the historical lease classification, the assessment on whether a contract is or contains a lease, and the initial direct costs for any leases that exist prior to adoption of the new standard. The Company has not restated prior periods under the optional transition method. The adoption of ASU 2016-02 on January 1, 2019 resulted in the recognition of right-of-use assets of approximately $22.7 million, lease liabilities of approximately $22.9 million and no cumulative-effect adjustment on retained earnings on its consolidated balance sheets. Refer to Note 6 - Leases for further details.

In February 2018, the FASB issued ASU 2018-02, Income Taxes (Topic 740), which allows for an entity to elect to reclassify the income tax effects on items within accumulated other comprehensive income resulting from U.S. Tax Cuts and Jobs Act to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted, including interim periods within those years. The Company adopted ASC 2018-02 and elected to not reclassify the income tax effects under ASU 2018-02, as it did not have a material impact on the consolidated financial statements.

Recently Issued Accounting Standards

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. The amendment modifies, removes, and adds certain disclosure requirements on fair value measurements. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. The amendments on changes in unrealized gains and losses, the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively for only the most recent interim or annual period presented in the initial fiscal year of adoption. All other amendments should be applied retrospectively to all periods presented upon their effective date. Early adoption is permitted. The Company is currently evaluating the impact that adoption of the standard will have on the consolidated financial statements.

In August 2018, the FASB issued ASU 2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) - Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The accounting for the service element of a hosting arrangement that is a service contract is not affected by the amendment. The ASU is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2019. Early adoption is permitted. The Company is currently evaluating the impact that adoption of the standard will have on the consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendment removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation, and calculating income taxes in interim periods. The amendment also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the impact that adoption of the standard will have on the consolidated financial statements.

(v)	Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

Restructuring

12 Months Ended

Dec. 31, 2019

Restructuring And Related Activities [Abstract]

Restructuring

(3) Restructuring

On November 6, 2019, the Board of Directors of the Company approved an organizational efficiency initiative, or the Plan, designed to reduce spending and simplify operations. Under the Plan, the Company will implement numerous initiatives to reduce spending, including closing the Santa Clara offices of miraDry, Inc., outsourcing miraDry product assembly to a third party, and consolidating a number of business support services via a shared services organization at the Company’s Santa Barbara headquarters.

Under the Plan, the Company intends to reduce its workforce by terminating approximately 70 employees over a 10-month period. As a result, the Company expects to incur total charges of approximately $4.1 million in connection with one-time employee termination costs, retention costs and other benefits. In addition, the Company expects to incur estimated charges of approximately $1.3 million related to contract termination costs, outsourcing miraDry product assembly, duplicate operating costs, and other associated costs. In total, the Plan is estimated to cost approximately $5.4 million over 10 months, excluding non-cash charges, with related cash payments expected to be substantially paid out with cash on hand by the end of the third quarter of 2020.

The following table details the amount of the liabilities related to the Plan included in "Accrued and other current liabilities" in the consolidated balance sheet as of December 31, 2019 (amounts in thousands):

	Severance costs			Other associated costs
Balance at December 31, 2018	$	-		$	-
Costs charged to expense		957			126
Costs paid or otherwise settled		(63	)		(126	)
Balance at December 31, 2019	$	894		$	—

During 2019, the Company recorded $1.1 million of severance and other associated costs related to the Plan. The following table details the charges by reportable segment, recorded in "Restructuring" under operating expenses in the consolidated statements of operations for the year ended December 31, 2019 by segment (amounts in thousands):

	Year Ended
	December 31, 2019
Breast Products	$	499
miraDry		584
Total	$	1,083

It is anticipated that the Company will additionally incur approximately $4.1 million of total restructuring costs during 2020, of which $1.1 million would be attributable to the Breast Products segment and $3.0 million would be attributable to the miraDry segment. As the development of the Plan is completed, the Company will update its estimated costs by reportable segment as needed.

Acquisitions

12 Months Ended

Dec. 31, 2019

Business Combinations [Abstract]

Acquisitions

(4) Acquisitions

(a)

Acquisition of certain assets from Vesta Intermediate Funding, Inc.

On November 7, 2019, the Company entered into an Asset Purchase Agreement with Vesta Intermediate Funding, Inc., pursuant to which the Company purchased certain assets and obtained a non-exclusive, royalty-free, perpetual, irrevocable, assignable, sublicensable, and worldwide license to certain intellectual property owned by Vesta. In consideration of the acquisition, the Company paid $14.0 million in cash on the closing date and $5.1 million for additional inventory. The Company will pay an additional $3.2 million and $3.0 million in cash on November 7, 2021 and November 7, 2023, respectively. In addition, in the event the closing price of the Company’s common stock equals or exceeds a certain agreed upon price target, or the First Milestone Price Target, on any date through November 7, 2023, the Company will issue Vesta 303,721 shares of common stock within five business days of such date and in the event the closing price of the Company’s common stock equals or exceeds a second agreed upon price target, or the Second Milestone Price Target, on any date through November 7, 2023, the Company will issue Vesta 303,721 shares of common stock within five business days of such date. The Company will use its commercially reasonable efforts to file and maintain a resale registration statement registering the resale of the milestone shares. The transaction, which closed on November 7, 2019, or the Acquisition Date, will allow the Company to achieve a greater degree of vertical integration, obtaining direct control of breast implant manufacturing and product development activities and generating production-related cost synergies.

The acquired set of activities, which includes all the inputs, processes, and outputs related to the manufacturing of the Company’s gel breast implants, was determined to meet the definition of a business as outlined in ASC 805. In connection with the acquisition, the Company recorded $2.6 million of professional fees for the year ended December 31, 2019, which are included in general and administrative expense. The aggregate preliminary acquisition date fair value of the consideration transferred was approximately $27.0 million, consisting of the following (in thousands):

	Fair Value
Cash consideration at Acquisition Date	$	14,000
Deferred consideration		4,737
Equity contingent consideration		3,156
Purchase price for additional inventory purchase		5,113
Total purchase consideration	$	27,006

The Company funded the cash consideration amount with cash on hand. The deferred consideration represents the fair value of the additional cash to be paid on the second and fourth anniversaries following the closing date. The equity contingent consideration represents Vesta’s contractual right to receive potential future consideration in the form of shares of Sientra common stock upon achievement of certain price milestones of the Company’s common stock (the First and Second Milestone Price Targets). The fair value of the equity contingent consideration at the acquisition date was determined using a Monte-Carlo simulation model. The inputs include the Company’s closing stock price as of the valuation date, Company-specific historical equity volatility, and the risk-free rate. Equity contingent consideration was determined to be equity classified and is therefore not subsequently remeasured each reporting period unless the obligation becomes reclassified as a liability, and subsequent settlement of the obligation will be accounted for within equity. The additional inventory purchase represents cash paid for inventory and ordering supplies needed to support the acquired manufacturing process, at cost in accordance with the Transition Services Agreement. As of December 31, 2019, $3.9 million of the additional inventory purchase was funded with cash on hand, and the remaining $1.2 million is included in “Accrued and other current liabilities” on the consolidated balance sheet.

In accordance with ASC 805, the Company has recorded the acquired assets (including identifiable intangible assets) and liabilities assumed at their respective fair value. The preliminary allocation of the total purchase price is as follows (in thousands):

	November 7,
	2019
Inventories	$	7,138
Property and equipment		7,304
Goodwill		4,324
Intangible assets		8,240
Net assets acquired	$	27,006

Goodwill was allocated to the Breast Products reportable segment. The goodwill recognized is attributable primarily to the assembled workforce and additional market opportunities and is deductible for tax purposes.

The intangible assets consist of intellectual property related to manufacturing know-how. The intellectual property has an estimated useful life of 19 years and is amortized using an accelerated method of 95% of the benefit realized.

The Company retained an independent third-party appraiser to assist management in its valuation; however, the purchase price allocation has not been finalized. The fair values of assets acquired may change over the measurement period as additional information is received. The primary areas that are subject to change include the fair value of property and equipment and inventories. The measurement period will end no later than one year from the acquisition date.

In connection with the acquisition, the Company entered into a Termination and Release Agreement with Vesta, effectively terminating the existing manufacturing agreement between the Company and Vesta. The Company evaluated the settlement of the pre-exiting relationship under the provisions of ASC 805 and recognized no gain or loss as a result of the termination.

The results of the acquired business have been included in the consolidated financial statements from November 7, 2019 through December 31, 2019 and have been included in the Breast Products segment. Disclosure of pro forma combined revenue have not been presented because the effect of the acquisition had no impact on the Company’s revenue. Disclosure of pro forma combined earnings have not been presented because it is impracticable to do so due to a variety of limitations, including a lack of readily available historical GAAP financial statements.

(b)

Acquisition of miraDry

On June 11, 2017, Sientra entered into the Merger Agreement with miraDry, pursuant to which Sientra commenced a tender offer to purchase all of the outstanding shares of miraDry’s common stock for (i) $0.3149 per share, plus (ii) the contractual right to receive one or more contingent payments upon the achievement of certain future sales milestones. The total merger consideration was $18.7 million in upfront cash and the contractual rights represented potential contingent payments of up to $14 million. The transaction, which closed on July 25, 2017, or the Acquisition Date, added the miraDry System, the only FDA cleared device to reduce underarm sweat, odor and permanently reduce hair of all colors, to Sientra’s aesthetics portfolio. In connection with the acquisition, the Company recorded $3.1 million of professional fees for the year ended December 31, 2017, which are included in general and administrative expense. The aggregate acquisition date fair value of the consideration transferred was approximately $29.6 million, consisting of the following (in thousands):

	Fair Value
Cash consideration at Acquisition Date (other than debt payoff)	$	6,193
Cash consideration at Acquisition Date (debt payoff)		12,467
Deferred consideration		966
Contingent consideration		9,946
Total purchase consideration	$	29,572

The Company funded the cash consideration, including the debt payoff amount with cash on hand. The cash consideration included the payoff of miraDry’s existing term loan, or the Note Purchase Agreement dated January 27, 2017 and bridge loan, or the January 2017 Bridge Loan, including interest. The deferred consideration relates to cash held back to be used for either potential litigation-related expenses or for payments to certain former investors of miraDry, as defined in the Note Purchase Agreement dated January 27, 2017, one year following the Acquisition Date. Upon reaching one year, the deferred consideration was classified as $0.4 million of legal settlement payable in the consolidated balance sheet and $0.6 million had offset legal fees paid that the Company had previously included in “prepaid expenses and other current assets” on the consolidated balance sheet. Contingent consideration of future cash payments of a maximum of $14.0 million in two milestones represents the contractual right of certain former miraDry shareholders to receive one or more contingent payments upon achievement of certain future sales milestones and includes certain amounts due to investors related to the remaining balances on the January 2017 Bridge Note and accrued royalty obligations, with certain amounts held back for potential litigation-related expenses. The fair value of the contingent consideration at the acquisition date was determined using a Monte-Carlo simulation model. The inputs include the estimated amount and timing of future net sales, and a risk-adjusted discount rate. The inputs are significant inputs not observable in the market, which are referred to as Level 3 inputs and are further discussed in Note 2(f). The first milestone was met in the second quarter of 2019 and subsequently paid out in the third quarter of 2019. The remaining contingent consideration component continues to be subject to the recognition of subsequent changes in fair value through general and administrative expense in the consolidated statement of operations.

In accordance with ASC 805, the Company recorded the acquired assets (including identifiable intangible assets) and liabilities assumed at their respective fair value. The allocation of the total purchase price was as follows (in thousands):

	July 25,
	2017
Cash	$	205
Accounts receivable, net		2,091
Inventories		7,064
Other current assets		170
Property and equipment, net		528
Goodwill		7,629
Intangible assets		14,800
Restricted cash		305
Other assets		12
Liabilities assumed:
Accounts payable		(908	)
Accrued and other current liabilities		(2,294	)
Other current liabilities		(30	)
Net assets acquired	$	29,572

Goodwill was allocated to the miraDry reportable segment. The goodwill recognized is attributable primarily to the assembled workforce and additional market opportunities, and is not deductible for tax purposes.

A summary of the intangible assets acquired, estimated useful lives and amortization method is as follows (in thousands):

			Estimated useful	Amortization
	Amount		life	method
Developed technology	$	3,000	15 years	Accelerated
Customer relationships		6,300	14 years	Accelerated
Distributor relationships		500	9 years	Accelerated
Trade name		5,000	15 years	Accelerated
	$	14,800

For a discussion of the impairment of goodwill and partial impairment of intangible assets associated with the miraDry acquisition in 2019, see Note 2(h).

The Company retained an independent third-party appraiser to assist management in its valuation and the purchase price has been finalized.

Unaudited Pro Forma Information

The following unaudited pro forma financial information presents combined results of operations as if miraDry had been acquired as of the beginning of fiscal year 2017. The pro forma information includes adjustments to amortization for intangible assets acquired, the purchase accounting effect on inventory acquired, interest expense for the additional indebtedness incurred to complete the acquisition, restructuring charges in connection with the acquisition and acquisition costs. The pro forma data are for informational purposes only and are not necessarily indicative of the consolidated results of operations of the combined business had the merger actually occurred at the beginning of fiscal year 2017 or of the results of future operations of the combined business. Consequently, actual results differ from the unaudited pro forma information presented below (in thousands, except per share amount):

	December 31,
	2017
	Pro Forma
Net sales	$	46,747
Net loss		(74,110	)
Pro forma loss per share attributable to ordinary shares - basic and diluted	$	(3.96	)

Balance Sheet Components

12 Months Ended

Dec. 31, 2019

Balance Sheet Related Disclosures [Abstract]

Balance Sheet Components

(5) Balance Sheet Components

Inventories, net consist of the following (in thousands):

	December 31,		December 31,
	2019		2018
Raw materials	$	8,095	$	2,147
Work in progress		5,543		2,110
Finished goods		23,893		18,335
Finished goods - right of return		2,081		1,493
	$	39,612	$	24,085

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

	December 31,			December 31,
	2019			2018
Leasehold improvements	$	2,841		$	402
Manufacturing equipment and toolings		8,175			1,928
Computer equipment		1,250			682
Software		2,602			1,039
Office equipment		111			156
Furniture and fixtures		1,144			826
		16,123			5,033
Less accumulated depreciation		(3,809	)		(2,497	)
	$	12,314		$	2,536

Depreciation expense for the years ended December 31, 2019, 2018 and 2017 was $1.2 million, $1.1 million and $0.9 million, respectively.

Under the terms of the Asset Purchase Agreement with Vesta entered into on November 7, 2019, the Company acquired $7.3 million of fixed assets, including leasehold improvements of $2.4 million, manufacturing equipment of $4.4 million, and capitalized software of $0.5 million. Refer further to Note 4(a).

Accrued and other current liabilities consist of the following:

	December 31,		December 31,
	2019		2018
Payroll and related expenses	$	6,789	$	6,466
Accrued severance		894		—
Accrued commissions		4,984		5,321
Accrued equipment		400		18
Accrued inventory		2,216		—
Deferred and contingent consideration, current portion		6,830		7,645
Audit, consulting and legal fees		630		703
Accrued sales and marketing expenses		1,109		1,374
Operating lease liabilities		1,259		—
Finance lease liabilities		40		—
Other		7,400		6,170
	$	32,551	$	27,697

Leases

12 Months Ended

Dec. 31, 2019

Leases [Abstract]

Leases

(6) Leases

The Company leases certain office space, warehouses, distribution facilities, manufacturing facilities and office equipment. The Company also has embedded leases of manufacturing facilities and equipment associated with the Company’s manufacturing contracts. The Company determines if an arrangement contains a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all of the economic benefits from and has the ability to direct the use of the asset.

Operating and finance lease right-of-use, or ROU, assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The Company determines its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. The ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised. During the fourth quarter of 2019, the Company included a four-year renewal option in the lease term for one operating lease as it was concluded that it was reasonably certain that the Company will exercise the option. The Company elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for short-term leases. The Company’s lease agreements generally do not contain material residual value guarantees or material restrictive covenants.

The Company’s leases of office space, warehouses, distribution facilities and manufacturing facilities are treated as operating leases and often contain lease and non-lease components. The Company has elected to account for these lease and non-lease components separately. Non-lease components for these assets are primarily comprised of common-area maintenance, utilities, and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company, and are recognized in operating expenses in the period in which the obligation for those payments was incurred. Lease cost for these operating leases is recognized on a straight-line basis over the lease term in operating expenses.

The Company’s embedded leases of manufacturing facilities and equipment are treated as operating leases and often contain lease and non-lease components. The Company has elected to account for these lease and non-lease components as a single lease component. There may be variability in future lease payments as the amount of the non-lease components is based on the costs of manufacturing and is dependent on the amount and types of units produced. The Company reduces the operating lease liability when the inventory is purchased.

The Company’s leases of office equipment are accounted for as finance leases as they meet one or more of the five finance lease classification criteria. Lease cost for these finance leases is comprised of amortization of the ROU asset and interest expense which are recognized in operating expenses and other income (expense), net.

Components of lease expense were as follows:

		Year Ended December 31,
Lease Cost	Classification	2019
Operating lease cost	Operating expenses	$	1,550
Operating lease cost	Inventory		4,206
Total operating lease cost		$	5,756
Finance lease cost
Amortization of right-of-use assets	Operating expenses		41
Interest on lease liabilities	Other income (expense), net		4
Total finance lease cost		$	45
Variable lease cost	Inventory		10,568
Total lease cost		$	16,369

Short-term lease expense for the year ended December 31, 2019 was immaterial.

Supplemental cash flow information related to operating and finance leases for the year ended December 31, 2019 was as follows (in thousands):

	Year Ended December 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows from operating leases	$	5,419
Operating cash outflows from finance leases		44
Right-of-use assets obtained in exchange for lease obligations:
Operating leases	$	8,667
Finance leases		117

Operating right-of use assets obtained in exchange for lease obligations of $8.7 million is net of an increase of $17.7 million right-of-use assets in 2019 associated with the Vesta manufacturing agreement which were subsequently removed in connection with the Vesta Acquisition and termination of the Vesta manufacturing agreement on November 7, 2019.

Supplemental balance sheet information, as of December 31, 2019, related to operating and finance leases was as follows (in thousands, except lease term and discount rate):

	December 31,
	2019
Reported as:
Other assets
Operating lease right-of-use assets	$	7,494
Finance lease right-of-use assets		78
Total right-of use assets	$	7,572
Accrued and other current liabilities
Operating lease liabilities	$	1,259
Finance lease liabilities		40
Warranty reserve and other long-term liabilities
Operating lease liabilities		6,434
Finance lease liabilities		35
Total lease liabilities	$	7,768
Weighted average remaining lease term (years)
Operating leases		5
Finance leases		2
Weighted average discount rate
Operating leases		7.45	%
Finance leases		4.06	%

As of December 31, 2019, maturities of the Company’s operating and finance lease liabilities are as follows (in thousands):

Period	Operating leases		Finance leases		Total
2020		1,838		42		1,880
2021		1,871		36		1,907
2022		1,718		—		1,718
2023		1,759		—		1,759
2024 and thereafter		2,246		—		2,246
Total lease payments	$	9,432	$	78	$	9,510
Less imputed interest		1,739		3		1,742
Total operating lease liabilities	$	7,693	$	75	$	7,768

As previously reported in our Annual Report on Form 10-K for the year ended December 31, 2018 and under legacy lease accounting (ASC 840), future minimum lease payments under non-cancellable leases as of December 31, 2018 was as follows (in thousands):

Year Ended December 31:
2019	$	1,325
2020		1,134
2021		1,060
2022		947
2023 and thereafter		1,557
	$	6,023

The table above does not include the minimum purchase obligations of approximately $21.6 million over the five years following December 31, 2018 under the Company’s contracts with its manufacturers which upon adoption of ASU 2016-02 on January 1, 2019 were accounted for as operating lease ROU assets and lease liabilities. In connection with the Vesta Acquisition in 2019, $17.6 million of the remaining minimum purchase obligations were removed concurrently with the termination of the manufacturing contract with Vesta.

Debt

12 Months Ended

Dec. 31, 2019

Debt Disclosure [Abstract]

Debt

(7) Debt

On July 25, 2017, the Company entered into a Credit and Security Agreement, or the Existing Term Loan Credit Agreement, and a Credit and Security Agreement, or the Existing Revolving Credit Agreement with MidCap Financial Trust, which replaced the Company’s prior Silicon Valley Bank Loan Agreement, or the SVB Loan Agreement. On July 1, 2019 the Company entered into a Restated Term Loan Credit Agreement with MidCap Financial Trust as the agent and lender, and additional lenders thereto from time to time, or the Restated Term Loan Agreement, which restated the Existing Term Loan Agreement. Also on July 1, 2019, the Company entered into an Amended and Restated Credit and Security Agreement (Revolving Loan), by and among the Company, the lenders party thereto from time to time, and MidCap Financial Trust, or the Restated Revolving Credit Agreement and, together with the Restated Term Loan Agreement, the Credit Agreements, which restated the Existing Revolving Credit Agreement.

The Restated Term Loan Agreement provided for (i) a $35 million term loan facility drawn at signing, (ii) a $5 million term loan facility drawn at signing, (iii) at any time after September 30, 2020 to December 31, 2020, a $10.0 million term loan facility (subject to the satisfaction of certain conditions, including evidence that the Company’s Net Revenue for the past 12 months was greater than or equal to $100.0 million), and (iv) until December 31, 2020 and upon the consent of Agent and the lenders following a request from the Company, an additional $15.0 million term loan facility, or altogether, the Restated Term Loan. The Restated Term Loan matures on July 1, 2024 and carries an interest rate of LIBOR plus 7.50%. The Company will make monthly payments of accrued interest under the Restated Term Loan from the funding date of the Restated Term Loan, until July 31, 2021, to be followed by monthly installments of principal and interest through the Maturity Date of July 1, 2024. The Company may prepay all of the Restated Term Loan prior to its maturity date provided the Company pays MidCap a prepayment fee. Net proceeds from the Restated Term Loan were used to repay the $35 million outstanding balance related to the Term Loans. As of December 31, 2019, there was $40.0 million outstanding related to the Restated Term Loans. As of December 31, 2019, the long-term portion of the unamortized debt issuance costs on the Restated Term Loans was approximately $1.8 million and are included as a reduction to debt on the consolidated balance sheet. As of December 31, 2019, there was no current portion of unamortized debt issuance costs.

The Restated Revolving Credit Agreement provides for, among other things, a revolving loan of up to $10.0 million (the “Restated Revolving Loan”). The amount of loans available to be drawn under the Revolving Credit Agreement is based on a borrowing base equal to 85% of the net collectible value of eligible accounts receivable plus 40% of eligible finished goods inventory, or the Borrowing Base, provided that availability from eligible finished goods inventory does not exceed 20% of the Borrowing Base. The Restated Revolving Loan carries an interest rate of LIBOR plus 4.50%. The Borrowers may make (subject to the applicable borrowing base at the time) and repay borrowings from time to time under the Restated Revolving Credit Agreement until the maturity of the facility on July 1, 2024. Immediately prior to the effectiveness of the Restated Revolving Credit Agreement, the Company converted the $4.3 million outstanding borrowings under the Revolving Loan into the Restated Revolving Loan. As of December 31, 2019, there were $6.5 million borrowings outstanding under the Revolving Loan. As of December 31, 2019, the unamortized debt issuance costs related to the Revolving Loan was approximately $0.1 million and was included in other long-term assets on the consolidated balance sheet.

The amortization of debt issuance costs for the years ended December 31, 2019 and 2018 was $0.4 million and $0.2 million, respectively, and was included in interest expense in the consolidated statements of operations.

The Credit Agreements include customary affirmative and restrictive covenants and representations and warranties, including a financial covenant for minimum revenues, a financial covenant for minimum cash requirements, a covenant against the occurrence of a “change in control,” financial reporting obligations, and certain limitations on indebtedness, liens, investments, distributions, collateral, mergers or acquisitions, taxes, and deposit accounts. Upon the occurrence of an event of default, a default interest rate of an additional 5.0% may be applied to any outstanding principal balances, and Midcap may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Credit Agreements. The Company’s obligations under the Credit Agreements are secured by a security interest in substantially all of the Company’s assets.

Future Principal Payments of Debt

The future schedule of principal payments for the outstanding Term Loans as of December 31, 2019 was as follows (in thousands):

Fiscal Year
2020	$	-
2021		5,556
2022		13,333
2023		13,333
2024		7,778
Total	$	40,000

Deerfield Facility, Convertible Note and Guaranty

On March 11, 2020, the Company entered into a Facility Agreement (the “Deerfield Facility Agreement”) by and among the Company, as borrower, certain of the Company’s subsidiaries party thereto as guarantors (collectively with the Company, the “Loan Parties”) and Deerfield Partners, L.P. (“Deerfield”), as agent for itself and the lenders, providing for the sale by the Company to Deerfield of $60.0 million of principal amount of 4.0% unsecured and subordinated convertible notes (the “Convertible Note”) upon the terms and conditions set forth in the Deerfield Facility Agreement (the “Deerfield Financing”). On the date of the Deerfield Facility Agreement, the Company issued a $60.0 million Convertible Note to Deerfield, which Convertible Note matures on the fifth anniversary of the issuance date and is convertible into shares of the Company’s Common Stock, at an initial conversion price of $4.10 per share, representing a 35% premium over the Company’s closing stock price of $3.04 per share on March 10, 2020. In connection with the Deerfield Facility Agreement and the Convertible Note issued thereunder, all of the Company’s operating subsidiaries (each a “Guarantor” and, collectively, the “Guarantors”) entered into a Guaranty, dated as of March 11, 2020 (the “Guaranty”), whereby the Guarantors agreed to guarantee the obligations and liabilities of the Company under the Deerfield Facility Agreement and the Convertible Note.

The Convertible Note bears interest at 4.0% per annum. The Convertible Note is convertible at any time at the option of Deerfield, provided that Deerfield is prohibited from converting the Convertible Note into shares of Common Stock if, as a result of such conversion, the Holder (together with certain affiliates and “group” members) would beneficially own more than 4.985% of the total number of shares of Common Stock then issued and outstanding. Pursuant to the Convertible Note, Deerfield has the option to demand repayment of all outstanding principal, and any unpaid interest accrued thereon, in connection with a Major Transaction (as defined in the Convertible Note), 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 Note) 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 Note). The Convertible Note is 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 Deerfield Facility 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 judgement levied against the Company and a material default by the Company under the Convertible Note.

In connection with the Deerfield Financing, the Company also entered into a Subordination Agreement, by and among Deerfield, the Company, MiraDry Holdings, Inc., MiraDry, Inc. and MiraDry International, Inc. and MidCap Funding IV Trust, pursuant to which the parties thereto agreed that the obligations of the Company to Deerfield under the Deerfield Facility Agreement and under the Convertible Note shall be subordinate to the Company’s obligations to MidCap Funding IV Trust, as agent for the financial institutions party to that certain Amended and Restated Credit and Security Agreement (Revolving Loan) dated as of July 1, 2019, which agreement the Company, MiraDry Holdings, Inc., MiraDry, Inc. and MiraDry International, Inc. and MidCap Funding IV Trust are a party to.

In connection with the Deerfield Financing, the Company also entered into a Subordination Agreement, by and among Deerfield, the Company, MiraDry Holdings, Inc., MiraDry, Inc. and MiraDry International, Inc. and MidCap Financial Trust, pursuant to which the parties thereto agreed that the obligations of the Company to Deerfield under the Deerfield Facility Agreement and under the Convertible Note shall be subordinate to the Company’s obligations to MidCap Financial Trust, as agent for the financial institutions party to that certain Amended and Restated Credit and Security Agreement (Term Loan) dated as of July 1, 2019 , which agreement the Company, MiraDry Holdings, Inc., MiraDry, Inc. and MiraDry International, Inc. and MidCap Financial Trust are a party to.

Registration Rights Agreement

In connection with the Deerfield Facility Agreement, on March 11, 2020, the Company and Deerfield entered into a Registration Rights Agreement (the “Registration Rights Agreement”). Pursuant to the Registration Rights Agreement, the Company has agreed to prepare and file with the SEC a Registration Statement on Form S-3, or such other form as required to effect a registration of the Common Stock issued or issuable upon conversion of or pursuant to the Convertible Note (the “Registrable Securities”), covering the resale of the Registrable Securities and such indeterminate number of additional shares of Common Stock as may become issuable upon conversion of or otherwise pursuant to the Convertible Note to prevent dilution resulting from certain corporate actions. Such Registration Statement must be filed within 30 calendar days following the date of issuance of the Convertible Note.

Goodwill and Other Intangible Assets, net

12 Months Ended

Dec. 31, 2019

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets, net

(8) Goodwill and Other Intangible Assets, net

(a)

Goodwill

The Company has determined that it has two reporting units, Breast Products and miraDry, and evaluates goodwill for impairment at least annually on October 1^st and whenever circumstances suggest that goodwill may be impaired. As of December 31, 2019 and December 31, 2018 the miraDry reporting unit had a negative carrying value.

The changes in the carrying amount of goodwill during the years ended December 31, 2019 and 2018 were as follows (in thousands):

	Breast Products		miraDry			Total
Balances as of December 31, 2016	$	4,878	$	—		$	4,878
Goodwill acquired (Note 4)		—		7,629			7,629
Balances as of December 31, 2017	$	4,878	$	7,629		$	12,507
Goodwill acquired	$	—	$	—		$	—
Balances as of December 31, 2018	$	4,878	$	7,629		$	12,507
Goodwill acquired (Note 4)	$	4,324	$	—		$	4,324
Impairment losses		—		(7,629	)		(7,629	)
Balances as of December 31, 2019	$	9,202	$	—		$	9,202

The Company recorded a full impairment on miraDry goodwill of $7.6 million during the second quarter ended June 30, 2019. For the Breast Products reporting unit, the Company conducted the annual goodwill impairment test in the fourth quarter of 2019 and determined no impairment of goodwill.

(b)	Other Intangible Assets

The components of the Company’s other intangible assets consist of the following definite-lived and indefinite-lived assets (in thousands):

	Average
	Amortization		December 31, 2019
	Period		Gross Carrying		Accumulated			Intangible
	(in years)		Amount		Amortization			Assets, net
Intangibles with definite lives
Customer relationships		11	$	9,540	$	(3,846	)	$	5,694
Trade names - finite life		14		2,000		(292	)		1,708
Developed technology		13		1,500		(84	)		1,416
Non-compete agreement		2		80		(80	)		—
Regulatory approvals		1		670		(670	)		—
Acquired FDA non-gel product approval		11		1,713		(1,713	)		—
Manufacturing know-how		19		8,240		(118	)		8,122
Total definite-lived intangible assets			$	23,743	$	(6,803	)	$	16,940

Intangibles with indefinite lives
Trade names - indefinite life	—			450		—			450
Total indefinite-lived intangible assets			$	450	$	—		$	450

	Average
	Amortization		December 31, 2018
	Period		Gross Carrying		Accumulated			Intangible
	(in years)		Amount		Amortization			Assets, net
Intangibles with definite lives
Customer relationships		11	$	11,240	$	(3,486	)	$	7,754
Trade names - finite life		14		5,800		(541	)		5,259
Developed technology		15		3,000		(338	)		2,662
Distributor relationships		9		500		(130	)		370
Non-compete agreement		2		80		(80	)		—
Regulatory approvals		1		670		(670	)		—
Acquired FDA non-gel product approval		11		1,713		(1,713	)		—
Total definite-lived intangible assets			$	23,003	$	(6,958	)	$	16,045

Intangibles with indefinite lives
Trade names - indefinite life	—			450		—			450
Total indefinite-lived intangible assets			$	450	$	—		$	450

Amortization expense for the year ended December 31, 2019, 2018 and 2017 was $2.3 million, $2.3 million and $2.2 million, respectively. The following table summarizes the estimated amortization expense relating to the Company's intangible assets as of December 31, 2019 (in thousands):

	Amortization
Period	Expense
2020	$	2,301
2021		2,092
2022		1,949
2023		1,803
2024		1,586
Thereafter		7,209
	$	16,940

Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Income Taxes

(9) Income Taxes

The provision for income tax consists of the following:

	Year Ended December 31,
	2019		2018			2017
Federal	$	9	$	2		$	(38	)
State		9		(10	)		17
Foreign		16		4			4
Total income tax (benefit) expense	$	34	$	(4	)	$	(17	)

Actual income tax expense differs from that obtained by applying the statutory federal income tax rate of 21% in 2019 and 2018 and 35% in 2017 to income before income taxes as follows: (in thousands):

	Year Ended December 31,
	2019			2018			2017
Tax at federal statutory rate	$	(22,424	)	$	(17,353	)	$	(21,776	)
State, net of federal benefit		(2,109	)		(5,999	)		(2,637	)
Permanent items		857			338			1,327
Benefit state rate change		337			60			(56	)
Other		368			(103	)		(156	)
Change in federal statutory rate		—			—			34,555
Goodwill impairment		1,602			—			—
Change in valuation allowance		21,403			23,053			(11,274	)
	$	34		$	(4	)	$	(17	)

The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and liabilities are as follows (in thousands):

	December 31,
	2019			2018
Net operating loss carryforwards	$	99,759		$	80,382
Research and development credits		3,626			3,494
Lease liabilities		1,902			—
Accruals and reserves		9,636			8,896
Intangibles		5,330			4,599
		120,253			97,371
Less valuation allowance		(115,307	)		(93,904	)
Total deferred tax assets	$	4,946		$	3,467

Depreciation	$	(40	)	$	(15	)
Right-of-use assets	$	(1,854	)	$	-
Intangibles - deferred tax liability		(3,102	)		(3,484	)
Total deferred tax liabilities		(4,996	)		(3,499	)
Net deferred taxes	$	(50	)	$	(32	)

In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Generally, the ultimate realization of deferred tax assets is dependent on the generation of future taxable income during the periods in which those temporary differences become deductible. Based on all the relevant factors, a valuation allowance of $115.3 million has been established against deferred tax assets as of December 31, 2019 as management determined that it is more likely than not that sufficient taxable income will not be generated to realize these temporary differences.

As of December 31, 2019, the Company had net operating loss carryforwards of approximately $388.9 million and $224.9 million available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. Of the $388.9 million in federal net operating loss carryforwards, $235.3 million relate to net operating loss carryforwards generated from 2006 through 2017 and are carried forward for 20 years from the year of generation, and $153.5 million relate to net operating loss carryforwards generated from 2018 and 2019 and are carried forward indefinitely subject to an 80% limitation. The state net operating loss carryforwards began expiring in 2017. It is possible that the Company will not generate taxable income in time to use these NOLs before their expiration. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an “ownership change ”, the corporation's ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. In general, an “ownership change” occurs if there is a cumulative change in a loss corporation’s ownership by 5% shareholders that exceeds 50 percentage points over a rolling three-year period.

At December 31, 2019, the Company had research and development credit carryforwards of approximately $2.1 million and $2.7 million available to reduce future taxable income, income, if any, for federal and California state income tax purposes, respectively. The federal credit carryforwards begin expiring in 2029 and the state credits carryforward indefinitely.

At December 31, 2019, the Company had unrecognized tax benefits of approximately $1.1 million associated with the research and development credits. The Company does not anticipate that total unrecognized net tax benefits will significantly change over the next twelve months.

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows (in thousands):

Ending balance at December 31, 2017	$	966
Additions based on tax positions taken in the current year		110
Ending balance at December 31, 2018		1,076
Additions based on tax positions taken in the current year		40
Ending balance at December 31, 2019	$	1,116

It is the Company’s policy to include penalties and interest expense related to income taxes as a component of other (income) expense and interest expense, respectively, as necessary. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2019.

The Company files U.S. federal, state, and international income tax returns in jurisdictions with varying statute of limitations. In general, the Company’s federal tax returns for 2016 to 2018 and state tax returns for 2015 to 2018 remain open for examination by the federal and state tax authorities, including net operating loss carryforwards to those years.

Employee Benefit Plans

12 Months Ended

Dec. 31, 2019

Compensation And Retirement Disclosure [Abstract]

Employee Benefit Plans

(10) Employee Benefit Plans

In September 2016, the Company adopted a Section 401(k) Retirement Savings Plan for the benefit of eligible employees. All employees become eligible to participate in the plan the first of the month following their hire date and may contribute their pretax or after–tax salary, up to the Internal Revenue Service annual contribution limit. The Company makes contributions to the 401(k) plan under a safe harbor provision, whereby the Company contributes 3% of each participating employee’s annual compensation. The Company contributions vest immediately. The Company contributed and included in operating expense $0.7 million, $0.7 million and $0.6 million for the years ended December 31, 2019, 2018 and 2017 respectively.

Stockholders' Equity

12 Months Ended

Dec. 31, 2019

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stockholders' Equity

(11) 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 December 31, 2019, the Company had no preferred stock issued or outstanding.

(b)	Common Stock Warrants

On January 17, 2013, the Company entered into a Loan and Security Agreement, or the Original Term Loan Agreement, with Oxford Finance, LLC, or Oxford. On June 30, 2014, the Company entered into the Amended and Restated Loan and Security Agreement, or the Amended Term Loan Agreement, with Oxford. In connection with the Original Term Loan Agreement and the Amended Term Loan Agreement, the Company issued to Oxford (i) seven-year warrants in January 2013 to purchase shares of the Company’s common stock with a value equal to 3.0% of the tranche A, B and C term loan amounts and (ii) seven-year warrants in June 2014 to purchase shares of the Company’s common stock with a value equal to 2.5% of the tranche D term loan amount. The warrants have an exercise price per share of $14.671. As of December 31, 2019, there were warrants to purchase an aggregate of 47,710 shares of common stock outstanding.

(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. Options granted under the 2007 Plan may either be incentive stock options or nonstatutory stock options. Incentive stock options, or ISOs, may be granted only to Company employees. Nonstatutory stock options, or NSOs, may be granted to all eligible recipients. A total of 1,690,448 shares of the Company’s common stock were reserved for issuance under the 2007 Plan.

As of December 31, 2019, pursuant to the 2007 Plan, there were 360,015 options outstanding and no shares of common stock available for future grants.

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. Under the 2014 Plan, the Company may issue ISOs, NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards and other forms of stock awards, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of the Company and their affiliates. ISOs may be granted only to employees. A total of 1,027,500 shares of common stock were initially reserved for issuance under the 2014 Plan, subject to certain annual increases.

As of December 31, 2019, pursuant to the 2014 Plan, there were 4,710,672 shares of common stock reserved and 615,460 shares of common stock available for future grants.

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 December 31, 2019, inducement grants for 1,294,949 shares of common stock have been awarded, and 217,379 shares of common stock were reserved for future issuance under the Inducement 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.

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)
Balances at December 31, 2017		2,179,787		$	7.60		7.27
Granted		—			—
Exercised		(147,463	)		7.79
Forfeited		(78,990	)		11.68
Balances at December 31, 2018		1,953,334			7.42		6.30
Granted		—			—
Exercised		(51,451	)		2.44
Forfeited		(21,037	)		19.39
Balances at December 31, 2019		1,880,846		$	7.42		5.48
Vested and expected to vest at December 31, 2019		1,880,846
Vested and exercisable at December 31, 2019		1,794,439					5.74

There were no stock options granted during the years ended December 31, 2019 and 2018. The weighted average grant date fair value of stock options granted to employees and directors during the year ended December 31, 2017 was $4.54 per share. Stock-based compensation expense for stock options for the years ended December 31, 2019, 2018 and 2017 was $0.6 million, $1.6 million and $2.2 million, respectively. Tax benefits arising from the disposition of certain shares issued upon exercise of stock options within two years of the date of grant or within one year of the date of exercise by the option holder, or Disqualifying Dispositions, provide the Company with a tax deduction equal to the difference between the exercise price and the fair market value of the stock on the date of exercise. As of December 31, 2019 there was no unrecognized compensation cost related to stock options granted under the plans. The expense is recorded within the operating expense components in the consolidated statement of operations based on the employees receiving the awards.

The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those stock options that had exercise prices lower than the fair value of the Company’s common stock. The aggregate intrinsic value of stock options exercised was $0.6 million, $2.0 million, and $3.1 million during the years ended December 31, 2019, 2018 and 2017, respectively.

The expected term of employee stock options, risk‑free interest rate and volatility represents the weighted average, based on grant date period which the stock options are expected to remain outstanding. The Company utilized the simplified method to estimate the expected term of the options pursuant to ASC Subtopic 718‑10 for all option grants to employees. The Company estimates its expected stock volatility based on company-specific historical and implied volatility information of its stock. The risk‑free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected term of the option. The dividend yield assumption is based on the Company’s history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future. The Company records forfeitures when they occur.

For purposes of financial accounting for stock‑based compensation, the Company has determined the fair values of its options based in part on the work of a third‑party valuation specialist. The determination of stock‑based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If the Company had made different assumptions, its stock‑based compensation expense, and its net loss could have been significantly different.

(d)	Restricted Stock Units

The Company has issued restricted stock unit awards, or RSUs, to employees and non-employees under the 2014 Plan and Inducement Plan. The RSUs issued to employees generally vest on a straight-line basis annually over a 3-year requisite service period. The RSUs issued to non-employees are generally for consulting services and 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
Balances at December 31, 2017		928,552		$	9.12
Granted		1,932,840			14.38
Vested		(523,257	)		10.40
Forfeited		(196,785	)		12.26
Balances at December 31, 2018		2,141,350		$	13.27
Granted		1,407,768			8.02
Vested		(944,467	)		10.56
Forfeited		(371,695	)		7.99
Balances at December 31, 2019		2,232,956		$	11.99

The weighted average grant date fair value of RSUs granted to employees and directors during the years ended December 31, 2019, 2018 and 2017 was $8.02, $14.38, and $9.19 per share, respectively. Stock-based compensation expense for RSUs for the years ended December 31, 2019, 2018 and 2017 was $11.3 million, $11.7 million and $4.1 million, respectively. As of December 31, 2019, there was $13.2 million total unrecognized compensation cost related to non-vested RSU awards. The cost is expected to be recognized over a weighted average period of 1.74 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 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, except that the first offering period commenced on the first trading day following the effective date of the Company’s registration statement. 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 exercise date. A total of 255,500 shares of common stock were initially reserved for issuance under the ESPP. The number of shares available for sale under the ESPP will be increased annually on the first day of each fiscal year, equal to the lesser of i) 1% of the total outstanding shares of the Company’s common stock as of the last day of the immediately preceding fiscal year; ii) 3,000,000 shares of common stock, or iii) such lesser amount as determined by the board of directors.

As of December 31, 2019, the number of shares of common stock reserved for issuance under the ESPP was 1,250,857. During the year ended December 31, 2019, employees purchased 175,624 shares under the ESPP at a weighted average exercise price of $6.93 per share. During the year ended December 31, 2018, employees purchased 145,616 shares under the ESPP at a weighted average exercise price of $6.82 per share. As of December 31, 2019, the number of shares of common stock available for future issuance under the ESPP was 654,619. Stock-based compensation related to the ESPP for the years ended December 31, 2019, 2018 and 2017 was $0.8 million, $0.6 million, and $0.4 million, respectively.

Segment Reporting and Geographic Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

Segment Reporting and Geographic Information

(12) Segment Reporting and Geographic Information

(a)	Reportable Segments

The Company has two reportable segments: Breast Products and miraDry. The Breast Products segment focuses on sales of silicone gel breast implants, tissue expanders and scar management products under the brands Sientra, AlloX2, Dermaspan, Softspan and BIOCORNEUM. The miraDry segment focuses on sales of the miraDry System, consisting of a console and a handheld device which uses consumable single-use bioTips. These segments align with the Company’s principal target markets. On July 25, 2017, the Company acquired miraDry, and on November 7, 2019, the Company acquired Vesta. See Note 4 – Acquisitions for additional details. miraDry has been included in the consolidated results of operations as of the acquisition date and financial performance of the acquired business is reported in the miraDry segment. Vesta has been included in the consolidated results of operations as of the acquisition date and financial performance of the acquired business is reported in the Breast Products segment.

The Company’s CODM assesses the performance of each segment and allocates resources to those segments based on net sales and operating income (loss). Operating income (loss) by segment includes items that are directly attributable to each segment, including sales and marketing functions, as well as finance, information technology, human resources, legal and related corporate infrastructure costs, along with certain benefit-related expenses. There are no unallocated expenses for the two segments.

The following tables present the net sales, net operating loss and net assets by reportable segment for the periods presented (in thousands):

	December 31,
	2019		2018		2017
Net sales
Breast Products	$	46,363	$	37,016	$	31,485
miraDry		37,336		31,110		5,057
Total net sales	$	83,699	$	68,126	$	36,542

	December 31,
	2019			2018			2017
Loss from operations
Breast Products	$	(50,175	)	$	(53,047	)	$	(56,657	)
miraDry		(53,392	)		(26,727	)		(6,233	)
Total loss from operations	$	(103,567	)	$	(79,774	)	$	(62,890	)

	December 31,		December 31,
	2019		2018
Assets
Breast Products	$	169,613	$	130,149
miraDry		34,791		38,210
Total assets	$	204,404	$	168,359

(b)	Geographic Information

Net sales are attributed to geographic areas based on where the Company’s products are shipped. The following table presents the net sales by geographical region for the periods presented (in thousands):

	December 31,
	2019		2018		2017
United States	$	62,277	$	49,975	$	33,473
International		21,422		18,151		3,069
Total net sales	$	83,699	$	68,126	$	36,542

Commitments and Contingencies

12 Months Ended

Dec. 31, 2019

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

(13) Commitments and Contingencies

The Company is subject to claims and assessments 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.

Class Action Shareholder Litigation

In September 2016, the Company signed a memorandum of understanding, approved by the state court in May 2017, settling claims against the Company and certain of its officers and directors, and the underwriters associated with the Company’s follow-on public offering that closed on September 23, 2015 as defendants for allegedly false and misleading statements in the Company’s offering documents associated with the follow-on offering concerning its business, operations, and prospects.

As a result of these developments, the Company determined a probable loss had been incurred and recognized a net charge to earnings of approximately $1.6 million within general and administrative expense within the consolidated statement of operations which was comprised of the loss contingency of approximately $10.9 million, net of expected insurance proceeds of approximately $9.4 million. In the first quarter of 2017, the Company received $9.3 million in insurance proceeds and paid the $10.9 million loss contingency.

Silimed Litigation

On July 27, 2017, the Company entered into a settlement agreement, or the Settlement Agreement, with Silimed pursuant to which, in exchange for a mutual release of claims and covenants not to sue or pursue certain litigation, Sientra paid Silimed a lump sum of $9.0 million in September 2017 and paid an additional $1.0 million in June 2018. In addition, should the Company enter into international markets using certain breast implant specifications, the Company has agreed to make royalty payments of $12.50 on each of its net sales of such products, up to a maximum royalty of $5.0 million. As a result of the settlement, the Company recorded $10.0 million for the year ended December 31, 2017 in legal settlement expense.

miraDry Class Action Litigation

On August 3, 2017, a lawsuit styled as a verified class action on the part of the former stockholders of miraDry was filed in the Court of Chancery for the State of Delaware against the former board of directors of miraDry, or the Defendants, alleging breach of their fiduciary duties in connection with the Company’s acquisition of miraDry. On August 30, 2017, the Defendants moved to dismiss the verified class action complaint for failure to state a claim upon which relief can be granted. On November 11, 2017 the parties notified the Court that they had reached an agreement to settle the matter pending completion of confirmatory discovery regarding the fairness of the settlement and obtaining approval from the court. Following a hearing, the Delaware Chancery Court approved the proposed settlement terms on January 15, 2019, with a modification to the amount of attorneys’ fees awarded to the plaintiffs’ attorneys. Under the terms of the settlement, in exchange for a full and final settlement and release of all claims, the Defendants (and/or their indemnitors and/or insurers) paid a settlement consideration of $0.4 million. The miraDry Merger Agreement contained a holdback amount expected to be used for the settlement and associated costs of the miraDry Class Action litigation. The holdback amount has been used to offset $0.6 million of legal fees and $0.4 million was included in “legal settlement payable” on the consolidated balance sheet as of December 31, 2018. The legal settlement of $0.4 million was paid during the first quarter of 2019.

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. The Company intends to vigorously defend itself in this lawsuit. Given the nature of this case, the Company is unable to estimate the reasonably possible loss or range of loss, if any, arising from this matter.

Summary of Quarterly Financial Information (Unaudited)

12 Months Ended

Dec. 31, 2019

Selected Quarterly Financial Information [Abstract]

Summary of Quarterly Financial Information (Unaudited)

(14) Summary of Quarterly Financial Information (Unaudited)

The following tables set forth our unaudited quarterly statements of operations data and our key metrics for each of the eight quarters ended December 31, 2019. We have prepared the quarterly data on a consistent basis with the audited financial statements included in this report. In the opinion of management, the financial information reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data. This information should be read in conjunction with the audited financial statements and related notes included elsewhere in this report. The results of historical periods are not necessarily indicative of the results of operations for a full year or any future period.

	Quarter Ended
2019	March 31			June 30			September 30			December 31
	(in thousands, except share data)
Net sales	$	17,552		$	20,525		$	22,412		$	23,210
Gross profit		11,078			12,712			12,658			14,239
Net loss		(26,484	)		(37,654	)		(22,433	)		(20,247	)
Net loss per share:
Basic and diluted	$	(0.91	)	$	(1.10	)	$	(0.45	)	$	(0.41	)

	Quarter Ended
2018	March 31			June 30			September 30			December 31
	(in thousands, except share data)
Net sales	$	14,676		$	17,554		$	16,875		$	19,021
Gross profit		8,579			10,894			10,477			11,354
Net loss		(19,423	)		(18,028	)		(20,545	)		(24,631	)
Net loss per share:
Basic and diluted	$	(0.99	)	$	(0.73	)	$	(0.72	)	$	(0.86	)

Subsequent Events

12 Months Ended

Dec. 31, 2019

Subsequent Events [Abstract]

Subsequent Events

(15) Subsequent Events

On March 11, 2020, the Company entered into a Facility Agreement (the “Deerfield Facility Agreement”) by and among the Company, as borrower, certain of the Company’s subsidiaries party thereto as guarantors (collectively with the Company, the “Loan Parties”) and Deerfield Partners, L.P. (“Deerfield”), as agent for itself and the lenders, providing for the sale by the Company to Deerfield of $60.0 million of principal amount of 4.0% unsecured and subordinated convertible notes (the “Convertible Note”) upon the terms and conditions set forth in the Deerfield Facility Agreement (the “Deerfield Financing”). Refer to Note 7 – Debt for further details.

Schedule II - Valuation And Qualifying Accounts

12 Months Ended

Dec. 31, 2019

Valuation And Qualifying Accounts [Abstract]

Schedule II - Valuation And Qualifying Accounts

Sientra, Inc.

Schedule II — Valuation and Qualifying Accounts

December 31, 2019, 2018 and 2017

(In thousands)

			Additions
	Balance at		charged to					Balance at
	beginning of		costs and					end of
	period		expenses		Deductions⁽¹⁾			period
Year Ended December 31, 2017
Allowance for sales returns	$	3,908	$	48,098	$	(48,100	)	$	3,906
Year Ended December 31, 2018
Sales return liability	$	3,906	$	70,608	$	(68,466	)	$	6,048
Year Ended December 31, 2019
Sales return liability	$	6,048	$	106,216	$	(104,148	)	$	8,116

(1)	Amounts represent actual sales returns.

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2019

Accounting Policies [Abstract]

Basis of Presentation and Use of Estimates

(a)	Basis of Presentation and Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to significant judgment and use of estimates include the allowance for doubtful accounts, sales return liability, provision for warranties, valuation of inventories, recoverability of long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and finite lived intangible assets, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with stock-based compensation and other equity instruments.

Liquidity

(b)

Liquidity

Since the Company’s inception, it has incurred significant net operating losses and the Company anticipates that losses will continue in the near term. Although the Company expects its operating expenses will begin to decrease with the implementation of the organizational efficiency initiative, the Company will need to generate significant net sales to achieve profitability. To date, the Company has funded operations primarily with proceeds from the sales of preferred stock, borrowings under term loans, sales of products since 2012, and the proceeds from the sale of common stock in public offerings.

The accompanying consolidated financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. At December 31, 2019, the Company had cash and cash equivalents of $87.6 million. Since inception, the Company has incurred recurring losses from operations and cash outflows from operating activities. During the years ended December 31, 2019, 2018 and 2017 the Company incurred net losses of $106.8 million, $82.6 million and $64.0 million, respectively. The Company used $87.0 million of cash in operations for the year ended December 31, 2019, $56.2 million for the year ended December 31, 2018 and $45.9 million for the year ended December 31, 2017. At December 31, 2019 and 2018 the Company had an accumulated deficit of $468.9 million and $362.1 million, respectively. The continuation of the Company as a going concern is dependent upon many factors including liquidity and the ability to raise capital. The Company received FDA approval of their PMA supplement on April 17, 2018 and was then able to access a $10.0 million term loan pursuant to an amendment to the credit agreement with MidCap Financial Trust, or MidCap. In addition, in February 2018, the Company entered into an At-The-Market Equity Offering Sales Agreement with Stifel, Nicolaus & Company, Incorporated, or Stifel, as sales agent pursuant to which the Company may sell, from time to time, through Stifel, shares of its common stock having an aggregate gross offering price of up to $50.0 million. As of December 31, 2019, the Company had not sold any common stock pursuant to the sales agreement. Further, on May 7, 2018 and June 7, 2019, the Company completed public offerings of its common stock, raising approximately $107.6 million and $107.7 million, respectively, in net proceeds after deducting underwriting discounts and commissions and other offering expenses.

On March 11, 2020, the Company entered into a Facility Agreement (the “Deerfield Facility Agreement”) by and among the Company, as borrower, certain of the Company’s subsidiaries party thereto as guarantors (collectively with the Company, the “Loan Parties”) and Deerfield Partners, L.P. (“Deerfield”), as agent for itself and the lenders, providing for the sale by the Company to Deerfield of $60.0 million of principal amount of 4.0% unsecured and subordinated convertible notes (the “Convertible Note”) upon the terms and conditions set forth in the Deerfield Facility Agreement (the “Deerfield Financing”). Refer to Note 7 – Debt for further details.

Cash and Cash Equivalents

(c)	Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist primarily of cash in checking accounts and interest-bearing money market accounts.

Concentration of Credit and Supplier Risks

(d)	Concentration of Credit and Supplier Risks

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company’s cash and cash equivalents are deposited in demand accounts at financial institutions that management believes are creditworthy. The Company is exposed to credit risk in the event of default by these financial institutions for cash and cash equivalents in excess of amounts insured by the Federal Deposit Insurance Corporation, or FDIC. Management believes that the Company’s investments in cash and cash equivalents are financially sound and have minimal credit risk and the Company has not experienced any losses on its deposits of cash and cash equivalents.

The Company relies on a limited number of third-party manufacturers for the manufacturing and supply of its products. This could result in the Company not being able to acquire the inventory needed to meet customer demand, which would result in possible loss of sales and affect operating results adversely.

Fair Value of Financial Instruments

(e)	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 common stock warrant liability, deferred and contingent consideration are discussed in Note 2(f) below. The fair value of the debt is based on the amount of future cash flows associated with the instrument discounted using the Company’s market rate. At December 31, 2019, the carrying value of the long-term debt was not materially different from the fair value.

Fair Value Measurements

(f)	Fair Value Measurements

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:

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Level 1 — Quoted prices in active markets for identical assets or liabilities.

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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.

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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.

The Company’s common stock warrant liabilities are carried at fair value determined according to the fair value hierarchy described above. The Company has utilized an option pricing valuation model to determine the fair value of its outstanding common stock warrant liabilities. The inputs to the model include fair value of the common stock related to the warrant, exercise price of the warrant, expected term, expected volatility, risk-free interest rate and dividend yield. The warrants are valued using the fair value of common stock as of the measurement date. The Company estimates its expected stock volatility based on company-specific historical and implied volatility information of its stock. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company has estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends. As several significant inputs are not observable, the overall fair value measurement of the warrants is classified as Level 3.

The Company assessed the fair value of the contingent consideration for future royalty payments related to the acquisition of BIOCORNEUM and the contingent consideration for the future milestone payments related to the acquisition of miraDry using a Monte-Carlo simulation model. Significant assumptions used in the measurement include future net sales for a defined term and the risk-adjusted discount rate associated with the business. As the inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3.

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of December 31, 2019 and 2018 and indicate the level of the fair value hierarchy utilized to determine such fair value (in thousands):

	Fair Value Measurements as of
	December 31, 2019 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Liability for common stock warrants	$	—		—		38		38
Liability for contingent consideration		—		—		6,891		6,891
	$	—		—		6,929		6,929

	Fair Value Measurements as of
	December 31, 2018 Using:
	Level 1		Level 2		Level 3		Total
Liabilities:
Liability for common stock warrants	$	—		—		113		113
Liability for contingent consideration		—		—		13,847		13,847
	$	—		—		13,960		13,960

The liability for common stock warrants and the current portion of contingent consideration is included in “accrued and other current liabilities” and the long-term liabilities for the contingent consideration are included in “deferred and contingent consideration” in the consolidated balance sheet. The following table provides a rollforward of the aggregate fair values of the Company’s common stock warrants and contingent consideration for which fair value is determined by Level 3 inputs (in thousands):

Warrant Liability
Balance, December 31, 2018	$	113
Change in fair value of warrant liability		(75	)
Balance, December 31, 2019	$	38
Contingent Consideration Liability
Balance, December 31, 2018	$	13,847
Settlements of contingent consideration		(8,000	)
Change in fair value of contingent consideration		1,044
Balance, December 31, 2019	$	6,891

The Company recognizes changes in the fair value of the warrants in “other income (expense), net” in the consolidated statement of operations and changes in contingent consideration are recognized in “general and administrative” expense in the consolidated statement of operations.

Property and Equipment

(g)	Property and Equipment

Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful life of the asset, generally three to fifteen years. Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Upon retirement or sale of an asset, the cost and related accumulated depreciation or amortization are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred.

Goodwill and Other Intangible Assets

(h)	Goodwill and Other Intangible Assets