SIENTRA, INC., 10-Q filed on 11/12/2021
Quarterly Report
v3.21.2
Document and Entity Information - shares
 9 Months Ended
Sep. 30, 2021
Nov. 05, 2021
Cover [Abstract]    
Entity Registrant Name SIENTRA, INC.  
Entity Central Index Key 0001551693  
Document Type 10-Q  
Document Period End Date Sep. 30, 2021  
Amendment Flag false  
Current Fiscal Year End Date --12-31  
Entity Filer Category Non-accelerated Filer  
Entity Small Business true  
Entity Emerging Growth Company false  
Entity Common Stock, Shares Outstanding   58,122,465
Document Fiscal Year Focus 2021  
Document Fiscal Period Focus Q3  
Trading Symbol SIEN  
Title of 12(b) Security Common Stock, par value $0.01 per share  
Security Exchange Name NASDAQ  
Entity Interactive Data Current Yes  
Entity Current Reporting Status Yes  
Entity Shell Company false  
Entity File Number 001-36709  
Entity Incorporation, State or Country Code DE  
Entity Tax Identification Number 20-5551000  
Entity Address, Address Line One 420 South Fairview Avenue  
Entity Address, Address Line Two Suite 200  
Entity Address, City or Town Santa Barbara  
Entity Address, State or Province CA  
Entity Address, Postal Zip Code 93117  
City Area Code 805  
Local Phone Number 562-3500  
Document Quarterly Report true  
Document Transition Report false  
v3.21.2
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Current assets:    
Cash and cash equivalents $ 66,127 $ 54,967
Accounts receivable, net of allowances of $1,833 and $1,047 at September 30, 2021 and December 31, 2020, respectively 26,453 19,771
Inventories, net 51,529 39,168
Prepaid expenses and other current assets 2,663 1,891
Current assets of discontinued operations 4 13,475
Total current assets 146,776 129,272
Property and equipment, net 14,886 12,301
Goodwill 9,202 9,202
Other intangible assets, net 8,471 9,387
Other assets 7,323 8,011
Non-current assets of discontinued operations   805
Total assets 186,658 168,978
Current liabilities:    
Current portion of long-term debt   4,670
Accounts payable 6,300 5,799
Accrued and other current liabilities 22,285 28,408
Customer deposits 30,286 17,905
Sales return liability 12,305 9,192
Current liabilities of discontinued operations 501 4,686
Total current liabilities 71,677 70,660
Long-term debt 61,483 60,500
Derivative liability   26,570
Deferred and contingent consideration 2,786 2,350
Warranty reserve and other long-term liabilities 9,950 9,455
Total liabilities 145,896 169,535
Commitments and contingencies (Note 12)
Stockholders’ equity (deficit):    
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 58,129,589 and 50,712,151 and outstanding 58,056,862 and 50,639,424 shares at September 30, 2021 and December 31, 2020, respectively 581 506
Additional paid-in capital 645,717 558,059
Treasury stock, at cost (72,727 shares at September 30, 2021 and December 31, 2020) (260) (260)
Accumulated deficit (605,276) (558,862)
Total stockholders’ equity (deficit) 40,762 (557)
Total liabilities and stockholders’ equity $ 186,658 $ 168,978
v3.21.2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Statement Of Financial Position [Abstract]    
Accounts receivable, allowances (in dollars) $ 1,833 $ 1,047
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 58,129,589 50,712,151
Common stock, shares outstanding 58,056,862 50,639,424
Treasury stock, shares 72,727 72,727
v3.21.2
Condensed Consolidated Statements of Operations - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Income Statement [Abstract]        
Net sales $ 19,620,000 $ 15,329,000 $ 58,035,000 $ 37,109,000
Cost of goods sold 9,030,000 7,105,000 26,027,000 15,887,000
Gross profit 10,590,000 8,224,000 32,008,000 21,222,000
Operating expenses:        
Sales and marketing 12,052,000 9,969,000 34,348,000 24,858,000
Research and development 2,367,000 1,778,000 6,962,000 6,142,000
General and administrative 7,865,000 6,445,000 23,321,000 21,183,000
Restructuring   (442,000)   389,000
Total operating expenses 22,284,000 17,750,000 64,631,000 52,572,000
Loss from operations (11,694,000) (9,526,000) (32,623,000) (31,350,000)
Other income (expense), net:        
Interest income 1,000 6,000 4,000 203,000
Interest expense (2,026,000) (2,055,000) (6,143,000) (7,284,000)
Change in fair value of derivative liability 35,550,000 10,090,000 (14,460,000) (8,420,000)
Other income (expense), net 6,672,000 (2,000) 6,575,000 34,000
Total other income (expense), net 40,197,000 8,039,000 (14,024,000) (15,467,000)
Income (loss) from continuing operations before income taxes 28,503,000 (1,487,000) (46,647,000) (46,817,000)
Income tax expense (benefit) 0 0 0 0
Income (loss) from continuing operations 28,503,000 (1,487,000) (46,647,000) (46,817,000)
Income (loss) from discontinued operations, net of income taxes (93,000) (4,334,000) 233,000 (21,893,000)
Net income (loss) $ 28,410,000 $ (5,821,000) $ (46,414,000) $ (68,710,000)
Basic earnings (loss) per share:        
Continuing operations $ 0.49 $ (0.03) $ (0.82) $ (0.93)
Discontinued operations 0.00 (0.09) 0.00 (0.44)
Basic earnings (loss) per share 0.49 (0.12) (0.82) (1.37)
Diluted earnings (loss) per share:        
Continuing operations (0.08) (0.03) (0.82) (0.93)
Discontinued operations 0.00 (0.09) 0.00 (0.44)
Diluted earnings (loss) per share $ (0.08) $ (0.12) $ (0.82) $ (1.37)
Weighted average outstanding common shares used for net income (loss) per share attributable to common stockholders:        
Basic 58,005,784 50,394,858 56,680,594 50,155,623
Diluted 72,639,930 50,394,858 56,680,594 50,155,623
v3.21.2
Condensed Consolidated Statement of Stockholders' Equity (Deficit) - USD ($)
$ in Thousands
Total
Follow-on Offering
ATM
Common stock
Common stock
Follow-on Offering
Common stock
ATM
Treasury stock
Additional paid-in capital
Additional paid-in capital
Follow-on Offering
Additional paid-in capital
ATM
Accumulated deficit
Balance, beginning of year at Dec. 31, 2019 $ 81,882     $ 495     $ (260) $ 550,562     $ (468,915)
Balance, beginning of year (in shares) at Dec. 31, 2019       49,612,907     72,727        
Issuance of/proceeds from common stock     $ 264     $ 1       $ 263  
Issuance of/proceeds from common stock (in shares)           37,000          
Stock-based compensation 2,000             2,000      
Employee stock purchase program (ESPP) 534     $ 1       533      
Employee stock purchase program (ESPP) (in shares)       113,615              
Vested restricted stock       $ 5       (5)      
Vested restricted stock (in shares)       472,914              
Shares withheld for tax obligations on vested RSUs (1,201)     $ (2)       (1,199)      
Shares withheld for tax obligations on vested RSUs, shares       (157,412)              
Net loss (28,612)                   (28,612)
Balance, end of year at Mar. 31, 2020 54,867     $ 500     $ (260) 552,154     (497,527)
Balance, end of year (in shares) at Mar. 31, 2020       50,079,024     72,727        
Balance, beginning of year at Dec. 31, 2019 81,882     $ 495     $ (260) 550,562     (468,915)
Balance, beginning of year (in shares) at Dec. 31, 2019       49,612,907     72,727        
Net loss (68,710)                    
Balance, end of year at Sep. 30, 2020 18,084     $ 504     $ (260) 555,465     (537,625)
Balance, end of year (in shares) at Sep. 30, 2020       50,507,635     72,727        
Balance, beginning of year at Mar. 31, 2020 54,867     $ 500     $ (260) 552,154     (497,527)
Balance, beginning of year (in shares) at Mar. 31, 2020       50,079,024     72,727        
Stock-based compensation 1,718             1,718      
Stock option exercises 13             13      
Stock option exercises (in shares)       5,454              
Employee stock purchase program (ESPP) (5)             (5)      
Employee stock purchase program (ESPP) (in shares)       (1,012)              
Vested restricted stock       $ 4       (4)      
Vested restricted stock (in shares)       363,795              
Shares withheld for tax obligations on vested RSUs (227)     $ (1)       (226)      
Shares withheld for tax obligations on vested RSUs, shares       (91,529)              
Net loss (34,277)                   (34,277)
Balance, end of year at Jun. 30, 2020 22,089     $ 503     $ (260) 553,650     (531,804)
Balance, end of year (in shares) at Jun. 30, 2020       50,355,732     72,727        
Stock-based compensation 1,574             1,574      
Stock option exercises 3             3      
Stock option exercises (in shares)       727              
Employee stock purchase program (ESPP) 307     $ 1       306      
Employee stock purchase program (ESPP) (in shares)       91,125              
Vested restricted stock       $ 1       (1)      
Vested restricted stock (in shares)       85,255              
Shares withheld for tax obligations on vested RSUs (68)     $ (1)       (67)      
Shares withheld for tax obligations on vested RSUs, shares       (25,204)              
Net loss (5,821)                   (5,821)
Balance, end of year at Sep. 30, 2020 18,084     $ 504     $ (260) 555,465     (537,625)
Balance, end of year (in shares) at Sep. 30, 2020       50,507,635     72,727        
Balance, beginning of year at Dec. 31, 2020 (557)     $ 506     $ (260) 558,059     (558,862)
Balance, beginning of year (in shares) at Dec. 31, 2020       50,712,151     72,727        
Issuance of/proceeds from common stock   $ 39,226     $ 62       $ 39,164    
Issuance of/proceeds from common stock (in shares)         6,222,222            
Stock-based compensation 3,163             3,163      
Stock option exercises 51             51      
Stock option exercises (in shares)       12,727              
Employee stock purchase program (ESPP) 323     $ 1       322      
Employee stock purchase program (ESPP) (in shares)       95,919              
Vested restricted stock 758     $ 6       752      
Vested restricted stock (in shares)       554,896              
Shares withheld for tax obligations on vested RSUs (1,215)     $ (1)       (1,214)      
Shares withheld for tax obligations on vested RSUs, shares       (82,830)              
Net loss (54,690)                   (54,690)
Balance, end of year at Mar. 31, 2021 (12,941)     $ 574     $ (260) 600,297     (613,552)
Balance, end of year (in shares) at Mar. 31, 2021       57,515,085     72,727        
Balance, beginning of year at Dec. 31, 2020 (557)     $ 506     $ (260) 558,059     (558,862)
Balance, beginning of year (in shares) at Dec. 31, 2020       50,712,151     72,727        
Net loss (46,414)                    
Balance, end of year at Sep. 30, 2021 40,762     $ 581     $ (260) 645,717     (605,276)
Balance, end of year (in shares) at Sep. 30, 2021       58,129,589     72,727        
Balance, beginning of year at Mar. 31, 2021 (12,941)     $ 574     $ (260) 600,297     (613,552)
Balance, beginning of year (in shares) at Mar. 31, 2021       57,515,085     72,727        
Stock-based compensation 2,584             2,584      
Stock option exercises 95     $ 1       94      
Stock option exercises (in shares)       23,636              
Vested restricted stock 247     $ 5       242      
Vested restricted stock (in shares)       471,759              
Shares withheld for tax obligations on vested RSUs (727)     $ (1)       (726)      
Shares withheld for tax obligations on vested RSUs, shares       (81,386)              
Net loss (20,134)                   (20,134)
Balance, end of year at Jun. 30, 2021 (30,876)     $ 579     $ (260) 602,491     (633,686)
Balance, end of year (in shares) at Jun. 30, 2021       57,929,094     72,727        
Stock-based compensation 2,326             2,326      
Employee stock purchase program (ESPP) 350     $ 1       349      
Employee stock purchase program (ESPP) (in shares)       103,152              
Vested restricted stock       $ 1       (1)      
Vested restricted stock (in shares)       148,098              
Shares withheld for tax obligations on vested RSUs (478)             (478)      
Shares withheld for tax obligations on vested RSUs, shares       (50,755)              
Reclassification of derivative liability to equity 41,030             41,030      
Net loss 28,410                   28,410
Balance, end of year at Sep. 30, 2021 $ 40,762     $ 581     $ (260) $ 645,717     $ (605,276)
Balance, end of year (in shares) at Sep. 30, 2021       58,129,589     72,727        
v3.21.2
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Cash flows from operating activities:    
Net loss $ (46,414) $ (68,710)
Income (loss) from discontinued operations, net of income taxes 233 (21,893)
Loss from continuing operations, net of income taxes (46,647) (46,817)
Adjustments to reconcile net loss to net cash used in operating activities    
Depreciation and amortization 3,149 2,386
Provision for doubtful accounts 875 258
Provision for warranties 684 362
Provision for inventory 638 1,435
Fair value adjustments to derivative liability 14,460 8,420
Fair value adjustments of other liabilities held at fair value 49 29
Amortization of debt discount and issuance costs 2,632 3,430
Gain on extinguishment of debt (6,652)  
Stock-based compensation expense 8,073 5,342
Payments of contingent consideration liability in excess of acquisition-date fair value (2,419)  
Other non-cash adjustments 584 198
Changes in operating assets and liabilities:    
Accounts receivable (7,558) (5,311)
Inventories (12,999) (6,569)
Prepaid expenses, other current assets and other assets (205) (166)
Accounts payable, accrueds, and other liabilities 1,279 (4,921)
Customer deposits 12,381 1,547
Sales return liability 3,113 1,930
Net cash flow from operating activities - continuing operations (28,563) (38,447)
Net cash flow from operating activities - discontinued operations (989) (14,292)
Net cash used in operating activities (29,552) (52,739)
Cash flows from investing activities:    
Purchase of property and equipment (4,882) (3,112)
Net cash flow from investing activities - continuing operations (4,882) (3,112)
Net cash flow from investing activities - discontinued operations 11,314 (80)
Net cash provided by (used in) investing activities 6,432 (3,192)
Cash flows from financing activities:    
Proceeds from issuance of common stock for employee stock-based plans 1,824 852
Net proceeds from issuance of common stock 39,226 264
Tax payments related to shares withheld for vested restricted stock units (RSUs) (2,420) (1,496)
Gross borrowings under the Term Loan 1,000  
Repayments under the Term Loan   (25,000)
Repayment of the Revolving Loan   (6,508)
Net proceeds from issuance of the Convertible Note   60,000
Payments of contingent consideration up to acquisition-date fair value (4,550)  
Deferred financing costs (800) (2,958)
Net cash provided by financing activities 34,280 31,806
Net increase (decrease) in cash, cash equivalents and restricted cash 11,160 (24,125)
Cash, cash equivalents and restricted cash at:    
Beginning of period 55,300 87,951
End of period 66,460 63,826
Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheets    
Cash and cash equivalents 66,127 63,483
Restricted cash included in other assets $ 333 $ 343
Restricted Cash, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other assets Other assets
End of period $ 66,460 $ 63,826
Supplemental disclosure of cash flow information:    
Interest paid 3,133 3,781
Supplemental disclosure of non-cash investing and financing activities:    
Property and equipment in accounts payable and accrued liabilities 323 114
Equity component of the Convertible Note $ 41,030  
Paycheck Protection Program    
Cash flows from financing activities:    
Gross borrowings under the PPP Loan   $ 6,652
v3.21.2
Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2021
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies

1.

Summary of Significant Accounting Policies

 

a.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Sientra, Inc. (“Sientra”, the “Company”, “we”, “our”, or “us”) in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 11, 2021, or the Annual Report. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period.

As a result of the miraDry Sale discussed in Note 2, the miraDry business met the criteria to be reported as discontinued operations. Therefore, the Company is reporting the historical results of miraDry, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein through the date of the Sale. Unless otherwise noted, the accompanying notes to the unaudited condensed consolidated financial statements have all been revised to reflect continuing operations only. As discussed in Note 11, following the Sale the Company has one operating segment in continuing operations named Plastic Surgery, formerly known as Breast Products.

 

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. The Company expects its operating expenses will remain consistent with the current period and 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 and the convertible note, sales of products since 2012, and the proceeds from the sale of common stock in public offerings. To fund ongoing operating and capital needs, the Company may need to raise additional capital in the future through the sale of equity securities and incremental debt financing.

Sale of the miraDry business

Refer to Note 2 for details on the sale of the miraDry business.

Debt financing – recent developments

Refer to Note 7 for a full description and updates to all of the Company’s long-term debt, revolving line of credit, convertible note, and Paycheck Protection Program (PPP) loan.

Equity financing – recent developments

On February 8, 2021, the Company completed a follow-on public offering of 5,410,628 shares of common stock at $6.75 per share, as well as 811,594 additional shares of common stock pursuant to the full exercise of the over-allotment option granted to the underwriters. Net proceeds were approximately $39.2 million after deducting

underwriting discounts and commissions of approximately $2.5 million and offering expenses of approximately $0.3 million.

As of September 30, 2021, the Company had cash and cash equivalents of $66.1 million. The accompanying condensed 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. The Company believes that its cash and cash equivalents will be sufficient to fund its operations for at least the next 12 months.

 

c.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

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 was permitted. The Company adopted the applicable amendments within ASU 2019-12 in the first quarter of 2021 and there was no material impact on its condensed consolidated financial statements from the adoption.

 

 

d.

Risks and Uncertainties

 

As an aesthetics company, surgical procedures involving the Company’s breast products are susceptible to local and national government restrictions, such as social distancing, vaccination requirements, “shelter in place” orders and business closures. The inability or limited ability to perform such non-emergency procedures significantly harmed the Company’s revenues since the second quarter of 2020 and continued to harm the Company’s revenues during the nine months ended September 30, 2021. While many states have lifted certain restrictions on non-emergency procedures, the Company will likely continue to experience future harm to its revenues while existing or new restrictions remain in place. It is not possible to accurately predict the length or severity of the COVID-19 pandemic or the timing for a broad and sustained ability to perform non-emergency procedures involving the Company’s products. The Company continues to monitor and assess new information related to the COVID-19 pandemic, the actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

 

Further, the spread of COVID-19 has caused the Company to modify workforce practices, and the Company may take further actions determined to be in the best interests of the Company’s employees or as required by governments. The continued spread of COVID-19, or another infectious disease, could also result in delays or disruptions in the Company’s supply chain or adversely affect the Company’s manufacturing facilities and personnel. Further, trade and/or national security protection policies may be adjusted as a result of the COVID-19 pandemic, such as actions by governments that limit, restrict or prevent the movement of certain goods into a country and/or region, and current U.S./China trade relations may be further exacerbated by the pandemic.

 

The estimates used for, but not limited to, determining the collectability of accounts receivable, fair value of long-lived assets and goodwill, and sales returns liability required could be impacted by the pandemic. While the full impact of COVID-19 is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained.

 

 

e.

Reclassifications

 

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.
v3.21.2
Discontinued Operations
 9 Months Ended
Sep. 30, 2021
Discontinued Operations And Disposal Groups [Abstract]  
Discontinued Operations

2.

Discontinued Operations

On June 10, 2021, the Company completed the sale of its miraDry business (the “Sale”) to miraDry Acquisition Company, Inc., a Delaware corporation (“Buyer”), an entity affiliated with 1315 Capital II, LP, as a result of the Company’s strategic decision to focus investment on its core Plastic Surgery segment. The Sale was made pursuant to the terms and conditions of the Asset Purchase Agreement (the “Purchase Agreement”), dated May 11, 2021, among the Company and certain of its subsidiaries, Buyer, and, solely for purposes of Section 8.14 of the Purchase Agreement, 1315 Capital II, LP. The aggregate purchase price was $10.0 million, which after certain adjustments for agreed upon changes in the estimated net asset value amount of purchased assets and assumed liabilities resulted in net cash proceeds of $11.3 million to the Company on the date of close. As of September 30, 2021, the Company has an escrow liability of $3.2 million in “Accrued and other current liabilities” on the condensed consolidated balance sheet to account for additional agreed upon post close changes in the net asset value and has recognized a loss on sale of $2.5 million. In October 2021, the Company finalized the transaction and paid $3.2 million to the Buyer in accordance with the agreed upon post close changes in the net asset value.

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

Under the TSA, the Company provides certain post-closing services to the Buyer related to the miraDry business for a period of up to six months, including accounting, accounts receivable support, customer service, IT, regulatory, quality assurance, and clinical support. As consideration for these services, the Buyer will reimburse the Company for direct and certain indirect costs, as well as certain overhead or administrative expenses related to operating the business. The Company recognized $0.1 million of TSA fees and cost reimbursements in operating expenses from continuing operations in the condensed consolidated statement of operations for the nine months ended September 30, 2021. As of September 30, 2021, the Company has received $0.3 million relating to the TSA services and has recorded a receivable of $0.1 million within other current assets in the condensed consolidated balance sheets. In connection with the accounts receivable support under the TSA, the Company received $2.3 million in customer payments and remitted $2.2 million to the Buyer during the period from June 10, 2021 through September 30, 2021. As of September 30, 2021, the Company has recorded a $0.1 million payable in accounts payable on the condensed consolidated balance sheets.

Additionally, the Company and the Buyer entered into a sublease agreement whereby the Buyer will sublease the miraDry office space in Santa Clara, CA. The sublease term is for an initial period of six months, with subsequent option periods for up to a total of twenty four months. During the three and nine months ended September 30, 2021, the Company recognized $0.2 million and $0.3 million, respectively, of sublease income in general and administrative expenses in the condensed consolidated statements of operations.

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets of discontinued operations:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

$

—

 

 

$

3,732

 

Inventories, net

 

 

—

 

 

 

9,480

 

Prepaid expenses and other current assets

 

 

4

 

 

 

263

 

Current assets of discontinued operations

 

 

4

 

 

 

13,475

 

Property and equipment, net

 

 

—

 

 

 

805

 

Total assets of discontinued operations

 

$

4

 

 

$

14,280

 

Liabilities of discontinued operations:

 

 

 

 

 

 

 

 

Accounts payable

 

$

6

 

 

$

704

 

Accrued and other current liabilities

 

 

495

 

 

 

3,982

 

Total liabilities of discontinued operations

 

$

501

 

 

$

4,686

 

 

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

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales

 

$

—

 

 

$

3,888

 

 

$

9,347

 

 

$

11,488

 

Cost of goods sold

 

 

—

 

 

 

1,286

 

 

 

4,805

 

 

 

4,846

 

Gross profit

 

 

—

 

 

 

2,602

 

 

 

4,542

 

 

 

6,642

 

Operating expenses

 

 

57

 

 

 

7,034

 

 

 

1,744

 

 

 

28,571

 

Income (loss) from operations of discontinued operations

 

 

(57

)

 

 

(4,432

)

 

 

2,798

 

 

 

(21,929

)

Other income (expense), net

 

 

—

 

 

 

98

 

 

 

(77

)

 

 

36

 

Income (loss) from discontinued operations before income taxes

 

 

(57

)

 

 

(4,334

)

 

 

2,721

 

 

 

(21,893

)

Loss on sale of discontinued operations before income taxes

 

 

(36

)

 

 

—

 

 

 

(2,488

)

 

 

—

 

Total income (loss) from discontinued operations before income taxes

 

 

(93

)

 

 

(4,334

)

 

 

233

 

 

 

(21,893

)

Income tax expense (benefit)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income (loss) from discontinued operations, net of income taxes

 

$

(93

)

 

$

(4,334

)

 

$

233

 

 

$

(21,893

)

 

The results of the miraDry business, including the results of operations, cashflows, and related assets and liabilities are reported as discontinued operations for all periods presented herein.
v3.21.2
Revenue
 9 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Revenue

3.

Revenue

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

Revenue contracts may include multiple products or services, each of which is considered a separate performance obligation. Performance obligations typically include the delivery of promised products, such as breast implants,

tissue expanders, and BIOCORNEUM, along with service-type warranties. Other deliverables are sometimes promised but are ancillary and insignificant in the context of the contract as a whole. Revenue is allocated to each performance obligation based on its relative standalone selling price. The Company determines standalone selling prices based on observable prices for all performance obligations with the exception of the service-type warranty under the Platinum20 Limited Warranty Program, or Platinum20, which is based on the expected cost plus margin approach. 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 September 30, 2021 were as follows:

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

Balance as of December 31, 2020

 

$

1,945

 

Additions and adjustments

 

 

1,379

 

Revenue recognized

 

 

(411

)

Balance as of September 30, 2021

 

$

2,913

 

 

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

 

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

Sales Return Liability

 

With the exception of the Company’s BIOCORNEUM scar management products, the Company allows for the return of products from customers within six months after the original sale, which is accounted for as variable consideration. A sales return liability is established based on estimated returns using relevant historical experience taking into consideration recent gross sales and notifications of pending returns, as adjusted for changes in recent industry events and trends. 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 following table provides a rollforward of the sales return liability (in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Beginning balance

 

$

9,192

 

 

$

8,116

 

Addition to reserve for sales activity

 

 

115,374

 

 

 

84,119

 

Actual returns

 

 

(110,996

)

 

 

(82,110

)

Change in estimate of sales returns

 

 

(1,265

)

 

 

(46

)

Ending balance

 

$

12,305

 

 

$

10,079

 

 

 
v3.21.2
Fair Value of Financial Instruments
 9 Months Ended
Sep. 30, 2021
Financial Instruments Owned At Fair Value [Abstract]  
Fair Value of Financial Instruments

4.

Fair Value of Financial Instruments

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, customer deposits and sales return liability are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the common stock warrant liability, contingent consideration, and the convertible feature related to the convertible note are discussed in Note 5. 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. As of September 30, 2021, the carrying value of the long-term debt was not materially different from the fair value. As of September 30, 2021, the carrying value and fair value of the convertible note were as follows (in thousands):

 

 

 

September 30, 2021

 

 

 

Carrying Value

 

 

Fair Value

 

Convertible note

 

$

46,657

 

 

$

42,330

 

 
v3.21.2
Balance Sheet Components
 9 Months Ended
Sep. 30, 2021
Balance Sheet Related Disclosures [Abstract]  
Balance Sheet Components

5.

Balance Sheet Components

 

a.

Inventories

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Raw materials

 

$

2,669

 

 

$

3,788

 

Work in progress

 

 

4,325

 

 

 

10,710

 

Finished goods

 

 

40,278

 

 

 

21,254

 

Finished goods - right of return

 

 

4,257

 

 

 

3,416

 

 

 

$

51,529

 

 

$

39,168

 

 

 

b.

Property and Equipment

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Leasehold improvements

 

$

2,605

 

 

$

2,523

 

Manufacturing equipment and toolings

 

 

9,832

 

 

 

8,529

 

Computer equipment

 

 

1,637

 

 

 

2,522

 

Software

 

 

6,581

 

 

 

3,010

 

Furniture and fixtures

 

 

1,542

 

 

 

1,040

 

 

 

 

22,197

 

 

 

17,624

 

Less accumulated depreciation

 

 

(7,311

)

 

 

(5,323

)

 

 

$

14,886

 

 

$

12,301

 

 

Depreciation expense for the three months ended September 30, 2021 and 2020 was $0.7 million and $0.9 million, respectively. Depreciation expense for the nine months ended September 30, 2021 and 2020 was $2.2 million and $1.4 million, respectively.

 

 

c.

Goodwill and Other Intangible Assets, net

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

The carrying amount of goodwill as of September 30, 2021 and December 31, 2020 were as follows (in thousands):

 

 

 

Plastic Surgery

 

 

miraDry

 

 

Total

 

Balances as of December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

23,480

 

 

 

7,629

 

 

 

31,109

 

Accumulated impairment losses

 

 

(14,278

)

 

 

(7,629

)

 

 

(21,907

)

Goodwill, net

 

$

9,202

 

 

$

—

 

 

$

9,202

 

Balances as of September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

23,480

 

 

 

7,629

 

 

 

31,109

 

Accumulated impairment losses

 

 

(14,278

)

 

 

(7,629

)

 

 

(21,907

)

Goodwill, net

 

$

9,202

 

 

$

—

 

 

$

9,202

 

 

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

 

 

 

Average

 

 

 

 

 

 

Amortization

 

 

September 30, 2021

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(4,132

)

 

$

808

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(372

)

 

 

428

 

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

 

 

 

(1,455

)

 

 

6,785

 

Total definite-lived intangible assets

 

 

 

 

 

$

16,443

 

 

$

(8,422

)

 

$

8,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names - indefinite life

 

—

 

 

 

450

 

 

 

—

 

 

 

450

 

Total indefinite-lived intangible assets

 

 

 

 

 

$

450

 

 

$

—

 

 

$

450

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

 

December 31, 2020

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(3,856

)

 

$

1,084

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(322

)

 

 

478

 

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

 

 

 

(865

)

 

 

7,375

 

Total definite-lived intangible assets

 

 

 

 

 

$

16,443

 

 

$

(7,506

)

 

$

8,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names - indefinite life

 

—

 

 

 

450

 

 

 

—

 

 

 

450

 

Total indefinite-lived intangible assets

 

 

 

 

 

$

450

 

 

$

—

 

 

$

450

 

 

 

Amortization expense for both the three months ended September 30, 2021 and 2020 were $0.3 million. Amortization expense for the nine months ended September 30, 2021 and 2020 was $0.9 million and $1.0 million, respectively. The following table summarizes the future estimated amortization expense relating to the Company's definite-lived intangible assets as of September 30, 2021 (in thousands):

 

 

 

Amortization

 

Period

 

Expense

 

2021

 

$

305

 

2022

 

 

1,163

 

2023

 

 

1,092

 

2024

 

 

948

 

2025

 

 

805

 

Thereafter

 

 

3,708

 

 

 

$

8,021

 

 

 

d.

Accrued and Other Current Liabilities

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Payroll and related expenses

 

$

4,389

 

 

$

3,003

 

Accrued severance

 

 

452

 

 

 

2,900

 

Accrued commissions

 

 

3,494

 

 

 

4,734

 

Accrued manufacturing

 

 

252

 

 

 

225

 

Deferred and contingent consideration, current portion

 

 

3,195

 

 

 

10,146

 

Audit, consulting and legal fees

 

 

—

 

 

 

48

 

Accrued sales and marketing expenses

 

 

96

 

 

 

300

 

Lease liabilities

 

 

1,618

 

 

 

1,588

 

Other

 

 

8,789

 

 

 

5,464

 

 

 

$

22,285

 

 

$

28,408

 

 

 

e.

Accrued warranties

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

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Balance as of January 1

 

$

1,934

 

 

$

1,397

 

Warranty costs incurred during the period

 

 

(270

)

 

 

(83

)

Changes in accrual related to warranties issued during the period

 

 

673

 

 

 

367

 

Changes in accrual related to pre-existing warranties

 

 

11

 

 

 

(5

)

Balance as of September 30

 

$

2,348

 

 

$

1,676

 

 

As of September 30, 2021 and 2020, both balances are included in “Warranty reserve and other long-term liabilities”.

 

 

f.

Liabilities measured at fair value

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date.

Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs.

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

 

•

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

 

•

Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

 

•

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

Common stock warrants

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. As of the current period ended September 30, 2021, all warrants have expired.

Contingent consideration

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. The contingent consideration related to the acquisition of BIOCORNEUM consist of royalty obligations based on future net sales for a defined term, beginning in 2024. The significant assumption utilized in the fair value measurement was the revenue discount rate, which was 21.0%. The contingent consideration for milestone payments related to the acquisition of miraDry was based on the timing of achievement of target net sales, which is estimated based on an internal management forecast. The significant assumption utilized in the fair value measurement was the miraDry company discount rate, which was 11.2%. As these inputs are not observable, the overall fair value measurement of the contingent consideration is classified as Level 3. As of September 30, 2021, the remaining liability for the miraDry contingent consideration was approximately $31,000.

Derivative liability

Prior to the amendment, the Company assessed on a quarterly basis the fair value of the derivative liability associated with the conversion feature in the convertible note due in 2025. The conversion feature was initially bifurcated and recorded as a derivative liability on the condensed consolidated balance sheets with a corresponding discount at the date of issuance that netted against the principal amount of the note. The Company utilized a binomial lattice method to determine the fair value of the conversion feature, which utilized inputs including the common stock price, volatility of common stock, the risk-free interest rate and the probability of conversion to common shares at the Base Conversion Rate in the event of a major transaction (e.g. a change in control). As the

probability of conversion is a significant unobservable input, the overall fair value measurement of the conversion feature was classified as Level 3. As a result of the amendment, the conversion feature met the criteria for equity classification and has been reclassified to “Additional paid in capital” on the condensed consolidated balance sheet.  

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 and indicate the level of the fair value hierarchy utilized to determine such fair value (in thousands):

 

 

 

Fair Value Measurements as of

 

 

 

September 30, 2021 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

106

 

 

$

106

 

 

 

$

—

 

 

$

—

 

 

$

106

 

 

$

106

 

 

 

 

Fair Value Measurements as of

 

 

 

December 31, 2020 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

7,026

 

 

$

7,026

 

Liability for derivative

 

 

—

 

 

 

—

 

 

 

26,570

 

 

 

26,570

 

 

 

$

—

 

 

$

—

 

 

$

33,596

 

 

$

33,596

 

 

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

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration liability

 

 

Derivative liability

 

Balance, December 31, 2020

 

$

7,026

 

 

$

26,570

 

Change in fair value

 

 

49

 

 

 

14,460

 

Settlements

 

 

(6,969

)

 

 

—

 

Reclassification to equity

 

 

—

 

 

 

(41,030

)

Balance, September 30, 2021

 

$

106

 

 

$

—

 

 

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

The Company recognized changes in the fair value of the derivative liability in “Change in fair value of derivative liability” in the condensed consolidated statement of operations and changes in the contingent consideration are recognized in “General and administrative” expense in the condensed consolidated statement of operations.
v3.21.2
Leases
 9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Leases

6.

Leases

 

Components of lease expense were as follows:

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

Lease Cost

 

Classification

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating lease cost

 

Operating expenses

 

$

405

 

 

$

428

 

 

$

1,239

 

 

$

1,270

 

Operating lease cost

 

Inventory

 

 

154

 

 

 

131

 

 

 

377

 

 

 

364

 

Sublease income

 

Operating expenses

 

 

(233

)

 

 

—

 

 

 

(301

)

 

 

—

 

Total operating lease cost

 

 

 

$

326

 

 

$

559

 

 

$

1,315

 

 

$

1,634

 

Finance lease cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

Operating expenses

 

 

8

 

 

 

10

 

 

 

26

 

 

 

31

 

Amortization of right-of-use assets

 

Inventory

 

 

12

 

 

 

12

 

 

 

35

 

 

 

24

 

Interest on lease liabilities

 

Other income (expense), net

 

 

2

 

 

 

3

 

 

 

6

 

 

 

7

 

Total finance lease cost

 

 

 

$

22

 

 

$

25

 

 

$

67

 

 

$

62

 

Total lease cost

 

 

 

$

348

 

 

$

584

 

 

$

1,382

 

 

$

1,696

 

 

As mentioned above in Note 2, as part of the sale of the miraDry business the Company entered into a sublease agreement whereby the Buyer will sublease the miraDry office space in Santa Clara, CA. The initial sublease term is for six months, with subsequent option periods for up to a total of twenty four months. During the initial term of six months, the Company expects cash receipts of approximately $0.5 million.

 

Short-term lease expense for the three and nine months ended September 30, 2021 and 2020 was not material.

 

Supplemental cash flow information related to operating and finance leases for the nine months ended September 30, 2021 was as follows (in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

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

 

 

 

 

 

 

 

 

Operating cash outflows from operating leases

 

$

1,261

 

 

$

1,337

 

Operating cash outflows from finance leases

 

 

56

 

 

 

61

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

 

 

Operating leases

 

$

572

 

 

$

1,242

 

Finance leases

 

 

—

 

 

 

157

 

 

 

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Reported as:

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

$

6,524

 

 

$

7,176

 

Finance lease right-of-use assets

 

 

97

 

 

 

158

 

Total right-of use assets

 

$

6,621

 

 

$

7,334

 

Accrued and other current liabilities

 

 

 

 

 

 

 

 

Operating lease liabilities

 

$

1,543

 

 

$

1,504

 

Finance lease liabilities

 

 

75

 

 

 

84

 

Warranty reserve and other long-term liabilities

 

 

 

 

 

 

 

 

Operating lease liabilities

 

 

5,315

 

 

 

5,946

 

Finance lease liabilities

 

 

41

 

 

 

77

 

Total lease liabilities

 

$

6,974

 

 

$

7,611

 

Weighted average remaining lease term (years)

 

 

 

 

 

 

 

 

Operating leases

 

 

4

 

 

 

5

 

Finance leases

 

 

2

 

 

 

2

 

Weighted average discount rate

 

 

 

 

 

 

 

 

Operating leases

 

 

8.09

%

 

 

7.75

%

Finance leases

 

 

6.48

%

 

 

6.15

%

 

As of September 30, 2021, maturities of the Company’s operating and finance lease liabilities are as follows (in thousands):

 

Period

 

Operating leases

 

 

Finance leases

 

 

Total

 

Remainder of 2021

 

$

564

 

 

$

27

 

 

$

591

 

2022

 

 

2,035

 

 

 

58

 

 

 

2,093

 

2023

 

 

2,085

 

 

 

33

 

 

 

2,118

 

2024

 

 

1,629

 

 

 

4

 

 

 

1,633

 

2025

 

 

704

 

 

 

—

 

 

 

704

 

2026 and thereafter

 

 

1,221

 

 

 

—

 

 

 

1,221

 

Total lease payments

 

$

8,238

 

 

$

122

 

 

$

8,360

 

Less imputed interest

 

 

1,380

 

 

 

6

 

 

 

1,386

 

Total lease liabilities

 

$

6,858

 

 

$

116

 

 

$

6,974

 

 

 

 
v3.21.2
Debt
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Debt

7.

Debt

 

On February 5, 2021, the Company entered into a Second Amended and Restated Credit and Security Agreement (Term Loan), by and among the Company, certain of the Company’s subsidiaries, the lenders party thereto from time to time and MidCap Financial Trust, as administrative agent and collateral agent (“Agent”) (the “Restated Term Loan Agreement”). The Restated Term Loan Agreement amends and restates the Company’s existing Amended and Restated Credit and Security Agreement, dated as of July 1, 2019. Pursuant to the Restated Term Loan Agreement, tranche 3 commitments were reduced from $15 million to $1 million and were advanced on the effective date of the Restated Term Loan Agreement and the remaining unfunded tranche of $15 million was revised to two $5 million tranche commitments, with tranche 4 availability commencing on July 1, 2021 and tranche 5 availability commencing July 1, 2022. The parties agreed to extend the last day of the interest only period for all tranches from July 31, 2021 in the Existing Term Loan Agreement to December 31, 2022 in the Restated Term Loan Agreement. The Restated Term Loan Agreement contains certain minimum net revenue requirements based on the Company’s 12-month trailing net revenue, as well as certain minimum unrestricted cash requirements that increase upon the funding of the tranche 4 and tranche 5 loans. The exit fee was modified to apply only to the amount of any tranche 4 and 5 loans advanced. Finally, in connection with the Restated Term Loan Agreement, the Company agreed to pay an amendment fee of $750,000.

 

As of September 30, 2021, there was $16.0 million of outstanding principal related to the term loans and $1.2 million of unamortized debt issuance costs which are included in “Long-term debt” on the condensed consolidated balance sheets.

 

Also on February 5, 2021, the Company entered into a Third Amendment to the Amended and Restated Credit and Security Agreement (Revolving Loan), by and among the Company, the lenders party thereto from time to time, and the Agent (the “Revolving Loan Amendment”). The Revolving Loan Amendment modified the net revenue requirement in a manner consistent with the modification under the Restated Term Loan Agreement. In addition, the Revolving Loan Amendment made other conforming changes to the Restated Term Loan Agreement.

 

As of September 30, 2021, there were no borrowings outstanding under the Revolving Loan. As of September 30, 2021, the unamortized debt issuance costs related to the revolving loan was approximately $0.1 million and was included in “Other assets” on the condensed consolidated balance sheets.

 

The amortization of debt issuance costs on the term loan and the revolving loan for the three months ended September 30, 2021 and 2020 were $0.1 million and $0.2 million, respectively. The amortization of debt issuance costs on the term loan and revolving loan for the nine months ended September 30, 2021 and 2020 was $0.4 million and $0.7 million, respectively, and was included in interest expense in the condensed 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.

 

Convertible Note

 

On September 28, 2021, the Company entered into a First Amendment (the “Amendment”) to Facility Agreement (the “Agreement”) with Deerfield Partners, L.P., as agent and lender (“Deerfield”). The Amendment provides for, among other things, the ability, at the sole option of Deerfield, to issue unregistered shares of the Company’s common stock upon the conversion of the Convertible Note (as defined in the Agreement). In addition, the Amendment provides that, in the event of a Major Transaction (as defined in the Convertible Note), no additional

shares of the Company’s common stock shall be issued if the Share Price Result (as defined in the Convertible Note) is greater than $30.00 per share or less than $1.50 per share.

 

Prior to the amendment, the conversion features in the outstanding convertible debt instrument were accounted for as a free-standing embedded derivative bifurcated from the principal balance of the Note, as (1) the conversion features were not clearly and closely related to the debt instrument and were not considered to be indexed to the Company’s equity, (2) the conversion features standing alone meet the definition of a derivative, and (3) the Note is not remeasured at fair value each reporting period with changes in fair value recorded in the condensed consolidated statement of operations.

 

As a result of the amendment, the conversion feature no longer needed to be accounted for as a free-standing embedded derivative as it met the criteria for equity classification. As of the amendment date, the derivative liability was adjusted to a fair value of $41.0 million and has been reclassified to “Additional paid in capital” on the condensed consolidated balance sheet.

 

As of September 30, 2021, the unamortized debt discount and issuance costs were $13.3 million and included in “Long-term debt” on the condensed consolidated balance sheet. The Company will amortize the debt discount and debt issuance costs to interest expense under the effective interest method over the term of the Note, at a resulting effective interest rate of approximately 12%. For the three months ended September 30, 2021 and 2020, the amortization of the convertible debt discount and issuance costs were $0.8 million and $0.7 million, respectively. For the nine months ended September 30, 2021 and 2020, the amortization of the convertible debt discount and issuance costs were $2.2 million and $1.5 million, respectively. Both were included in interest expense in the condensed consolidated statements of operations.

 

CARES Act

 

On July 30, 2021, the Company was notified by Silicon Valley Bank that they received payment in full from the Small Business Administration for the amount of the Company's PPP Loan and the Company's PPP Loan had been fully forgiven. For the quarter ended September 30, 2021, the Company recorded a gain on extinguishment of the PPP Loan of $6.7 million in “Other income (expense), net” within the condensed consolidated statement of operations.

 

Future Principal Payments of Debt

 

The future schedule of principal payments for all outstanding debt as of September 30, 2021 was as follows (in thousands):

 

Fiscal Year

 

 

 

 

Remainder of 2021

 

$

—

 

2022

 

 

—

 

2023

 

 

10,105

 

2024

 

 

5,895

 

2025

 

 

60,000

 

Total

 

$

76,000

 

 
v3.21.2
Stockholders' Equity
 9 Months Ended
Sep. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Stockholders' Equity

8.

Stockholders’ Equity

 

a.

Authorized Stock

The Company’s Amended and Restated Certificate of Incorporation authorizes the Company to issue 210,000,000 shares of common and preferred stock, consisting of 200,000,000 shares of common stock with $0.01 par value and 10,000,000 shares of preferred stock with $0.01 par value. As of September 30, 2021 and December 31, 2020, 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 an 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 loans amounts, or the Original Warrants, 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. The warrants within Tranche A expired on January 17, 2020, the warrants within Tranche B expired on August 1, 2020, the warrants within Tranche C expired on December 13, 2020, and the warrants within Tranche D expired on June 30, 2021. As of September 30, 2021, there were no warrants outstanding.

 

c.

Stock Option Plans

As of September 30, 2021, a total of 1,860,554 shares of the Company’s common stock were available for issuance under the 2014 Plan. As of September 30, 2021, inducement grants for 1,904,425 shares of common stock have been awarded, and 638,710 shares of common stock were available 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 not be 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. Additionally, options have been granted to certain key executives that vest upon achievement of performance conditions based on performance targets as defined by the board of directors, which have included net sales targets and defined corporate objectives over the performance period with possible payout ranging from 0% to 100% of the target award. Compensation expense is recognized on a straight-lined basis over the vesting term of one year based upon the probable performance target that will be met. The vesting provisions of individual options may vary but provide for vesting of at least 25% per year.

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

 

 

 

 

 

 

 

Weighted

 

 

Weighted

average

 

 

 

 

 

 

 

average

 

 

remaining

 

 

 

Option

 

 

exercise

 

 

contractual

 

 

 

Shares

 

 

price

 

 

term (year)

 

Balances at December 31, 2020

 

 

1,959,501

 

 

$

4.79

 

 

 

5.92

 

Exercised

 

 

(36,363

)

 

 

3.99

 

 

 

 

 

Forfeited

 

 

(138,859

)

 

 

5.15

 

 

 

 

 

Balances at September 30, 2021

 

 

1,784,279

 

 

$

4.78

 

 

 

5.50

 

 

 

For stock-based awards the Company recognizes compensation expense based on the grant date fair value using the Black-Scholes option valuation model. Stock-based compensation expense related to stock options for the three and nine months ended September 30, 2021 were $0.1 million and $0.4 million, respectively. There was no stock-based compensation expense related to stock options for the three and nine months ended September 30, 2020. As of September 30, 2021, unrecognized compensation costs related to stock options was $1.7 million.

 

d.

Restricted Stock Units

The Company has issued restricted stock unit awards, or RSUs, under the 2014 Plan and the Inducement Plan. The RSUs issued to employees generally vest on a straight-line basis annually over a 3-year requisite service period. RSUs issued to non-employees generally vest either monthly or annually over the service term. In 2020, the Company implemented a sell-to-cover program for employees who elect to sell shares to cover any withholding taxes due upon vesting. For employees who do not elect to sell shares to cover withholding taxes, the Company nets shares upon vesting and pays the withholding taxes directly.

Activity related to RSUs is set forth below:

 

 

 

 

 

 

 

Weighted

average

 

 

 

Number

 

 

grant date

 

 

 

of shares

 

 

fair value

 

Balances at December 31, 2020

 

 

3,093,790

 

 

$

6.97

 

Granted

 

 

1,597,983

 

 

 

7.38

 

Vested

 

 

(1,174,753

)

 

 

6.99

 

Forfeited

 

 

(392,728

)

 

 

6.98

 

Balances at September 30, 2021

 

 

3,124,292

 

 

$

7.17

 

 

Stock-based compensation expense for RSUs for the three months ended September 30, 2021 and 2020 was $2.1 million and $1.5 million, respectively. Stock-based compensation expense for RSUs for the nine months ended September 30, 2021 and 2020 was $7.3 million and $4.9 million, respectively. As of September 30, 2021, there was $11.1 million of total unrecognized compensation costs related to non-vested RSU awards. The cost is expected to be recognized over a weighted average period of approximately 2.05 years.

 

e.

Employee Stock Purchase Plan

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

During the nine months ended September 30, 2021, employees purchased 199,071 shares of common stock at a weighted average price of $3.38 per share. As of September 30, 2021, the number of shares of common stock available for future issuance was 1,253,615.

The Company estimated the fair value of employee stock purchase rights using the Black-Scholes model. Stock-based compensation expense related to the ESPP was $0.1 million for both the three months ended September 30, 2021 and 2020. Stock-based compensation expense related to the ESPP was $0.4 million for both the nine months ended September 30, 2021 and 2020.

 

f.

Significant Modifications

During the nine months ended September 30, 2021 and 2020, there were no material modifications of equity awards.

v3.21.2
Earnings (Loss) Per Share
 9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Earnings (Loss) Per Share

9.

Earnings (Loss) Per Share

Basic earnings (loss) per share is calculated by dividing the income (loss) from continuing and discontinued operations by the weighted average outstanding common shares for basic EPS for the period. Diluted EPS includes the potential dilution of common stock equivalent shares that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Numerator for continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations used in computing basic earnings (loss) per share

 

$

28,503

 

 

$

(1,487

)

 

$

(46,647

)

 

$

(46,817

)

Convertible note interest expense

 

 

1,392

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value adjustments to the derivative liability

 

 

(35,550

)

 

 

-

 

 

 

-

 

 

 

-

 

Losses from continuing operations used in computing diluted loss per share

 

$

(5,655

)

 

$

(1,487

)

 

$

(46,647

)

 

$

(46,817

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator for discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of income taxes

 

 

(93

)

 

 

(4,334

)

 

 

233

 

 

 

(21,893

)

Income (loss) from discontinued operations used in computing basic and diluted earnings (loss) per share

 

$

(93

)

 

$

(4,334

)

 

$

233

 

 

$

(21,893

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator for losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) used in computing basic earnings (loss) per share

 

$

28,410

 

 

$

(5,821

)

 

$

(46,414

)

 

$

(68,710

)

Net loss used in computing diluted loss per share

 

$

(5,748

)

 

$

(5,821

)

 

$

(46,414

)

 

$

(68,710

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding common shares for basic earnings (loss) per share

 

 

58,005,784

 

 

 

50,394,858

 

 

 

56,680,594

 

 

 

50,155,623

 

Dilutive effect of the convertible note

 

 

14,634,146

 

 

 

-

 

 

 

-

 

 

 

-

 

Weighted average outstanding common shares for diluted loss per share

 

 

72,639,930

 

 

 

50,394,858

 

 

 

56,680,594

 

 

 

50,155,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.49

 

 

$

(0.03

)

 

$

(0.82

)

 

$

(0.93

)

Discontinued operations

 

$

(0.00

)

 

$

(0.09

)

 

$

0.00

 

 

$

(0.44

)

Basic earnings (loss) per share

 

$

0.49

 

 

$

(0.12

)

 

$

(0.82

)

 

$

(1.37

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.08

)

 

$

(0.03

)

 

$

(0.82

)

 

$

(0.93

)

Discontinued operations

 

$

(0.00

)

 

$

(0.09

)

 

$

0.00

 

 

$

(0.44

)

Diluted earnings (loss) per share

 

$

(0.08

)

 

$

(0.12

)

 

$

(0.82

)

 

$

(1.37

)

 

The potentially dilutive impact from stock options and RSUs is calculated under the treasury stock method. Under this method, proceeds based on the exercise price and unearned compensation are assumed to be used to repurchase shares on the open market at the average market price for the period, reducing the number of potential new shares to be issued and sometimes causing an antidilutive effect. The potentially dilutive impact from the Convertible Note is calculated under the if-converted method until the conversion date. After the conversion date, the converted shares are included in weighted-average common shares outstanding for basic EPS.

 

The Company excluded the following potentially dilutive securities, outstanding for the three and nine months ended September 30, 2021 and 2020, from the computation of diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2021 and 2020 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Stock issuable upon conversion of convertible note

 

 

—

 

 

 

14,634,146

 

 

 

14,634,146

 

 

 

11,002,710

 

Stock options to purchase common stock

 

 

1,582,901

 

 

 

34,308

 

 

 

1,629,493

 

 

 

862,278

 

Unvested RSUs

 

 

2,322,816

 

 

 

1,445,486

 

 

 

2,049,832

 

 

 

1,531,084

 

 

 

 

3,905,717

 

 

 

16,113,940

 

 

 

18,313,471

 

 

 

13,396,072

 

 
v3.21.2
Income Taxes
 9 Months Ended
Sep. 30, 2021
Income Tax Disclosure [Abstract]  
Income Taxes

10.

Income Taxes

The Company operates in several tax jurisdictions and is subject to taxes in each jurisdiction in which it conducts business. To date, the Company has incurred cumulative net losses and maintains a full valuation allowance on its net deferred tax assets due to the uncertainty surrounding realization of such assets. The Company had no tax expense for both the three and nine months ended September 30, 2021 and 2020.

v3.21.2
Segment Information
 9 Months Ended
Sep. 30, 2021
Segment Reporting [Abstract]  
Segment Information

11.

Segment Information

 

Following the sale of the miraDry business on June 10, 2021, the Company has one reportable segment named Plastic Surgery, formally known as Breast Products. The Plastic Surgery segment focuses on sales of silicone gel breast implants, tissue expanders and scar management products under the brands Sientra Round, Sientra Teardrop, AlloX2, Dermaspan, Softspan and BIOCORNEUM.

 

The net sales, net operating loss and net assets for the Plastic Surgery segment are presented in the condensed consolidated statement of operations and condensed consolidated balance sheets as continuing operations.

 
v3.21.2
Commitments and Contingencies
 9 Months Ended
Sep. 30, 2021
Commitments And Contingencies Disclosure [Abstract]  
Commitments and Contingencies

12.

Commitments and Contingencies

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

Product Liability Litigation

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

On September 23, 2020, a lawsuit was filed in the Eastern District of Tennessee against the Company. The lawsuit alleges that the Company’s textured breast implants caused certain of the plaintiffs to develop a condition known as breast implant associated anaplastic large cell lymphoma (“BIA-ALCL”), and that the Company is liable to the plaintiffs based on claims for negligence, strict liability (manufacturing defects), strict liability (failure to warn), breach of express and implied warranties, and punitive damages. The Company filed a motion to dismiss the complaint on December 7, 2020. Briefing on the motion is complete and oral argument is presently scheduled for January 2022. 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.
v3.21.2
Summary of Significant Accounting Policies (Policies)
 9 Months Ended
Sep. 30, 2021
Accounting Policies [Abstract]  
Basis of Presentation

 

a.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Sientra, Inc. (“Sientra”, the “Company”, “we”, “our”, or “us”) in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC. Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting. The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 11, 2021, or the Annual Report. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of results to be expected for the year ending December 31, 2021, any other interim periods, or any future year or period.

As a result of the miraDry Sale discussed in Note 2, the miraDry business met the criteria to be reported as discontinued operations. Therefore, the Company is reporting the historical results of miraDry, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein through the date of the Sale. Unless otherwise noted, the accompanying notes to the unaudited condensed consolidated financial statements have all been revised to reflect continuing operations only. As discussed in Note 11, following the Sale the Company has one operating segment in continuing operations named Plastic Surgery, formerly known as Breast Products.

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. The Company expects its operating expenses will remain consistent with the current period and 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 and the convertible note, sales of products since 2012, and the proceeds from the sale of common stock in public offerings. To fund ongoing operating and capital needs, the Company may need to raise additional capital in the future through the sale of equity securities and incremental debt financing.

Sale of the miraDry business

Refer to Note 2 for details on the sale of the miraDry business.

Debt financing – recent developments

Refer to Note 7 for a full description and updates to all of the Company’s long-term debt, revolving line of credit, convertible note, and Paycheck Protection Program (PPP) loan.

Equity financing – recent developments

On February 8, 2021, the Company completed a follow-on public offering of 5,410,628 shares of common stock at $6.75 per share, as well as 811,594 additional shares of common stock pursuant to the full exercise of the over-allotment option granted to the underwriters. Net proceeds were approximately $39.2 million after deducting

underwriting discounts and commissions of approximately $2.5 million and offering expenses of approximately $0.3 million.

As of September 30, 2021, the Company had cash and cash equivalents of $66.1 million. The accompanying condensed 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. The Company believes that its cash and cash equivalents will be sufficient to fund its operations for at least the next 12 months.
Recent Accounting Pronouncements

 

c.

Recent Accounting Pronouncements

Recently Adopted Accounting Standards

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 was permitted. The Company adopted the applicable amendments within ASU 2019-12 in the first quarter of 2021 and there was no material impact on its condensed consolidated financial statements from the adoption.
Risks and Uncertainties

 

 

d.

Risks and Uncertainties

 

As an aesthetics company, surgical procedures involving the Company’s breast products are susceptible to local and national government restrictions, such as social distancing, vaccination requirements, “shelter in place” orders and business closures. The inability or limited ability to perform such non-emergency procedures significantly harmed the Company’s revenues since the second quarter of 2020 and continued to harm the Company’s revenues during the nine months ended September 30, 2021. While many states have lifted certain restrictions on non-emergency procedures, the Company will likely continue to experience future harm to its revenues while existing or new restrictions remain in place. It is not possible to accurately predict the length or severity of the COVID-19 pandemic or the timing for a broad and sustained ability to perform non-emergency procedures involving the Company’s products. The Company continues to monitor and assess new information related to the COVID-19 pandemic, the actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets.

 

Further, the spread of COVID-19 has caused the Company to modify workforce practices, and the Company may take further actions determined to be in the best interests of the Company’s employees or as required by governments. The continued spread of COVID-19, or another infectious disease, could also result in delays or disruptions in the Company’s supply chain or adversely affect the Company’s manufacturing facilities and personnel. Further, trade and/or national security protection policies may be adjusted as a result of the COVID-19 pandemic, such as actions by governments that limit, restrict or prevent the movement of certain goods into a country and/or region, and current U.S./China trade relations may be further exacerbated by the pandemic.

 

The estimates used for, but not limited to, determining the collectability of accounts receivable, fair value of long-lived assets and goodwill, and sales returns liability required could be impacted by the pandemic. While the full impact of COVID-19 is unknown at this time, the Company has made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained.
Reclassifications

 

 

e.

Reclassifications

 

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

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

Revenue contracts may include multiple products or services, each of which is considered a separate performance obligation. Performance obligations typically include the delivery of promised products, such as breast implants,

tissue expanders, and BIOCORNEUM, along with service-type warranties. Other deliverables are sometimes promised but are ancillary and insignificant in the context of the contract as a whole. Revenue is allocated to each performance obligation based on its relative standalone selling price. The Company determines standalone selling prices based on observable prices for all performance obligations with the exception of the service-type warranty under the Platinum20 Limited Warranty Program, or Platinum20, which is based on the expected cost plus margin approach. 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 September 30, 2021 were as follows:

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

Balance as of December 31, 2020

 

$

1,945

 

Additions and adjustments

 

 

1,379

 

Revenue recognized

 

 

(411

)

Balance as of September 30, 2021

 

$

2,913

 

 

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

 

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

Sales Return Liability

 

With the exception of the Company’s BIOCORNEUM scar management products, the Company allows for the return of products from customers within six months after the original sale, which is accounted for as variable consideration. A sales return liability is established based on estimated returns using relevant historical experience taking into consideration recent gross sales and notifications of pending returns, as adjusted for changes in recent industry events and trends. 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 following table provides a rollforward of the sales return liability (in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Beginning balance

 

$

9,192

 

 

$

8,116

 

Addition to reserve for sales activity

 

 

115,374

 

 

 

84,119

 

Actual returns

 

 

(110,996

)

 

 

(82,110

)

Change in estimate of sales returns

 

 

(1,265

)

 

 

(46

)

Ending balance

 

$

12,305

 

 

$

10,079

 

 

 
v3.21.2
Discontinued Operations (Tables)
 9 Months Ended
Sep. 30, 2021
Discontinued Operations And Disposal Groups [Abstract]  
Schedule of Disposal Groups Including Discontinued Operations Balance Sheet and Income Statement The following table presents the aggregate carrying amounts of major classes of assets and liabilities of discontinued operations (in thousands):

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Assets of discontinued operations:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

$

—

 

 

$

3,732

 

Inventories, net

 

 

—

 

 

 

9,480

 

Prepaid expenses and other current assets

 

 

4

 

 

 

263

 

Current assets of discontinued operations

 

 

4

 

 

 

13,475

 

Property and equipment, net

 

 

—

 

 

 

805

 

Total assets of discontinued operations

 

$

4

 

 

$

14,280

 

Liabilities of discontinued operations:

 

 

 

 

 

 

 

 

Accounts payable

 

$

6

 

 

$

704

 

Accrued and other current liabilities

 

 

495

 

 

 

3,982

 

Total liabilities of discontinued operations

 

$

501

 

 

$

4,686

 

 

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

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Net sales

 

$

—

 

 

$

3,888

 

 

$

9,347

 

 

$

11,488

 

Cost of goods sold

 

 

—

 

 

 

1,286

 

 

 

4,805

 

 

 

4,846

 

Gross profit

 

 

—

 

 

 

2,602

 

 

 

4,542

 

 

 

6,642

 

Operating expenses

 

 

57

 

 

 

7,034

 

 

 

1,744

 

 

 

28,571

 

Income (loss) from operations of discontinued operations

 

 

(57

)

 

 

(4,432

)

 

 

2,798

 

 

 

(21,929

)

Other income (expense), net

 

 

—

 

 

 

98

 

 

 

(77

)

 

 

36

 

Income (loss) from discontinued operations before income taxes

 

 

(57

)

 

 

(4,334

)

 

 

2,721

 

 

 

(21,893

)

Loss on sale of discontinued operations before income taxes

 

 

(36

)

 

 

—

 

 

 

(2,488

)

 

 

—

 

Total income (loss) from discontinued operations before income taxes

 

 

(93

)

 

 

(4,334

)

 

 

233

 

 

 

(21,893

)

Income tax expense (benefit)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Income (loss) from discontinued operations, net of income taxes

 

$

(93

)

 

$

(4,334

)

 

$

233

 

 

$

(21,893

)

 
v3.21.2
Revenue (Tables)
 9 Months Ended
Sep. 30, 2021
Revenue From Contract With Customer [Abstract]  
Schedule of Liability for Unsatisfied Performance Obligations Under Service Warranty and Deliverables Under Certain Marketing Programs

The liability for unsatisfied performance obligations under the service warranty as of September 30, 2021 were as follows:

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

Balance as of December 31, 2020

 

$

1,945

 

Additions and adjustments

 

 

1,379

 

Revenue recognized

 

 

(411

)

Balance as of September 30, 2021

 

$

2,913

 
Schedule of Rollforward of Sales Return Liability The following table provides a rollforward of the sales return liability (in thousands):

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Beginning balance

 

$

9,192

 

 

$

8,116

 

Addition to reserve for sales activity

 

 

115,374

 

 

 

84,119

 

Actual returns

 

 

(110,996

)

 

 

(82,110

)

Change in estimate of sales returns

 

 

(1,265

)

 

 

(46

)

Ending balance

 

$

12,305

 

 

$

10,079

 

 

 
v3.21.2
Fair Value of Financial Instruments (Tables)
 9 Months Ended
Sep. 30, 2021
Financial Instruments Owned At Fair Value [Abstract]  
Schedule of Carrying Value and Fair Value of Convertible Note As of September 30, 2021, the carrying value and fair value of the convertible note were as follows (in thousands):

 

 

 

September 30, 2021

 

 

 

Carrying Value

 

 

Fair Value

 

Convertible note

 

$

46,657

 

 

$

42,330

 

 
v3.21.2
Balance Sheet Components (Tables)
 9 Months Ended
Sep. 30, 2021
Balance Sheet Related Disclosures [Abstract]  
Schedule of inventories, net

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Raw materials

 

$

2,669

 

 

$

3,788

 

Work in progress

 

 

4,325

 

 

 

10,710

 

Finished goods

 

 

40,278

 

 

 

21,254

 

Finished goods - right of return

 

 

4,257

 

 

 

3,416

 

 

 

$

51,529

 

 

$

39,168

 
Schedule of property and equipment, net

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Leasehold improvements

 

$

2,605

 

 

$

2,523

 

Manufacturing equipment and toolings

 

 

9,832

 

 

 

8,529

 

Computer equipment

 

 

1,637

 

 

 

2,522

 

Software

 

 

6,581

 

 

 

3,010

 

Furniture and fixtures

 

 

1,542

 

 

 

1,040

 

 

 

 

22,197

 

 

 

17,624

 

Less accumulated depreciation

 

 

(7,311

)

 

 

(5,323

)

 

 

$

14,886

 

 

$

12,301

 
Schedule of Carrying Amount of Goodwill

The carrying amount of goodwill as of September 30, 2021 and December 31, 2020 were as follows (in thousands):

 

 

 

Plastic Surgery

 

 

miraDry

 

 

Total

 

Balances as of December 31, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

23,480

 

 

 

7,629

 

 

 

31,109

 

Accumulated impairment losses

 

 

(14,278

)

 

 

(7,629

)

 

 

(21,907

)

Goodwill, net

 

$

9,202

 

 

$

—

 

 

$

9,202

 

Balances as of September 30, 2021

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill

 

 

23,480

 

 

 

7,629

 

 

 

31,109

 

Accumulated impairment losses

 

 

(14,278

)

 

 

(7,629

)

 

 

(21,907

)

Goodwill, net

 

$

9,202

 

 

$

—

 

 

$

9,202

 
Schedule of Other Intangible assets

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

 

 

 

Average

 

 

 

 

 

 

Amortization

 

 

September 30, 2021

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(4,132

)

 

$

808

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(372

)

 

 

428

 

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

 

 

 

(1,455

)

 

 

6,785

 

Total definite-lived intangible assets

 

 

 

 

 

$

16,443

 

 

$

(8,422

)

 

$

8,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names - indefinite life

 

—

 

 

 

450

 

 

 

—

 

 

 

450

 

Total indefinite-lived intangible assets

 

 

 

 

 

$

450

 

 

$

—

 

 

$

450

 

 

 

 

Average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization

 

 

December 31, 2020

 

 

 

Period

 

 

Gross Carrying

 

 

Accumulated

 

 

Intangible

 

 

 

(in years)

 

 

Amount

 

 

Amortization

 

 

Assets, net

 

Intangibles with definite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Customer relationships

 

 

10

 

 

$

4,940

 

 

$

(3,856

)

 

$

1,084

 

Trade names - finite life

 

 

12

 

 

 

800

 

 

 

(322

)

 

 

478

 

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

 

 

 

(865

)

 

 

7,375

 

Total definite-lived intangible assets

 

 

 

 

 

$

16,443

 

 

$

(7,506

)

 

$

8,937

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangibles with indefinite lives

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Trade names - indefinite life

 

—

 

 

 

450

 

 

 

—

 

 

 

450

 

Total indefinite-lived intangible assets

 

 

 

 

 

$

450

 

 

$

—

 

 

$

450

 
Schedule of Future Estimated Amortization Expense The following table summarizes the future estimated amortization expense relating to the Company's definite-lived intangible assets as of September 30, 2021 (in thousands):

 

 

 

Amortization

 

Period

 

Expense

 

2021

 

$

305

 

2022

 

 

1,163

 

2023

 

 

1,092

 

2024

 

 

948

 

2025

 

 

805

 

Thereafter

 

 

3,708

 

 

 

$

8,021

 
Schedule of accrued and other current liabilities

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Payroll and related expenses

 

$

4,389

 

 

$

3,003

 

Accrued severance

 

 

452

 

 

 

2,900

 

Accrued commissions

 

 

3,494

 

 

 

4,734

 

Accrued manufacturing

 

 

252

 

 

 

225

 

Deferred and contingent consideration, current portion

 

 

3,195

 

 

 

10,146

 

Audit, consulting and legal fees

 

 

—

 

 

 

48

 

Accrued sales and marketing expenses

 

 

96

 

 

 

300

 

Lease liabilities

 

 

1,618

 

 

 

1,588

 

Other

 

 

8,789

 

 

 

5,464

 

 

 

$

22,285

 

 

$

28,408

 
Schedule of rollforward of the accrued assurance-type warrantie

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

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

Balance as of January 1

 

$

1,934

 

 

$

1,397

 

Warranty costs incurred during the period

 

 

(270

)

 

 

(83

)

Changes in accrual related to warranties issued during the period

 

 

673

 

 

 

367

 

Changes in accrual related to pre-existing warranties

 

 

11

 

 

 

(5

)

Balance as of September 30

 

$

2,348

 

 

$

1,676

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

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of September 30, 2021 and December 31, 2020 and indicate the level of the fair value hierarchy utilized to determine such fair value (in thousands):

 

 

 

Fair Value Measurements as of

 

 

 

September 30, 2021 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

106

 

 

$

106

 

 

 

$

—

 

 

$

—

 

 

$

106

 

 

$

106

 

 

 

 

Fair Value Measurements as of

 

 

 

December 31, 2020 Using:

 

 

 

Level 1

 

 

Level 2

 

 

Level 3

 

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liability for contingent consideration

 

$

—

 

 

$

—

 

 

$

7,026

 

 

$

7,026

 

Liability for derivative

 

 

—

 

 

 

—

 

 

 

26,570

 

 

 

26,570

 

 

 

$

—

 

 

$

—

 

 

$

33,596

 

 

$

33,596

 

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

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

 

 

 

 

 

 

 

 

 

 

 

Contingent consideration liability

 

 

Derivative liability

 

Balance, December 31, 2020

 

$

7,026

 

 

$

26,570

 

Change in fair value

 

 

49

 

 

 

14,460

 

Settlements

 

 

(6,969

)

 

 

—

 

Reclassification to equity

 

 

—

 

 

 

(41,030

)

Balance, September 30, 2021

 

$

106

 

 

$

—

 
v3.21.2
Leases (Tables)
 9 Months Ended
Sep. 30, 2021
Leases [Abstract]  
Components of Lease Expense

 

Components of lease expense were as follows:

 

 

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

Lease Cost

 

Classification

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Operating lease cost

 

Operating expenses

 

$

405

 

 

$

428

 

 

$

1,239

 

 

$

1,270

 

Operating lease cost

 

Inventory

 

 

154

 

 

 

131

 

 

 

377

 

 

 

364

 

Sublease income

 

Operating expenses

 

 

(233

)

 

 

—

 

 

 

(301

)

 

 

—

 

Total operating lease cost

 

 

 

$

326

 

 

$

559

 

 

$

1,315

 

 

$

1,634

 

Finance lease cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Amortization of right-of-use assets

 

Operating expenses

 

 

8

 

 

 

10

 

 

 

26

 

 

 

31

 

Amortization of right-of-use assets

 

Inventory

 

 

12

 

 

 

12

 

 

 

35

 

 

 

24

 

Interest on lease liabilities

 

Other income (expense), net

 

 

2

 

 

 

3

 

 

 

6

 

 

 

7

 

Total finance lease cost

 

 

 

$

22

 

 

$

25

 

 

$

67

 

 

$

62

 

Total lease cost

 

 

 

$

348

 

 

$

584

 

 

$

1,382

 

 

$

1,696

 

 
Supplemental Cash Flow Information Related to Operating and Finance Leases

 

Supplemental cash flow information related to operating and finance leases for the nine months ended September 30, 2021 was as follows (in thousands):

 

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

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

 

 

 

 

 

 

 

 

Operating cash outflows from operating leases

 

$

1,261

 

 

$

1,337

 

Operating cash outflows from finance leases

 

 

56

 

 

 

61

 

Right-of-use assets obtained in exchange for lease obligations:

 

 

 

 

 

 

 

 

Operating leases

 

$

572

 

 

$

1,242

 

Finance leases

 

 

—

 

 

 

157

 
Supplemental Balance Sheet Information Related to Operating and Finance Leases

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

 

 

 

September 30,

 

 

December 31,

 

 

 

2021

 

 

2020

 

Reported as:

 

 

 

 

 

 

 

 

Other assets

 

 

 

 

 

 

 

 

Operating lease right-of-use assets

 

$

6,524

 

 

$

7,176

 

Finance lease right-of-use assets

 

 

97

 

 

 

158

 

Total right-of use assets

 

$

6,621

 

 

$

7,334

 

Accrued and other current liabilities

 

 

 

 

 

 

 

 

Operating lease liabilities

 

$

1,543

 

 

$

1,504

 

Finance lease liabilities

 

 

75

 

 

 

84

 

Warranty reserve and other long-term liabilities

 

 

 

 

 

 

 

 

Operating lease liabilities

 

 

5,315

 

 

 

5,946

 

Finance lease liabilities

 

 

41

 

 

 

77

 

Total lease liabilities

 

$

6,974

 

 

$

7,611

 

Weighted average remaining lease term (years)

 

 

 

 

 

 

 

 

Operating leases

 

 

4

 

 

 

5

 

Finance leases

 

 

2

 

 

 

2

 

Weighted average discount rate

 

 

 

 

 

 

 

 

Operating leases

 

 

8.09

%

 

 

7.75

%

Finance leases

 

 

6.48

%

 

 

6.15

%
Maturities of Operating and Finance Lease Liabilities

 

As of September 30, 2021, maturities of the Company’s operating and finance lease liabilities are as follows (in thousands):

 

Period

 

Operating leases

 

 

Finance leases

 

 

Total

 

Remainder of 2021

 

$

564

 

 

$

27

 

 

$

591

 

2022

 

 

2,035

 

 

 

58

 

 

 

2,093

 

2023

 

 

2,085

 

 

 

33

 

 

 

2,118

 

2024

 

 

1,629

 

 

 

4

 

 

 

1,633

 

2025

 

 

704

 

 

 

—

 

 

 

704

 

2026 and thereafter

 

 

1,221

 

 

 

—

 

 

 

1,221

 

Total lease payments

 

$

8,238

 

 

$

122

 

 

$

8,360

 

Less imputed interest

 

 

1,380

 

 

 

6

 

 

 

1,386

 

Total lease liabilities

 

$

6,858

 

 

$

116

 

 

$

6,974

 

 

 

 
v3.21.2
Debt (Tables)
 9 Months Ended
Sep. 30, 2021
Debt Disclosure [Abstract]  
Schedule of Future Principal Payments for Outstanding Debt

The future schedule of principal payments for all outstanding debt as of September 30, 2021 was as follows (in thousands):

 

Fiscal Year

 

 

 

 

Remainder of 2021

 

$

—

 

2022

 

 

—

 

2023

 

 

10,105

 

2024

 

 

5,895

 

2025

 

 

60,000

 

Total

 

$

76,000

 

 
v3.21.2
Stockholders' Equity (Tables)
 9 Months Ended
Sep. 30, 2021
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]  
Summary of option activity

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

 

 

 

 

 

 

 

Weighted

 

 

Weighted

average

 

 

 

 

 

 

 

average

 

 

remaining

 

 

 

Option

 

 

exercise

 

 

contractual

 

 

 

Shares

 

 

price

 

 

term (year)

 

Balances at December 31, 2020

 

 

1,959,501

 

 

$

4.79

 

 

 

5.92

 

Exercised

 

 

(36,363

)

 

 

3.99

 

 

 

 

 

Forfeited

 

 

(138,859

)

 

 

5.15

 

 

 

 

 

Balances at September 30, 2021

 

 

1,784,279

 

 

$

4.78

 

 

 

5.50

 

 
Summary of RSUs activity

Activity related to RSUs is set forth below:

 

 

 

 

 

 

 

Weighted

average

 

 

 

Number

 

 

grant date

 

 

 

of shares

 

 

fair value

 

Balances at December 31, 2020

 

 

3,093,790

 

 

$

6.97

 

Granted

 

 

1,597,983

 

 

 

7.38

 

Vested

 

 

(1,174,753

)

 

 

6.99

 

Forfeited

 

 

(392,728

)

 

 

6.98

 

Balances at September 30, 2021

 

 

3,124,292

 

 

$

7.17

 

 
v3.21.2
Earnings (Loss) Per Share (Tables)
 9 Months Ended
Sep. 30, 2021
Earnings Per Share [Abstract]  
Schedule of earnings (loss) per share, basic and diluted

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Numerator for continuing operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from continuing operations used in computing basic earnings (loss) per share

 

$

28,503

 

 

$

(1,487

)

 

$

(46,647

)

 

$

(46,817

)

Convertible note interest expense

 

 

1,392

 

 

 

-

 

 

 

-

 

 

 

-

 

Fair value adjustments to the derivative liability

 

 

(35,550

)

 

 

-

 

 

 

-

 

 

 

-

 

Losses from continuing operations used in computing diluted loss per share

 

$

(5,655

)

 

$

(1,487

)

 

$

(46,647

)

 

$

(46,817

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator for discontinued operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from discontinued operations, net of income taxes

 

 

(93

)

 

 

(4,334

)

 

 

233

 

 

 

(21,893

)

Income (loss) from discontinued operations used in computing basic and diluted earnings (loss) per share

 

$

(93

)

 

$

(4,334

)

 

$

233

 

 

$

(21,893

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Numerator for losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss) used in computing basic earnings (loss) per share

 

$

28,410

 

 

$

(5,821

)

 

$

(46,414

)

 

$

(68,710

)

Net loss used in computing diluted loss per share

 

$

(5,748

)

 

$

(5,821

)

 

$

(46,414

)

 

$

(68,710

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Denominator:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average outstanding common shares for basic earnings (loss) per share

 

 

58,005,784

 

 

 

50,394,858

 

 

 

56,680,594

 

 

 

50,155,623

 

Dilutive effect of the convertible note

 

 

14,634,146

 

 

 

-

 

 

 

-

 

 

 

-

 

Weighted average outstanding common shares for diluted loss per share

 

 

72,639,930

 

 

 

50,394,858

 

 

 

56,680,594

 

 

 

50,155,623

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

0.49

 

 

$

(0.03

)

 

$

(0.82

)

 

$

(0.93

)

Discontinued operations

 

$

(0.00

)

 

$

(0.09

)

 

$

0.00

 

 

$

(0.44

)

Basic earnings (loss) per share

 

$

0.49

 

 

$

(0.12

)

 

$

(0.82

)

 

$

(1.37

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Continuing operations

 

$

(0.08

)

 

$

(0.03

)

 

$

(0.82

)

 

$

(0.93

)

Discontinued operations

 

$

(0.00

)

 

$

(0.09

)

 

$

0.00

 

 

$

(0.44

)

Diluted earnings (loss) per share

 

$

(0.08

)

 

$

(0.12

)

 

$

(0.82

)

 

$

(1.37

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

The Company excluded the following potentially dilutive securities, outstanding for the three and nine months ended September 30, 2021 and 2020, from the computation of diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2021 and 2020 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2021

 

 

2020

 

 

2021

 

 

2020

 

Stock issuable upon conversion of convertible note

 

 

—

 

 

 

14,634,146

 

 

 

14,634,146

 

 

 

11,002,710

 

Stock options to purchase common stock

 

 

1,582,901

 

 

 

34,308

 

 

 

1,629,493

 

 

 

862,278

 

Unvested RSUs

 

 

2,322,816

 

 

 

1,445,486

 

 

 

2,049,832

 

 

 

1,531,084

 

 

 

 

3,905,717

 

 

 

16,113,940

 

 

 

18,313,471

 

 

 

13,396,072

 
v3.21.2
Summary of Significant Accounting Policies (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Feb. 08, 2021
Mar. 31, 2021
Sep. 30, 2021
Dec. 31, 2020
Sep. 30, 2020
Summary Of Significant Accounting Policies [Line Items]          
Cash and cash equivalents     $ 66,127 $ 54,967 $ 63,483
Follow-on Offering | Common stock          
Summary Of Significant Accounting Policies [Line Items]          
Issuance of/proceeds from common stock (in shares) 5,410,628 6,222,222      
Public offering price (in dollars per share) $ 6.75        
Additional shares granted to underwriters 811,594        
Proceeds from the issuance of common stock, net of underwriting discounts, commissions and offering expenses $ 39,200        
Payment of underwriting discounts and commissions and offering expenses 2,500        
Offering expenses $ 300        
v3.21.2
Discontinued Operations (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended 4 Months Ended 9 Months Ended
Jun. 10, 2021
Oct. 31, 2021
Sep. 30, 2021
Sep. 30, 2021
Sep. 30, 2021
Dec. 31, 2020
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Receivable     $ 26,453 $ 26,453 $ 26,453 $ 19,771
Accounts payable     6,300 6,300 $ 6,300 $ 5,799
Transition Services Agreement            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Post-closing services period         6 months  
TSA fees and cost reimbursements in operating expenses from continuing operations         $ 100  
Payments relating to the TSA services         300  
Receivable relating to TSA services       2,300    
Remittance relating to TSA services       2,200    
Accounts payable     100 100 $ 100  
Sublease Agreement            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Sublease term initial period         6 months  
First option period         24 months  
Subsequent option periods         24 months  
Sublease Income         $ 500  
Sublease Agreement | General and Administrative Expenses            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Sublease Income     200   300  
Other Current Assets | Transition Services Agreement            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Receivable $ 100          
miraDry            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Proceeds from sale of assets 10,000          
Net upfront cash proceeds $ 11,300          
Loss on sale of businesses         2,500  
miraDry | Subsequent Event            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Payment for post close changes in net asset value   $ 3,200        
miraDry | Accrued and Other Current Liabilities            
Income Statement Balance Sheet And Additional Disclosures By Disposal Groups Including Discontinued Operations [Line Items]            
Escrow liability     $ 3,200 $ 3,200 $ 3,200  
v3.21.2
Discontinued Operations - Summary of Aggregate Carrying Amounts of Major Classes of Assets and Liabilities of Discontinued Operations (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Assets of discontinued operations:    
Accounts receivable, net   $ 3,732
Inventories, net   9,480
Prepaid expenses and other current assets $ 4 263
Current assets of discontinued operations 4 13,475
Property and equipment, net   805
Total assets of discontinued operations 4 14,280
Liabilities of discontinued operations:    
Accounts payable 6 704
Accrued and other current liabilities 495 3,982
Total liabilities of discontinued operations $ 501 $ 4,686
v3.21.2
Discontinued Operations - Summary of Information Regarding the Results of Discontinued Operations (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Discontinued Operation Income Loss From Discontinued Operation Disclosures [Abstract]        
Net sales   $ 3,888 $ 9,347 $ 11,488
Cost of goods sold   1,286 4,805 4,846
Gross profit   2,602 4,542 6,642
Operating expenses $ 57 7,034 1,744 28,571
Income (loss) from operations of discontinued operations (57) (4,432) 2,798 (21,929)
Other income (expense), net   98 (77) 36
Income (loss) from discontinued operations before income taxes (57) (4,334) 2,721 (21,893)
Loss on sale of discontinued operations before income taxes (36)   (2,488)  
Total income (loss) from discontinued operations before income taxes (93) (4,334) 233 (21,893)
Income (loss) from discontinued operations, net of income taxes $ (93) $ (4,334) $ 233 $ (21,893)
v3.21.2
Revenue (Details 1) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2021-10-01
Sep. 30, 2021
Product Replacement  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 20 years
Breast Products and Consumable miraDry products  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 30 days
Maximum | Financial Assistance  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 24 months
Minimum | Financial Assistance  
Revenue From Contracts With Customers [Line Items]  
Performance obligation satisfying period 3 months
v3.21.2
Revenue - Schedule of Liability for Unsatisfied Performance Obligations Under Service Warranty and Deliverables Under Certain Marketing Programs (Details)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
USD ($)
Change In Contract With Customer Liability [Abstract]  
Balance as of December 31, 2020 $ 1,945
Additions and adjustments 1,379
Revenue recognized (411)
Balance as of September 30, 2021 $ 2,913
v3.21.2
Revenue (Details)
 9 Months Ended
Sep. 30, 2021
Change In Contract With Customer Liability [Abstract]  
Period for sales return 6 months
v3.21.2
Revenue - Schedule of Rollforward of Sales Return Liability (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Revenue Recognition [Abstract]    
Beginning balance $ 9,192 $ 8,116
Addition to reserve for sales activity 115,374 84,119
Actual returns (110,996) (82,110)
Change in estimate of sales returns (1,265) (46)
Ending balance $ 12,305 $ 10,079
v3.21.2
Fair Value of Financial Instruments - Schedule of Carrying Value and Fair Value of Convertible Note (Details) - Convertible Note
$ in Thousands
Sep. 30, 2021
USD ($)
Debt Instrument [Line Items]  
Carrying Value $ 46,657
Fair Value $ 42,330
v3.21.2
Balance Sheet Components (Inventories) (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Balance Sheet Related Disclosures [Abstract]    
Raw materials $ 2,669 $ 3,788
Work in progress 4,325 10,710
Finished goods 40,278 21,254
Finished goods - right of return 4,257 3,416
Inventory, net $ 51,529 $ 39,168
v3.21.2
Balance Sheet Components (PPE) (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Property Plant And Equipment [Line Items]          
Property and equipment, gross $ 22,197   $ 22,197   $ 17,624
Less accumulated depreciation (7,311)   (7,311)   (5,323)
Property and equipment, net 14,886   14,886   12,301
Depreciation expense 700 $ 900 2,200 $ 1,400  
Leasehold improvements          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 2,605   2,605   2,523
Manufacturing equipment and toolings          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 9,832   9,832   8,529
Computer equipment          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 1,637   1,637   2,522
Software          
Property Plant And Equipment [Line Items]          
Property and equipment, gross 6,581   6,581   3,010
Furniture and fixtures          
Property Plant And Equipment [Line Items]          
Property and equipment, gross $ 1,542   $ 1,542   $ 1,040
v3.21.2
Balance Sheet Components - Schedule of Carrying Amount of Goodwill (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Goodwill and intangible assets    
Goodwill $ 31,109 $ 31,109
Accumulated impairment losses (21,907) (21,907)
Goodwill, net 9,202 9,202
miraDry    
Goodwill and intangible assets    
Goodwill 7,629 7,629
Accumulated impairment losses (7,629) (7,629)
Plastic Surgery    
Goodwill and intangible assets    
Goodwill 23,480 23,480
Accumulated impairment losses (14,278) (14,278)
Goodwill, net $ 9,202 $ 9,202
v3.21.2
Balance Sheet Components - Components of Other Intangible Assets (Details) - USD ($)
$ in Thousands
 9 Months Ended 12 Months Ended
Sep. 30, 2021
Dec. 31, 2020
Other intangible assets    
Gross Carrying Amount $ 16,443 $ 16,443
Accumulated Amortization (8,422) (7,506)
Intangible Assets, net 8,021 8,937
Indefinite-lived intangible assets 450 450
Trade name    
Other intangible assets    
Indefinite-lived intangible assets $ 450 $ 450
Customer relationships    
Other intangible assets    
Average Amortization Period 10 years 10 years
Gross Carrying Amount $ 4,940 $ 4,940
Accumulated Amortization (4,132) (3,856)
Intangible Assets, net $ 808 $ 1,084
Trade name    
Other intangible assets    
Average Amortization Period 12 years 12 years
Gross Carrying Amount $ 800 $ 800
Accumulated Amortization (372) (322)
Intangible Assets, net $ 428 $ 478
Non-compete agreement    
Other intangible assets    
Average Amortization Period 2 years 2 years
Gross Carrying Amount $ 80 $ 80
Accumulated Amortization $ (80) $ (80)
Regulatory approvals    
Other intangible assets    
Average Amortization Period 1 year 1 year
Gross Carrying Amount $ 670 $ 670
Accumulated Amortization $ (670) $ (670)
Acquired FDA non-gel product approval    
Other intangible assets    
Average Amortization Period 11 years 11 years
Gross Carrying Amount $ 1,713 $ 1,713
Accumulated Amortization $ (1,713) $ (1,713)
Manufacturing know-how    
Other intangible assets    
Average Amortization Period 19 years 19 years
Gross Carrying Amount $ 8,240 $ 8,240
Accumulated Amortization (1,455) (865)
Intangible Assets, net $ 6,785 $ 7,375
v3.21.2
Balance Sheet Components (Goodwill and Other Intangible Assets) (Details) - USD ($)
$ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Other intangible assets        
Amortization expense $ 0.3 $ 0.3 $ 0.9 $ 1.0
v3.21.2
Balance Sheet Components - Schedule of Future Estimated Amortization Expense (Details)
$ in Thousands
Sep. 30, 2021
USD ($)
Estimated amortization expense  
2021 $ 305
2022 1,163
2023 1,092
2024 948
2025 805
Thereafter 3,708
Total amortization $ 8,021
v3.21.2
Balance Sheet Components (Accrued liabilities) (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Accrued and other current liabilities    
Payroll and related expenses $ 4,389 $ 3,003
Accrued severance 452 2,900
Accrued commissions 3,494 4,734
Accrued manufacturing 252 225
Deferred and contingent consideration, current portion 3,195 10,146
Audit, consulting and legal fees   48
Accrued sales and marketing expenses 96 300
Lease liabilities 1,618 1,588
Other 8,789 5,464
Total $ 22,285 $ 28,408
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and Other Current Liabilities Accrued and Other Current Liabilities
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and Other Current Liabilities Accrued and Other Current Liabilities
v3.21.2
Balance Sheet Components - Schedule of rollforward of the accrued assurance-type warranties (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Balance Sheet Related Disclosures [Abstract]    
Beginning Balance $ 1,934 $ 1,397
Warranty costs incurred during the period (270) (83)
Changes in accrual related to warranties issued during the period 673 367
Changes in accrual related to pre-existing warranties 11 (5)
Ending Balance $ 2,348 $ 1,676
v3.21.2
Balance Sheet Components (Liabilities measured at fair value) (Details)
 9 Months Ended
Sep. 30, 2021
USD ($)
miraDry | Future Milestone Payments  
Fair Value Measurements  
Contingent consideration liability $ 31,000
Estimated Dividend Yield  
Fair Value Measurements  
Measurement input 0
Measurement Input, Discount Rate | BIOCORNEUM | Future Royalty Payments  
Fair Value Measurements  
Fair value measurement discount rate 21.00%
Measurement Input, Discount Rate | miraDry | Future Milestone Payments  
Fair Value Measurements  
Fair value measurement discount rate 11.20%
v3.21.2
Balance Sheet Components - Schedule of Company's Liabilities that are Measured at Fair Value on a Recurring Basis (Details) - Fair Value, Recurring - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Fair Value Measurements    
Fair value liability $ 106 $ 33,596
Contingent Consideration Liability    
Fair Value Measurements    
Fair value liability 106 7,026
Derivative Liability    
Fair Value Measurements    
Fair value liability   26,570
Level 3    
Fair Value Measurements    
Fair value liability 106 33,596
Level 3 | Contingent Consideration Liability    
Fair Value Measurements    
Fair value liability $ 106 7,026
Level 3 | Derivative Liability    
Fair Value Measurements    
Fair value liability   $ 26,570
v3.21.2
Balance Sheet Components - Schedule of Aggregate Fair Values of Company's Liabilities for which Fair Value is Determined by Level 3 Inputs (Details) - Level 3 - Fair Value, Recurring
$ in Thousands
 9 Months Ended
Sep. 30, 2021
USD ($)
Contingent Consideration Liability  
Fair Value Measurements  
Balance at beginning of the period $ 7,026
Change in fair value 49
Settlements (6,969)
Balance at the end of the period 106
Derivative Liability  
Fair Value Measurements  
Balance at beginning of the period 26,570
Change in fair value 14,460
Reclassification to equity $ (41,030)
v3.21.2
Leases - Components of Lease Expense (Details) - USD ($)
$ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Lessee Lease Description [Line Items]        
Total operating lease cost $ 326 $ 559 $ 1,315 $ 1,634
Finance lease cost        
Total finance lease cost 22 25 67 62
Total lease cost 348 584 1,382 1,696
Inventory        
Lessee Lease Description [Line Items]        
Total operating lease cost 154 131 377 364
Finance lease cost        
Amortization of right-of-use assets 12 12 35 24
Operating Expenses        
Lessee Lease Description [Line Items]        
Total operating lease cost 405 428 1,239 1,270
Sublease income (233)   (301)  
Finance lease cost        
Amortization of right-of-use assets 8 10 26 31
Other Income (Expense), Net        
Finance lease cost        
Interest on lease liabilities $ 2 $ 3 $ 6 $ 7
v3.21.2
Leases (Details) - Sublease Agreement
$ in Millions
 9 Months Ended
Sep. 30, 2021
USD ($)
Lessee Lease Description [Line Items]  
Initial sublease term 6 months
Subsequent option periods 24 months
Sublease Income $ 0.5
v3.21.2
Leases - Supplemental Cash Flow Information Related to Operating and Finance Leases (Details) - USD ($)
$ in Thousands
 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Cash paid for amounts included in the measurement of lease liabilities:    
Operating cash outflows from operating leases $ 1,261 $ 1,337
Operating cash outflows from finance leases 56 61
Right-of-use assets obtained in exchange for lease obligations:    
Operating leases $ 572 1,242
Finance leases   $ 157
v3.21.2
Leases - Supplemental Balance Sheet Information Related to Operating and Finance Leases (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Assets And Liabilities Lessee [Abstract]    
Operating lease right-of-use assets $ 6,524 $ 7,176
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] us-gaap:OtherAssets us-gaap:OtherAssets
Finance lease right-of-use assets $ 97 $ 158
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] us-gaap:OtherAssets us-gaap:OtherAssets
Total right-of use assets $ 6,621 $ 7,334
Operating lease liabilities $ 1,543 $ 1,504
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and Other Current Liabilities Accrued and Other Current Liabilities
Finance lease liabilities $ 75 $ 84
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] Accrued and Other Current Liabilities Accrued and Other Current Liabilities
Operating lease liabilities $ 5,315 $ 5,946
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] sien:WarrantyReserveAndOtherLongTermLiabilitiesMember sien:WarrantyReserveAndOtherLongTermLiabilitiesMember
Finance lease liabilities $ 41 $ 77
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] sien:WarrantyReserveAndOtherLongTermLiabilitiesMember sien:WarrantyReserveAndOtherLongTermLiabilitiesMember
Total lease liabilities $ 6,974 $ 7,611
Weighted average remaining lease term (years)    
Operating leases 4 years 5 years
Finance leases 2 years 2 years
Weighted average discount rate    
Operating leases 8.09% 7.75%
Finance leases 6.48% 6.15%
v3.21.2
Leases - Maturities of Operating and Finance Lease Liabilities (Details) - USD ($)
$ in Thousands
Sep. 30, 2021
Dec. 31, 2020
Operating Lease Liabilities, Payments Due [Abstract]    
Operating leases, Remainder of 2021 $ 564  
Operating leases, 2022 2,035  
Operating leases, 2023 2,085  
Operating leases, 2024 1,629  
Operating leases, 2025 704  
Operating leases, 2026 and thereafter 1,221  
Total operating lease payments 8,238  
Less imputed interest, Operating leases 1,380  
Total operating lease liabilities 6,858  
Finance Lease Liabilities, Payments, Due [Abstract]    
Finance leases, Remainder of 2021 27  
Finance leases, 2022 58  
Finance leases, 2023 33  
Finance leases, 2024 4  
Total finance lease payments 122  
Less imputed interest, Finance leases 6  
Total finance lease liabilities 116  
Lessee Lease Liability Payments Due [Abstract]    
Remainder of 2021 591  
2022 2,093  
2023 2,118  
2024 1,633  
2025 704  
2026 and thereafter 1,221  
Total lease payments 8,360  
Less imputed interest 1,386  
Total lease liabilities $ 6,974 $ 7,611
v3.21.2
Debt (Details)
 3 Months Ended 9 Months Ended
Feb. 05, 2021
USD ($)
Tranche
Jul. 25, 2017
Sep. 30, 2021
USD ($)
shares
Sep. 30, 2020
USD ($)
Sep. 30, 2021
USD ($)
shares
Sep. 30, 2020
USD ($)
Jul. 01, 2022
USD ($)
Sep. 28, 2021
USD ($)
$ / shares
shares
Jul. 01, 2021
USD ($)
Dec. 31, 2020
shares
May 11, 2020
USD ($)
Line Of Credit Facility [Line Items]                      
Additional interest (as a percent)   5.00%                  
Common stock, shares issued | shares     58,129,589   58,129,589         50,712,151  
Amortization of debt issuance costs and discounts         $ 2,632,000 $ 3,430,000          
Gain on extinguishment of PPP loan         6,652,000            
Paycheck Protection Program                      
Line Of Credit Facility [Line Items]                      
Gain on extinguishment of PPP loan     $ 6,700,000                
Restated Term Loan Agreement                      
Line Of Credit Facility [Line Items]                      
Periodic commitment amount $ 1,000,000                   $ 15,000,000
Line of credit facility, remaining borrowing capacity $ 15,000,000                    
Unfunded tranche revised number | Tranche 2                    
Debt instrument amendment fee $ 750,000                    
Loan amount outstanding     16,000,000.0   16,000,000.0            
Unamortized debt issuance costs     1,200,000   1,200,000            
Restated Term Loan Agreement | Tranche 4                      
Line Of Credit Facility [Line Items]                      
Periodic commitment amount                 $ 5,000,000    
Restated Term Loan Agreement | Scenario Forecast | Tranche 5                      
Line Of Credit Facility [Line Items]                      
Periodic commitment amount             $ 5,000,000        
Revolving Loan                      
Line Of Credit Facility [Line Items]                      
Loan amount outstanding     0   0            
Revolving Loan | Other Assets                      
Line Of Credit Facility [Line Items]                      
Unamortized debt issuance costs     100,000   100,000            
Term Loan and Revolving Loan                      
Line Of Credit Facility [Line Items]                      
Amortization of debt issuance costs     100,000 $ 200,000 400,000 700,000          
Deerfield Facility Agreement                      
Line Of Credit Facility [Line Items]                      
Common stock, shares issued | shares               0      
Derivative liability fair value               $ 41,000,000.0      
Deerfield Facility Agreement | Convertible Note                      
Line Of Credit Facility [Line Items]                      
Unamortized debt discount and issuance costs     $ 13,300,000   $ 13,300,000            
Debt instrument interest rate     12.00%   12.00%            
Amortization of debt issuance costs and discounts     $ 800,000 $ 700,000 $ 2,200,000 $ 1,500,000          
Deerfield Facility Agreement | Maximum                      
Line Of Credit Facility [Line Items]                      
Share price | $ / shares               $ 30.00      
Deerfield Facility Agreement | Minimum                      
Line Of Credit Facility [Line Items]                      
Share price | $ / shares               $ 1.50      
v3.21.2
Debt (Schedule of Future Principal Payments of Outstanding Debt) (Details)
$ in Thousands
Sep. 30, 2021
USD ($)
Debt Disclosure [Abstract]  
2023 $ 10,105
2024 5,895
2025 60,000
Total $ 76,000
v3.21.2
Stockholders' Equity (Details) - $ / shares
Sep. 30, 2021
Dec. 31, 2020
Stock other disclosures    
Common and preferred stock, shares authorized 210,000,000 210,000,000
Common stock, shares authorized 200,000,000 200,000,000
Common stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares authorized 10,000,000 10,000,000
Preferred stock, par value (in dollars per share) $ 0.01 $ 0.01
Preferred stock, shares issued 0 0
Preferred stock, shares outstanding 0 0
v3.21.2
Stockholders' Equity (Warrants) (Details) - Oxford Finance, LLC - $ / shares
 1 Months Ended
Jan. 17, 2013
Jun. 30, 2014
Sep. 30, 2021
Common Stock Warrants      
Exercise price (in dollars per share) $ 14.671 $ 14.671  
Warrants outstanding     0
Tranche A, B and C loans      
Common Stock Warrants      
Warrant term 7 years    
Percentage of term loan amounts 3.00%    
Tranche D term loan      
Common Stock Warrants      
Warrant term   7 years  
Percentage of term loan amounts   2.50%  
v3.21.2
Stockholders' Equity (Options) (Details) - USD ($)
 3 Months Ended 9 Months Ended 12 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Dec. 31, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of shares available for future grants 1,253,615   1,253,615    
Stock options          
Number of options          
Balance at the beginning of period (in shares)     1,959,501    
Options exercised (in shares)     (36,363)    
Options forfeited (in shares)     (138,859)    
Balance at the end of the period (in shares) 1,784,279   1,784,279   1,959,501
Weighted average exercise price          
Balance at the beginning of period (in dollars per share)     $ 4.79    
Options exercised (in dollars per share)     3.99    
Options forfeited (in dollars per share)     5.15    
Balance at the end of period (in dollars per share) $ 4.78   $ 4.78   $ 4.79
Additional information          
Weighted average remaining contractual term     5 years 6 months   5 years 11 months 1 day
Stock-based compensation expense $ 100,000 $ 0 $ 400,000 $ 0  
Unrecognized compensation costs (in dollars) $ 1,700,000   $ 1,700,000    
2014 Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of shares available for future grants 1,860,554   1,860,554    
Inducement Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of shares available for future grants 638,710   638,710    
Number of shares awarded     1,904,425    
Grant period of stock awards     10 years    
Number of additional years of requisite service period     3 years    
Vesting period     1 year    
Inducement Plan | On the first anniversary          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Vesting percentage     25.00%    
Inducement Plan | Minimum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant     100.00%    
Percentage of possible payouts of the target award     0.00%    
Inducement Plan | Minimum | Individual options          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Vesting percentage     25.00%    
Inducement Plan | Maximum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Percentage of possible payouts of the target award     100.00%    
2007 Plan and 2014 Plan | Stock options          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Grant period of stock awards     10 years    
2007 Plan and 2014 Plan | Stock options | Minimum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant     100.00%    
Percentage of voting power owned by shareholder 10.00%   10.00%    
2007 Plan and 2014 Plan | Stock options | Maximum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant     110.00%    
v3.21.2
Stockholders' Equity (Restricted Stock) (Details) - Restricted stock units - 2014 Plan - USD ($)
$ / shares in Units, $ in Millions
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Stockholders' Equity, other disclosures        
Requisite service period, annually       3 years
Stock-based compensation expense $ 2.1 $ 1.5 $ 7.3 $ 4.9
Unrecognized compensation costs (in dollars) $ 11.1   $ 11.1  
Weighted average period over which unrecognized compensation costs are expected to be recognized     2 years 18 days  
Number of shares        
Balance at beginning of the period     3,093,790  
Granted     1,597,983  
Vested     (1,174,753)  
Forfeited     (392,728)  
Balance at end of the period 3,124,292   3,124,292  
Weighted average grant date fair value        
Balance at beginning of the period     $ 6.97  
Granted     7.38  
Vested     6.99  
Forfeited     6.98  
Balance at end of the period $ 7.17   $ 7.17  
v3.21.2
Stockholders' Equity (Stock Purchase) (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Oct. 31, 2014
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Number of shares available for future grants 1,253,615   1,253,615    
2014 Employee Stock Purchase Plan          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Purchase period of offering     6 months    
Rate of purchase price of stock on fair value (as a percent)     85.00%    
Purchases under the award     199,071    
Weighted Average purchase price $ 3.38   $ 3.38    
Stock-based compensation expense $ 100,000 $ 100,000 $ 400,000 $ 400,000  
Incremental compensation cost     $ 0 $ 0  
2014 Employee Stock Purchase Plan | Maximum          
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]          
Discount rate on the value of shares through payroll deductions (as a percent)     15.00%    
Expiration period of each offering     27 months    
Number of shares reserved for future issuance         255,500
v3.21.2
Earnings (Loss) Per Share - Schedule of Earnings (Loss) Per Share, Basic and Diluted (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Numerator for continuing operations:        
Income (loss) from continuing operations used in computing basic earnings (loss) per share $ 28,503 $ (1,487) $ (46,647) $ (46,817)
Convertible note interest expense 1,392      
Fair value adjustments to the derivative liability (35,550)      
Losses from continuing operations used in computing diluted loss per share (5,655) (1,487) (46,647) (46,817)
Numerator for discontinued operations:        
Income (loss) from discontinued operations, net of income taxes (93) (4,334) 233 (21,893)
Income (loss) from discontinued operations used in computing basic and diluted earnings (loss) per share (93) (4,334) 233 (21,893)
Numerator for losses:        
Net income (loss) used in computing basic earnings (loss) per share 28,410 (5,821) (46,414) (68,710)
Net loss used in computing diluted loss per share $ (5,748) $ (5,821) $ (46,414) $ (68,710)
Denominator:        
Basic 58,005,784 50,394,858 56,680,594 50,155,623
Dilutive effect of the convertible note 14,634,146      
Weighted average outstanding common shares for diluted loss per share 72,639,930 50,394,858 56,680,594 50,155,623
Basic earnings (loss) per share:        
Continuing operations $ 0.49 $ (0.03) $ (0.82) $ (0.93)
Discontinued operations 0.00 (0.09) 0.00 (0.44)
Basic earnings (loss) per share 0.49 (0.12) (0.82) (1.37)
Diluted earnings (loss) per share:        
Continuing operations (0.08) (0.03) (0.82) (0.93)
Discontinued operations 0.00 (0.09) 0.00 (0.44)
Diluted earnings (loss) per share $ (0.08) $ (0.12) $ (0.82) $ (1.37)
v3.21.2
Earnings (Loss) Per Share - Schedule of Potentially Dilutive Securities Excluded from Computation of Diluted Net Loss Per Share Attributable to Common Stockholders (Details) - shares
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Potentially dilutive securities        
Potentially dilutive securities 3,905,717 16,113,940 18,313,471 13,396,072
Stock issuable upon conversion of convertible note        
Potentially dilutive securities        
Potentially dilutive securities   14,634,146 14,634,146 11,002,710
Stock options to purchase common stock        
Potentially dilutive securities        
Potentially dilutive securities 1,582,901 34,308 1,629,493 862,278
Unvested RSUs        
Potentially dilutive securities        
Potentially dilutive securities 2,322,816 1,445,486 2,049,832 1,531,084
v3.21.2
Income Taxes (Details) - USD ($)
 3 Months Ended 9 Months Ended
Sep. 30, 2021
Sep. 30, 2020
Sep. 30, 2021
Sep. 30, 2020
Income Tax Disclosure [Abstract]        
Tax expense $ 0 $ 0 $ 0 $ 0
v3.21.2
Segment Information (Details)
 9 Months Ended
Sep. 30, 2021
Segment
Segment Reporting [Abstract]  
Number of reportable segments 1