Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | May 07, 2021 | |
Cover [Abstract] | ||
Entity Registrant Name | STRATA Skin Sciences, Inc. | |
Entity Central Index Key | 0001051514 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2021 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Address, State or Province | PA | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 33,889,239 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 10,043 | $ 10,604 |
Restricted cash | 7,482 | 7,508 |
Accounts receivable, net of allowance for doubtful accounts of $220 and $274, respectively | 2,853 | 2,944 |
Inventories | 3,312 | 3,444 |
Prepaid expenses and other current assets | 413 | 331 |
Total current assets | 24,103 | 24,831 |
Property and equipment, net | 5,788 | 5,529 |
Operating lease right-of-use assets, net | 902 | 988 |
Intangible assets, net | 5,993 | 6,345 |
Goodwill | 8,803 | 8,803 |
Other assets | 265 | 282 |
Total assets | 45,854 | 46,778 |
Current liabilities: | ||
Note payable | 7,275 | 7,275 |
Current portion of long-term debt | 1,811 | 1,478 |
Accounts payable | 3,151 | 2,764 |
Other accrued liabilities | 5,286 | 4,690 |
Current portion of operating lease liabilities | 375 | 369 |
Deferred revenues | 2,208 | 2,262 |
Total current liabilities | 20,106 | 18,838 |
Long-term liabilities: | ||
Long-term debt, net | 717 | 1,050 |
Deferred tax liability | 258 | 254 |
Long-term operating lease liabilities, net | 613 | 710 |
Other liabilities | 24 | 34 |
Total liabilities | 21,718 | 20,886 |
Commitments and contingencies (see Note 15) | ||
Stockholders' equity: | ||
Series C Convertible Preferred Stock, $.10 par value, 10,000,000 shares authorized; 0 shares issued and outstanding at March 31, 2021 and, December 31, 2020 | 0 | 0 |
Common Stock, $.001 par value, 150,000,000 shares authorized; 33,817,305 and 33,801,045 shares issued and outstanding at March 31, 2021 and, December 31, 2020, respectively | 34 | 34 |
Additional paid-in capital | 245,493 | 244,831 |
Accumulated deficit | (221,391) | (218,973) |
Total stockholders' equity | 24,136 | 25,892 |
Total liabilities and stockholders' equity | $ 45,854 | $ 46,778 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Current assets: | ||
Allowance for doubtful accounts | $ 220 | $ 274 |
Stockholders' equity: | ||
Series C Convertible Preferred Stock, par value (in dollars per share) | $ 0.10 | $ 0.10 |
Series C Convertible Preferred Stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Series C Convertible Preferred Stock, shares issued (in shares) | 0 | 0 |
Series C Convertible Preferred Stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 150,000,000 | 150,000,000 |
Common stock shares issued on exercise of options (in shares) | 33,817,305 | 33,801,045 |
Common stock, shares outstanding (in shares) | 33,817,305 | 33,801,045 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Revenues, net | $ 5,827 | $ 6,730 |
Cost of revenues | 2,114 | 2,331 |
Gross profit | 3,713 | 4,399 |
Operating expenses: | ||
Engineering and product development | 384 | 292 |
Selling and marketing | 2,932 | 2,953 |
General and administrative | 2,789 | 2,102 |
Total operating expenses | 6,105 | 5,347 |
Income (loss) from operations | (2,392) | (948) |
Other (expense) income, net: | ||
Interest (expense) income, net | (22) | 1 |
Other (expense) income, net | (22) | 1 |
Loss before income taxes | (2,414) | (947) |
Income tax expense | (4) | (88) |
Net loss | $ (2,418) | $ (1,035) |
Loss per common share: | ||
Basic (in dollars per share) | $ (0.07) | $ (0.03) |
Diluted (in dollars per share) | $ (0.07) | $ (0.03) |
Shares used in computing loss per common share: | ||
Basic (in shares) | 33,802,129 | 33,164,321 |
Diluted (in shares) | 33,802,129 | 33,164,321 |
Loss per Preferred Series C share basic and diluted (in dollars per share) | $ 0 | $ (11.42) |
Shares used in computing loss per basic and diluted Preferred Series C shares (in shares) | 0 | 1,480 |
Preferred Series C Shares [Member] | ||
Other (expense) income, net: | ||
Loss attributable to each class | $ 0 | $ (17) |
Loss per common share: | ||
Basic (in dollars per share) | $ 0 | $ (11.42) |
Diluted (in dollars per share) | $ 0 | $ (11.42) |
Common Shares [Member] | ||
Other (expense) income, net: | ||
Net loss | $ 0 | $ 0 |
Loss attributable to each class | $ (2,418) | $ (1,018) |
Loss per common share: | ||
Basic (in dollars per share) | $ (0.07) | $ (0.03) |
Diluted (in dollars per share) | $ (0.07) | $ (0.03) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY - USD ($) $ in Thousands | Preferred Stock [Member]Convertible Preferred Stock - Series C [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2019 | $ 1 | $ 33 | $ 243,180 | $ (214,561) | $ 28,653 |
Beginning balance (in shares) at Dec. 31, 2019 | 2,103 | 32,932,273 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | $ 0 | $ 0 | 430 | 0 | 430 |
Conversion of convertible preferred stock into common stock | $ (1) | $ 1 | 0 | 0 | 0 |
Conversion of convertible preferred stock into common stock (in shares) | (2,103) | 782,089 | |||
Net loss | $ 0 | $ 0 | 0 | (1,035) | (1,035) |
Ending balance at Mar. 31, 2020 | $ 0 | $ 34 | 243,610 | (215,596) | 28,048 |
Ending balance (in shares) at Mar. 31, 2020 | 0 | 33,714,362 | |||
Beginning balance at Dec. 31, 2020 | $ 0 | $ 34 | 244,831 | (218,973) | 25,892 |
Beginning balance (in shares) at Dec. 31, 2020 | 0 | 33,801,045 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Stock-based compensation | $ 0 | $ 0 | 662 | 0 | 662 |
Issuance of restricted stock | $ 0 | $ 0 | 0 | 0 | 0 |
Issuance of restricted stock (in shares) | 0 | 16,260 | |||
Net loss | $ 0 | $ 0 | 0 | (2,418) | (2,418) |
Ending balance at Mar. 31, 2021 | $ 0 | $ 34 | $ 245,493 | $ (221,391) | $ 24,136 |
Ending balance (in shares) at Mar. 31, 2021 | 0 | 33,817,305 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Cash Flows From Operating Activities: | ||
Net loss | $ (2,418) | $ (1,035) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 833 | 1,038 |
Amortization of right-of-use assets | 86 | 79 |
Provision for doubtful accounts | (54) | 2 |
Stock-based compensation | 662 | 430 |
Deferred taxes | 4 | 88 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 145 | 1,176 |
Inventories | 132 | (444) |
Prepaid expenses and other assets | (65) | 43 |
Accounts payable | 387 | 222 |
Other accrued liabilities | 596 | 16 |
Other liabilities | (10) | (59) |
Operating lease liabilities | (91) | (60) |
Deferred revenues | (54) | (898) |
Net cash provided by operating activities | 153 | 598 |
Cash Flows From Investing Activities: | ||
Lasers placed-in-service | (654) | (596) |
Purchases of property and equipment | (86) | 0 |
Net cash used in investing activities | (740) | (596) |
Net (decrease) increase in cash and cash equivalents and restricted cash | (587) | 2 |
Cash and cash equivalents and restricted cash, beginning of period | 18,112 | 15,629 |
Cash and cash equivalents and restricted cash, end of period | 17,525 | 15,631 |
Cash and cash equivalents | 10,043 | 8,150 |
Restricted cash | 7,482 | 7,481 |
Supplemental information of cash and non-cash transactions: | ||
Cash paid for interest | $ 30 | $ 52 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2021 | |
The Company [Abstract] | |
The Company | Note 1 The Company: Background STRATA Skin Sciences (the “Company”) is a medical technology company in dermatology dedicated to developing, commercializing and marketing innovative products for the treatment of dermatologic conditions. Its products include the XTRAC® excimer laser and VTRAC® lamp systems utilized in the treatment of psoriasis, vitiligo and various other skin conditions. The XTRAC is an ultraviolet light excimer laser system utilized to treat psoriasis, vitiligo and other skin diseases. The XTRAC excimer laser system received clearance from the United States Food and Drug Administration (the “FDA”) in 2000. As of March 31, 2021, there were 837 XTRAC systems placed in dermatologists' offices in the United States and 34 systems internationally under the Company's recurring revenue business model. The XTRAC systems deployed under the recurring revenue model generate revenue on a per procedure basis or include a fixed payment over an agreed upon period with a capped number of treatments, which if exceeded would incur additional fees. The per-procedure charge is inclusive of the use of the system and the services provided by the Company to the customer which includes system maintenance, and other services. The VTRAC Excimer Lamp system, offered in addition to the XTRAC system internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with a lamp system. In September 2020, the Company signed a direct distribution agreement with our Japanese distributor for a combination of direct capital sales and recurring revenue for the country of Japan. In February 2021, the Company signed an agreement with our Chinese distributor for a combination of direct capital sales and recurring revenues for the country of China. The Company has now introduced its Home by XTRAC™ business leveraging in-house resources including DTC advertising, in-house call center and its insurance reimbursement team to provide an at-home, insurance-reimbursed treatment option for patients with certain skin diseases that do not qualify for in-office treatments. The Company is evaluating this business in an ongoing beta test. In late 2019, there was an outbreak of a new strain of coronavirus (“COVID-19”) which became a global pandemic. The COVID-19 pandemic has negatively impacted the global economy, disrupted global supply chains, constrained work force participation and created significant volatility and disruption of financial markets. In addition, the pandemic lead to the suspension of elective procedures in the U.S. and to the temporary closure of many physician practices which are our primary customers. We do not know the extent of the impact on our customers including their potential for permanent closure. While many offices have reopened, the ongoing impact of the COVID-19 pandemic on the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frames, will depend on future developments, including the duration and ongoing spread of the COVID-19 outbreak, continued restrictions on business operations and transport, any governmental and societal responses thereto including legislative or regulatory changes as well as the distribution and effectiveness of COVID-19 vaccines and the continued impact on worldwide economic and geopolitical conditions, all of which are uncertain and cannot be predicted. Domestically, as the procedures for which the Company’s devices are used are elective in nature; and as social distancing, travel restrictions, quarantines and other restrictions became prevalent in the United States, this had a negative impact on the Company’s recurring revenue model and its financial position and cash flow. The virus has disrupted the supply chain from China and other countries and the Company depends upon its supply chain to provide a steady source of components to manufacture and repair our devices. To mitigate the impact of COVID-19, the Company has taken a variety of measures to ensure the availability and functioning of its critical infrastructure by implementing business continuity plans, and to promote the safety and security of its employees while complying with various government mandates, including work-from-home arrangements and social-distancing initiatives to reduce the transmission of COVID-19, such as providing face masks for employees at facilities significantly impacted and requiring masks and on-site body temperature monitoring before entering facilities. In addition, the Company created and executed programs utilizing its direct to consumer advertising and call center to contact patients and partner clinics to restart the Company’s partners’ businesses. To conserve its cash in order to mitigate the ongoing impact of the COVID-19 pandemic, in the second quarter of 2020, the Company furloughed employees who returned to work after the Company received proceeds from the PPP Loan. The Company also reduced discretionary spending, reduced all inventory purchases and delayed payments to vendors. Delayed payments to vendors were approximately $785 as of March 31, 2021. See Note 2, Liquidity Basis of Presentation Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned, inactive subsidiary in India. All significant intercompany balances and transactions have been eliminated in consolidation. Unaudited Interim Condensed Consolidated Financial Statements The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These condensed consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed consolidated balance sheet at December 31, 2020, has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021 or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), and other forms filed with the SEC from time to time. Dollar amounts included herein are in thousands, except share, per share data and number of lasers. Reclassifications Certain reclassifications from the prior year presentation have been made to conform to the current year presentation. These reclassifications did not have a material impact on the Company’s equity, results of operations, or cash flows. Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, and there have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2021. Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As of March 31, 2021, the more significant estimates include (1) revenue recognition, in regards to deferred revenues and the contract term and valuation allowances of accounts receivable, (2) the inputs used in the impairment analyses of goodwill, (3) the estimated useful lives of intangible assets and property and equipment, (4) the inputs used in determining the fair value of equity-based awards, (5) the valuation allowance related to deferred tax assets, (6) the inventory reserves, (7) state sales and use tax accruals and (8) warranty claims. Additionally, the full impact of the ongoing COVID-19 outbreak is unknown and cannot be reasonably estimated. However, management has made appropriate accounting estimates on certain accounting matters, which include the allowance for doubtful accounts, inventory valuation, carrying value of the goodwill and other long-lived assets, based on the facts and circumstances available as of the reporting date. The Company’s future assessment of the magnitude and duration of the ongoing COVID-19 outbreak, as well as other factors, could result in material impacts to the Company’s financial statements in future reporting periods. Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820, Fair Value Measurements and Disclosures • Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. • Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. • Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The fair value of cash and cash equivalents and restricted cash are based on their respective demand value, which are equal to the carrying value. The carrying value of all short-term monetary assets and liabilities is estimated to be approximate to their fair value due to the short-term nature of these instruments. As of March 31, 2021 and December 31, 2020, the carrying value of the note payable and the Company’s long term debt are estimated to approximate fair value. Earnings Per Share The Company calculates loss per common share and Preferred Series C share in accordance with ASC 260, Earnings per Share . Under ASC 260, basic loss per common share and Preferred Series C share is calculated by dividing l by the weighted-average number of common shares and Preferred Series C shares outstanding during the reporting period and excludes dilution for potentially dilutive securities. Diluted loss per common share and Preferred Series C share gives effect to dilutive options, warrants and other potential common shares outstanding during the period. No shares of the Company’s Series C Convertible Preferred Stock was outstanding as of March 31, 2021. These shares were subordinate to all other securities at the same subordination level as common stock and they participated in all dividends and distributions declared or paid with respect to common stock of the Company, on an as-converted basis. Therefore, the Series C Convertible Preferred Shares met the definition of common stock under ASC 260. Earnings per share is presented for each class of security meeting the definition of common stock. The loss is allocated to each class of security meeting the definition of common stock based on their contractual terms. The following table presents the calculation of basic and diluted loss per share by each class of security for the three months ended March 31, 2021, and 2020: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Common Stock Series C Convertible Preferred Stock Common Stock Series C Convertible Preferred Stock Loss attributable to each class $ (2,418 ) $ - $ (1,018 ) $ (17 ) Weighted average number of shares outstanding during the period 33,802,129 - 33,164,321 1,480 Basic and Diluted loss per share $ (0.07 ) $ - $ (0.03 ) $ (11.42 ) The Company considers its Series C Convertible Preferred Stock to be participating securities in the presentation of earnings per share. For the three months ended March 31, 2021, and 2020, diluted loss per common share and Series C Convertible Preferred Stock share is equal to the basic loss per common share and Series C Convertible Preferred Stock share, respectively, since all potentially dilutive securities are anti-dilutive. The following table sets forth the weighted average of potential common stock equivalents outstanding during the three months ended March 31, 2021, and 2020 that have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: Three Months Ended March 31, 2021 2020 Common stock purchase warrants 6,384 749,901 Restricted stock units 87,109 169,023 Common stock options 5,837,085 4,908,038 Total 5,930,578 5,826,962 Accounting Pronouncements Recently Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Recent Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Statements. This pronouncement provides temporary optional expedients and exceptions for applying U.S. GAAP principles to contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance in March 2020, and will apply through December 31, 2022. We continue to evaluate the temporary expedients and options available under this guidance, and the effects of these pronouncements and as the Company does not have any hedging activities does not believe this will have a material effect on the Company’s condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivative and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40); Accounting for Convertible Instruments and Contracts in an Entity’s own Equity. The pronouncement simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. Specifically, the ASU "simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP." In addition, the ASU "removes certain settlement conditions that are required for equity contracts to qualify for it" and "simplifies the diluted earnings per share (EPS) calculations in certain areas.” The guidance is effective beginning after December 15, 2021 and early adoption is permitted. The Company does not currently engage in contracts covered by this guidance and does not believe it will have a material effect on the Company’s condensed consolidated financial statements, but could in the future. |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2021 | |
Liquidity [Abstract] | |
Liquidity | Note 2 Liquidity The Company has been negatively impacted by the ongoing COVID-19 pandemic, has historically experienced recurring losses and has been dependent on raising capital from the sale of securities in order to continue to operate and meet the Company’s obligations in the ordinary course of business. Since the equity financing in May 2018 and pre-COVID, the Company has improved revenues, gross profit, generated positive cash flow from operations, refinanced its debt at a lower interest rate and received cash proceeds from the PPP loan and the EIDL loan (each as defined in Note 9 below). Management believes that the Company’s cash and cash equivalents, combined with the anticipated revenues from the sale or use of the Company’s products and the proceeds from the PPP loan and the EIDL loan, will be sufficient to satisfy our working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with our existing operations through the next 12 months following the date of the issuance of these unaudited condensed consolidated financial statements. However, the negative impact of the ongoing COVID-19 outbreak on the financial markets could interfere with our ability to access financing and on favorable terms. |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2021 | |
Revenue [Abstract] | |
Revenue Recognition | Note 3 Revenue Recognition In the Dermatology Recurring Procedures Segment the Company has two types of arrangements for its phototherapy treatment equipment as follows: (i) the Company places its lasers in a physician’s office at no charge to the physician, and generally charges the physician a fee for an agreed upon number of treatments; or (ii) the Company places its lasers in a physician’s office and charges the physician a fixed fee for a specified period of time not to exceed an agreed upon number of treatments; if that number is exceeded additional fees will have to be paid. For the purposes of U.S. GAAP only, these two types of arrangements are treated under the guidance of ASC 842, Leases. While these arrangements are not contractually operating leases, since the Company sells the physician access codes in order to operate the treatment equipment, these arrangements are similar to operating leases for accounting purposes since the Company provides the customers limited rights to use the treatment equipment and the treatment equipment resides in the physician’s office and the Company may exercise the right to remove the equipment upon notice, under certain circumstances, while the physician controls the utility and output of such equipment during the term of the arrangement as it pertains to the use of access codes to treat the patients. For the lasers placed-in service- under these arrangements, the terms of the domestic arrangements are generally 36 months with automatic one-year renewals and include a termination clause that can be affected at any time by either party with 30 to 60 day notice. Amounts paid are generally non-refundable. For the first type of arrangement, sales of access codes are considered variable treatment code payments and are recognized as revenue over the estimated usage period of the agreed upon number of treatments. For the second type of arrangement, customers purchase access codes and revenue is recognized ratably on a straight-line basis as the lasers are being used over the term period specified in the agreement. Variable treatment code payments that will be paid only if the customer exceeds the agreed upon number of treatments are recognized only when such treatments are being exceeded and used. Internationally, through its Korean, Japanese and, in 2021, Chinese distributors, the Company generally sells access codes for a fixed amount on a monthly basis to end-user customers and the terms are generally 48 months, with termination in the event of the customers’ failure to remit payments timely, and include a potential buy-out at the end of the term of the contract. Currently, this is the only foreign recurring revenue. Pre-paid amounts are recorded in deferred revenue and recognized as revenue over the lease term in the patterns described above. Under both methods, pricing is fixed with the customer. With respect to lease and non-lease components, the Company adopted the practical expedient to account for the arrangement as a single lease component. In the Dermatology Procedures Equipment segment, the Company sells its products internationally through distributors and domestically, directly to a physician. For the product sales, the Company recognizes revenues when control of the promised products is transferred to either the Company's distributors or end-user customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those products (the transaction price). Control transfers to the customer at a point in time. To indicate the transfer of control, the Company must have a present right to payment and legal title must have passed to the customer. The Company ships most of its products FOB shipping point, and as such, the Company primarily transfers control and records revenue upon shipment. From time to time the Company will grant certain customers, for example governmental customers, FOB destination terms, and the transfer of control for revenue recognition occurs upon receipt. The Company has elected to recognize the cost of freight and shipping activities as fulfillment costs. Amounts billed to customers for shipping and handling are included as part of the transaction price and recognized as revenue when control of the underlying goods are transferred to the customer. The related shipping and freight charges incurred by the Company are included in cost of revenues. Remaining performance obligations related to ASC 606 represent the aggregate transaction price allocated to performance obligations with an original contract term greater than one year, which are fully or partially unsatisfied at the end of the period. Remaining performance obligations include the potential obligation to perform under extended warranties but excludes any equipment accounted for as leases. As of March 31, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $81, and the Company expects to recognize $79 of the remaining performance obligations within one year and the remainder over one to three years. Contract assets primarily relate to the Company’s rights to consideration for work completed in relation to its services performed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. Currently, the Company does not have any contract assets which have not transferred to a receivable. Contract liabilities primarily relate to extended warranties where the Company has received payments, but has not yet satisfied the related performance obligations. The allocations of the transaction price are based on the price of stand-alone warranty contracts sold in the ordinary course of business. The advance consideration received from customers for the warranty services is a contract liability that is recognized ratably over the warranty period. As of March 31, 2021, the $79 of short-term contract liabilities is presented as deferred revenues and the $2 of long-term contract liabilities is presented within Other Liabilities on the condensed consolidated balance sheet. For the three months ended March 31, 2021, and 2020, the Company recognized $34 and $57, respectively, as revenue from amounts classified as contract liabilities (i.e. deferred revenues) as of December 31, 2020, and 2019. With respect to contract acquisition costs, the Company applied the practical expedient and expenses these costs immediately. The Company records co-pay reimbursements made to patients receiving laser treatments as a reduction of revenue. For the three months ended March 31, 2021, and 2020, the Company recorded such reimbursements in the amounts of $157 and $168, respectively. The following tables present the Company’s revenue disaggregated by geographical region for the three months ended March 31, 2021 and, 2020, respectively. Domestic refers to revenue from customers based in the United States, and substantially all foreign revenue is derived from dermatology procedures equipment sales to the Company’s international master distributor for physicians based primarily in Asia and recurring revenue primarily from our distributor in Korea. Three Months Ended March 31, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 4,426 $ 258 $ 4,684 Foreign 253 890 1,143 Total $ 4,679 $ 1,148 $ 5,827 Three Months Ended March 31, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 5,597 $ 315 $ 5,912 Foreign 104 714 818 Total $ 5,701 $ 1,029 $ 6,730 The following table summarizes the Company’s expected future undiscounted fixed treatment code payments from international recurring revenue customers as of March 31, Remaining 2021 $ 984 2022 1,317 2023 1,226 2024 776 2025 123 Thereafter - Total $ 4,426 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2021 | |
Inventories [Abstract] | |
Inventories | Note 4 Inventories: Inventories consist of: March 31, 2021 December 31, 2020 Raw materials and work-in-process $ 2,751 $ 2,949 Finished goods 561 495 Total inventories $ 3,312 $ 3,444 Work-in-process is immaterial, given the Company’s typically short manufacturing cycle, and therefore is disclosed in conjunction with raw materials. |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2021 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 5 Property and Equipment, net: Property and equipment consist of: March 31, 2021 December 31, 2020 Lasers placed-in-service $ 23,596 $ 22,942 Equipment, computer hardware and software 223 146 Furniture and fixtures 252 243 Leasehold improvements 43 43 24,114 23,374 Accumulated depreciation and amortization (18,326 ) (17,845 ) Property and equipment, net $ 5,788 $ 5,529 Depreciation and related amortization expense was $481 and $586 for the three months ended March 31, 2021, and 2020, respectively. |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2021 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | Note 6 Intangible Assets, net: Set forth below is a detailed listing of definite-lived intangible assets as of March 31, 2021: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (3,278 ) $ 2,422 Product technology 2,000 (2,000 ) - Customer relationships 6,900 (3,967 ) 2,933 Tradenames 1,500 (862 ) 638 $ 16,100 $ (10,107 ) $ 5,993 Related amortization expense was $352 and $452 for the three months ended March 31, 2021, and 2020, respectively. Definite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset group may not be recoverable. The Company recognizes an impairment loss when and to the extent that the recoverable amount of an asset group is less than its carrying value. There were no impairment charges for the three months ended March 31, 2021. Estimated amortization expense for the above amortizable intangible assets for future periods is as follows: Remaining 2021 $ 1,058 2022 1,410 2023 1,410 2024 1,410 2025 705 Total $ 5,993 |
Other Accrued Liabilities
Other Accrued Liabilities | 3 Months Ended |
Mar. 31, 2021 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 7 Other Accrued Liabilities: Other accrued liabilities consist of: March 31, 2021 December 31, 2020 Accrued warranty, current $ 63 $ 87 Accrued compensation, including commissions and vacation 1,491 891 Accrued state sales, use and other taxes 3,150 3,105 Accrued professional fees and other accrued liabilities 582 607 Total other accrued liabilities $ 5,286 $ 4,690 Accrued State Sales and Use Tax In the ordinary course of business, the Company is, from time to time, subject to audits performed by state taxing authorities. These actions and proceedings are generally based on the position that the arrangements entered into by the Company are subject to sales and use tax rather than exempt from tax under applicable law. The Company uses estimates when accruing its sales and use tax liability. All of the Company’s tax positions are subject to audit. One state has assessed the Company, in two assessments, an aggregate amount of $1,484 for the period from March 2014 through February 2020, including penalties and interest. The Company has declined an informal offer to settle at a substantially lower amount, and the Company appealed in that jurisdiction’s administrative process of appeal. In January 2021, the Company received notification that the administrative judge from the respective state had issued an opinion finding in favor of the Company that the sale of XTRAC treatment codes were not taxable as sales tax with respect to the first assessment. The jurisdiction has filed an appeal of the administrative law judge’s finding, but has not yet submitted a legal brief to support the appeal. A second jurisdiction has made an assessment of $720 from June 2015 through March 2018 plus interest of $171 through April 2020. The Company is also in that jurisdiction’s administrative process of appeal and the timing of the process has been impacted by the COVID-19 pandemic. If there is a determination that the true object of the Company’s recurring revenue model is not exempt from sales taxes and is not a prescription medicine or the Company does not have other defenses where the Company does not prevail, the Company may be subject to sales taxes in those particular states for previous years and in the future, plus potential interest and penalties for failure to pay such taxes. The Company believes its state sales and use tax accruals have properly recognized such that if the Company’s arrangements with customers are deemed more likely than not that the Company would not be exempt from sales tax in a particular state are the basis for measurement of the state sales and use tax is calculated in accordance with ASC 405, Liabilities as a transaction tax. If and when the Company is successful in defending itself or in settling the sales tax obligation for a lesser amount, the reversal of this liability is to be recorded in the period the settlement is reached. However, the precise scope, timing and time period at issue, as well as the final outcome of any audit and actual settlement remains uncertain. The Company records state sales tax collected and remitted for its customers on equipment sales on a net basis, excluded from revenue. The Company’s sales tax expense that is not presently being collected and remitted for the recurring revenue business is recorded in general and administrative expenses on the condensed consolidated statements of operations. Accrued Warranty Costs The Company offers a standard warranty on product sales generally for a one to two-year period, however, the Company has offered longer warranty periods, ranging from three to four years, in order to meet competition or meet customer demands. The Company provides for the estimated cost of the future warranty claims on the date the product is sold. Total accrued warranty is included in other accrued liabilities and other liabilities on the condensed consolidated balance sheet. The activity in the warranty accrual during the three months ended March 31, 2021 and, 2020, is summarized as follows: Three Months Ended, March 31, 2021 2020 Accrual at beginning of period $ 113 $ 232 Additions charged to warranty expense 4 3 Expiring warranties/claimed satisfied (32 ) (54 ) Total 85 181 Less: current portion (63 ) (143 ) Total long-term accrued warranty costs $ 22 $ 38 |
Note Payable
Note Payable | 3 Months Ended |
Mar. 31, 2021 | |
Note Payable [Abstract] | |
Note Payable | Note 8 Note Payable On December 30, 2020, the Company renewed its $7,275 loan with a commercial bank pursuant to a one-year Fixed Rate – Term Promissory Note (the “Note”). The Company's obligations under the Note are secured by an Assignment and Pledge of Time Deposit (the “Agreement”), under which the Company has pledged to the commercial bank the proceeds of a time deposit account in the amount of the loan and recorded the time deposit and accrued interest as restricted cash on the balance sheet. The principal is due on December 30, 2021 with no penalties for prepayments. The interest rate is fixed at 1.40%. The secured time deposit has a fixed interest rate of 0.40%. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2021 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 9 Long-term Debt: Paycheck Protection Program Loan On April 22, 2020, the Company closed a loan of $2,028 (the “PPP loan”) from a commercial bank, pursuant to the Paycheck Protection Program (“PPP”) administered by the Small Business Administration (the “SBA”) pursuant to the CARES Act. The PPP loan matures on May 1, 2022 and bears an interest rate of 1% per annum. Payments of principal and interest of any unforgiven balance was scheduled to commence December 1, 2020, but is deferred until the SBA approves of the forgiveness amount. Under the Paycheck Protection Program Flexibility Act of 2020 (the “PPP Flexibility Act”), (i) the first payment date for the PPP loan will be the earlier of (a) 10 months after the end of the “covered period” (as determined under the PPP) or (b) the date the bank receives a remittance of the forgiven amount from the SBA, and (ii) the PPP loan’s maturity is extended to five years (from 2 years). In the event the PPP loan, or any portion thereof, is forgiven pursuant to the PPP, the amount forgiven is applied to outstanding principal. In December 2020, the Company submitted an application for forgiveness to the lender, and subject to the SBA’s approval, of 100% of the loan proceeds. The balance of the PPP loan at March 31, 2021 was $2,028. Economic Injury Disaster Loan On May 22, 2020, the Company executed the standard loan documents required for securing a loan (the “EIDL Loan”) from the SBA under its Economic Injury Disaster Loan (“EIDL”) assistance program in light of the impact of the COVID-19 pandemic on the Company’s business. The principal amount of the EIDL Loan is up to $500, with proceeds to be used for working capital purposes and is collateralized by all the Company’s assets. On June 12, 2020, the Company received these funds from the SBA. Interest accrues at the rate of 3.75% per annum. Installment payments, including principal and interest, were originally due monthly beginning March 26, 2021 (twelve months from the date of the promissory note) in the amount of $2. In March 2021, the SBA deferred payments on the EIDL loans by an additional 12 months. The balance of principal and interest is payable over the next thirty years from the date of the promissory note. There are no penalties for prepayment. Based upon guidance issued by the SBA on June 19, 2020, the EIDL Loan is not required to be refinanced by the PPP loan. The balance of the loan at March 31, 2021 was $500. |
Warrants
Warrants | 3 Months Ended |
Mar. 31, 2021 | |
Warrants [Abstract] | |
Warrants | Note 10 Warrants: At December 31, 2020, the Company had 19,812 outstanding common stock warrants at an exercise price of $5.30. These warrants expired on January 29, 2021. There are no outstanding common stock warrants at March 31, 2021. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Mar. 31, 2021 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | Note 11 Stock-based Compensation: As of March 31, 2021, the Company had options to purchase 6,925,478 shares of common stock outstanding with a weighted-average exercise price of $1.83. As of March 31, 2021, options to purchase 4,243,387 shares are vested and exercisable. There are 41,774 shares remaining available for issuance in the form of future equity awards as of March 31, 2021. There were 71,934 restricted stock units vested and unissued as of March 31, 2021 which were all issued in April and May 2021. Stock-based compensation expense, which is included in general and administrative expense, for the three months ended March 31, 2021 and 2020, was $662 and $430, respectively. As of March 31, 2021, there was $2,999 in unrecognized compensation expense, which will be recognized over a weighted average period of 1.38 years. On February 28, 2021, in connection with the separation of the Company’s Chief Executive Officer, the Company accelerated the vesting of all unvested options to purchase shares of common stock and extended the period to exercise to August 22, 2021. This acceleration and the extension of the period to vest met the modification criteria for accounting purposes. For these modifications, the Company calculated and recorded the additional compensation expense of $173. On March 1, 2021, the Company granted an option to purchase 1,632,590 shares of common stock to its incoming Chief Executive Officer with a strike price of $1.73 vesting over a three year period, with 544,198 options vesting on the first anniversary of the date of the grant and 136,049 vesting every three months thereafter subject to acceleration of vesting under certain circumstances and expire ten years form the date of the grant. The aggregate fair value of the options granted was $2,103. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | Note 12 Income Taxes: The Company accounts for income taxes using the asset and liability method for deferred income taxes. The provision for income taxes includes federal, state and local income taxes currently payable and deferred taxes resulting from temporary differences between the financial statement and tax bases of assets and liabilities. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Income tax expense of $4 and of $88 for the three months ended March 31, 2021 and, 2020, respectively, was comprised primarily of changes in deferred tax liability related to goodwill. Goodwill is an amortizing asset according to tax regulations. The United States enacted the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act is an approximately $2 trillion emergency economic stimulus package in response to the COVID-19 outbreak, which among other things contains numerous income tax provisions. Some of these tax provisions are expected to be effective retroactively for years ending before the date of enactment. The Company analyzed the impact of the CARES Act and does not foresee a significant impact on its condensed consolidated financial position, results of operations, effective tax rate and cash flows. The Company has experienced certain ownership changes, which under the provisions of Section 382 of the Internal Revenue Code of 1986, as amended, result in annual limitations on the Company's ability to utilize its net operating losses in the future. Although the Company has not performed a Section 382 study, any limitation of its pre-change net operating loss carryforwards that would result in a reduction of its deferred tax asset would also have an equal and offsetting adjustment to the valuation allowance. |
Business Segments
Business Segments | 3 Months Ended |
Mar. 31, 2021 | |
Business Segments [Abstract] | |
Business Segments | Note 13 Business Segments: The Company has organized its business into two operating segments to present its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows: The Dermatology Recurring Procedures segment derives its revenues from the usage of its equipment by dermatologists to perform XTRAC procedures. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest expense and other income (expense), net, are also not allocated to the operating segments. The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended March 31, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 4,679 $ 1,148 $ 5,827 Costs of revenues 1,501 613 2,114 Gross profit 3,178 535 3,713 Gross profit % 67.9 % 46.6 % 63.7 % Allocated operating expenses: Engineering and product development 361 23 384 Selling and marketing 2,802 130 2,932 Unallocated operating expenses - - 2,789 3,163 153 6,105 Income (loss) from operations 15 382 (2,392 ) Interest expense, net - - (22 ) Income (loss) before income taxes $ 15 $ 382 $ (2,414 ) Three Months Ended March 31, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 5,701 $ 1,029 $ 6,730 Costs of revenues 1,802 529 2,331 Gross profit 3,899 500 4,399 Gross profit % 68.4 % 48.6 % 65.4 % Allocated operating expenses: Engineering and product development 274 18 292 Selling and marketing 2,797 156 2,953 Unallocated operating expenses - - 2,102 3,071 174 5,347 Income (loss) from operations 828 326 (948 ) Interest expense, net - - 1 Income (loss) before income taxes $ 828 $ 326 $ (947 ) |
Significant Customer Concentrat
Significant Customer Concentration | 3 Months Ended |
Mar. 31, 2021 | |
Significant Customer Concentration [Abstract] | |
Significant Customer Concentration | Note 14 Significant Customer Concentration: For the three months ended March 31, 2021, revenues from sales to one of the Company’s distributors were $683, or 11.7%, of total revenues for such period. No other customer represented more than 10% of total company revenues for the three months ended March 31, 2021 and 2020. One customer represented 22.3% of total accounts receivable as of March 31, 2021. |
Commitments
Commitments | 3 Months Ended |
Mar. 31, 2021 | |
Commitments [Abstract] | |
Commitments | Note 15 Commitments: Leases The Company recognizes right-of-use assets (“ROU assets”) and operating lease liabilities when it obtains the right to control an asset under a leasing arrangement with an initial term greater than twelve months. The Company leases its facilities and certain IT and office equipment under non-cancellable operating leases. Operating lease costs were $116 and $112 for the three months ended March 31, 2021, and 2020, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $116 and $93 for the three months ended March 31, 2021 and, 2020, respectively. As of March 31, 2021, the incremental borrowing rate was 9.76 % and the weighted average remaining lease term was 2.9 years. The following table summarizes the Company’s operating lease maturities as of March 31, 2021: For the year ending December 31, Amount Remaining 2021 $ 349 2022 371 2023 242 2024 186 Total remaining lease payments 1,148 Less: imputed interest (160 ) Total lease liabilities $ 988 Contingencies: In the ordinary course of business, the Company is routinely defendants in or parties to pending and threatened legal actions and proceedings, including actions brought on behalf of various classes of claimants. These actions and proceedings are generally based on alleged violations of employment, contract and other laws. In some of these actions and proceedings, claims for substantial monetary damages are asserted against the Company. In the ordinary course of business, the Company is also subject to regulatory and governmental examinations, information gathering requests, inquiries, investigations, and threatened legal actions and proceedings. In connection with formal and informal inquiries by federal, state, local and foreign agencies, the Company receives numerous requests, subpoenas and orders for documents, testimony and information in connection with various aspects of its activities. |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
The Company [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its wholly-owned, inactive subsidiary in India. All significant intercompany balances and transactions have been eliminated in consolidation. |
Unaudited Interim Condensed Consolidated Financial Statements | Unaudited Interim Condensed Consolidated Financial Statements The accompanying unaudited interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the United States Securities and Exchange Commission ("SEC") for interim financial reporting. These condensed consolidated statements are unaudited and, in the opinion of management, include all adjustments (consisting of normal recurring adjustments and accruals) necessary to fairly present the results of the interim periods. The condensed consolidated balance sheet at December 31, 2020, has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021 or any other future period. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted in accordance with the rules and regulations for interim reporting of the SEC. These interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”), and other forms filed with the SEC from time to time. Dollar amounts included herein are in thousands, except share, per share data and number of lasers. |
Reclassifications | Reclassifications Certain reclassifications from the prior year presentation have been made to conform to the current year presentation. These reclassifications did not have a material impact on the Company’s equity, results of operations, or cash flows. |
Significant Accounting Policies | Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in our Annual Report on Form 10-K for the year ended December 31, 2020, and there have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2021. |
Use of Estimates | Use of Estimates The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect amounts reported of assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses during the reporting periods. Actual results could differ from those estimates and be based on events different from those assumptions. As of March 31, 2021, the more significant estimates include (1) revenue recognition, in regards to deferred revenues and the contract term and valuation allowances of accounts receivable, (2) the inputs used in the impairment analyses of goodwill, (3) the estimated useful lives of intangible assets and property and equipment, (4) the inputs used in determining the fair value of equity-based awards, (5) the valuation allowance related to deferred tax assets, (6) the inventory reserves, (7) state sales and use tax accruals and (8) warranty claims. Additionally, the full impact of the ongoing COVID-19 outbreak is unknown and cannot be reasonably estimated. However, management has made appropriate accounting estimates on certain accounting matters, which include the allowance for doubtful accounts, inventory valuation, carrying value of the goodwill and other long-lived assets, based on the facts and circumstances available as of the reporting date. The Company’s future assessment of the magnitude and duration of the ongoing COVID-19 outbreak, as well as other factors, could result in material impacts to the Company’s financial statements in future reporting periods. |
Fair Value Measurements | Fair Value Measurements The Company measures and discloses fair value in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification 820, Fair Value Measurements and Disclosures • Level 1 – unadjusted quoted prices are available in active markets for identical assets or liabilities that the Company has the ability to access as of the measurement date. • Level 2 – pricing inputs are other than quoted prices in active markets that are directly observable for the asset or liability or indirectly observable through corroboration with observable market data. • Level 3 – pricing inputs are unobservable for the non-financial asset or liability and only used when there is little, if any, market activity for the non-financial asset or liability at the measurement date. The inputs into the determination of fair value require significant management judgment or estimation. Fair value is determined using comparable market transactions and other valuation methodologies, adjusted as appropriate for liquidity, credit, market and/or other risk factors. This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The fair value of cash and cash equivalents and restricted cash are based on their respective demand value, which are equal to the carrying value. The carrying value of all short-term monetary assets and liabilities is estimated to be approximate to their fair value due to the short-term nature of these instruments. As of March 31, 2021 and December 31, 2020, the carrying value of the note payable and the Company’s long term debt are estimated to approximate fair value. |
Earnings Per Share | Earnings Per Share The Company calculates loss per common share and Preferred Series C share in accordance with ASC 260, Earnings per Share . Under ASC 260, basic loss per common share and Preferred Series C share is calculated by dividing l by the weighted-average number of common shares and Preferred Series C shares outstanding during the reporting period and excludes dilution for potentially dilutive securities. Diluted loss per common share and Preferred Series C share gives effect to dilutive options, warrants and other potential common shares outstanding during the period. No shares of the Company’s Series C Convertible Preferred Stock was outstanding as of March 31, 2021. These shares were subordinate to all other securities at the same subordination level as common stock and they participated in all dividends and distributions declared or paid with respect to common stock of the Company, on an as-converted basis. Therefore, the Series C Convertible Preferred Shares met the definition of common stock under ASC 260. Earnings per share is presented for each class of security meeting the definition of common stock. The loss is allocated to each class of security meeting the definition of common stock based on their contractual terms. The following table presents the calculation of basic and diluted loss per share by each class of security for the three months ended March 31, 2021, and 2020: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Common Stock Series C Convertible Preferred Stock Common Stock Series C Convertible Preferred Stock Loss attributable to each class $ (2,418 ) $ - $ (1,018 ) $ (17 ) Weighted average number of shares outstanding during the period 33,802,129 - 33,164,321 1,480 Basic and Diluted loss per share $ (0.07 ) $ - $ (0.03 ) $ (11.42 ) The Company considers its Series C Convertible Preferred Stock to be participating securities in the presentation of earnings per share. For the three months ended March 31, 2021, and 2020, diluted loss per common share and Series C Convertible Preferred Stock share is equal to the basic loss per common share and Series C Convertible Preferred Stock share, respectively, since all potentially dilutive securities are anti-dilutive. The following table sets forth the weighted average of potential common stock equivalents outstanding during the three months ended March 31, 2021, and 2020 that have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: Three Months Ended March 31, 2021 2020 Common stock purchase warrants 6,384 749,901 Restricted stock units 87,109 169,023 Common stock options 5,837,085 4,908,038 Total 5,930,578 5,826,962 |
Accounting Pronouncements Recently Adopted and Not Yet Adopted | Accounting Pronouncements Recently Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes Recent Accounting Pronouncements Not Yet Adopted In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) Facilitation of the Effects of Reference Rate Reform on Financial Statements. This pronouncement provides temporary optional expedients and exceptions for applying U.S. GAAP principles to contract modifications and hedging relationships to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. The guidance is effective upon issuance in March 2020, and will apply through December 31, 2022. We continue to evaluate the temporary expedients and options available under this guidance, and the effects of these pronouncements and as the Company does not have any hedging activities does not believe this will have a material effect on the Company’s condensed consolidated financial statements. In August 2020, the FASB issued ASU 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivative and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40); Accounting for Convertible Instruments and Contracts in an Entity’s own Equity. The pronouncement simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. Specifically, the ASU "simplifies accounting for convertible instruments by removing major separation models required under current U.S. GAAP." In addition, the ASU "removes certain settlement conditions that are required for equity contracts to qualify for it" and "simplifies the diluted earnings per share (EPS) calculations in certain areas.” The guidance is effective beginning after December 15, 2021 and early adoption is permitted. The Company does not currently engage in contracts covered by this guidance and does not believe it will have a material effect on the Company’s condensed consolidated financial statements, but could in the future. |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
The Company [Abstract] | |
Calculation of Basic and Diluted Loss Per Share by Class of Security | The following table presents the calculation of basic and diluted loss per share by each class of security for the three months ended March 31, 2021, and 2020: Three Months Ended March 31, 2021 Three Months Ended March 31, 2020 Common Stock Series C Convertible Preferred Stock Common Stock Series C Convertible Preferred Stock Loss attributable to each class $ (2,418 ) $ - $ (1,018 ) $ (17 ) Weighted average number of shares outstanding during the period 33,802,129 - 33,164,321 1,480 Basic and Diluted loss per share $ (0.07 ) $ - $ (0.03 ) $ (11.42 ) |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table sets forth the weighted average of potential common stock equivalents outstanding during the three months ended March 31, 2021, and 2020 that have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: Three Months Ended March 31, 2021 2020 Common stock purchase warrants 6,384 749,901 Restricted stock units 87,109 169,023 Common stock options 5,837,085 4,908,038 Total 5,930,578 5,826,962 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Revenue [Abstract] | |
Disaggregation of Revenue | The following tables present the Company’s revenue disaggregated by geographical region for the three months ended March 31, 2021 and, 2020, respectively. Domestic refers to revenue from customers based in the United States, and substantially all foreign revenue is derived from dermatology procedures equipment sales to the Company’s international master distributor for physicians based primarily in Asia and recurring revenue primarily from our distributor in Korea. Three Months Ended March 31, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 4,426 $ 258 $ 4,684 Foreign 253 890 1,143 Total $ 4,679 $ 1,148 $ 5,827 Three Months Ended March 31, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 5,597 $ 315 $ 5,912 Foreign 104 714 818 Total $ 5,701 $ 1,029 $ 6,730 |
Future Undiscounted Fixed Treatment Code Payments from International Recurring Revenue Customers | The following table summarizes the Company’s expected future undiscounted fixed treatment code payments from international recurring revenue customers as of March 31, Remaining 2021 $ 984 2022 1,317 2023 1,226 2024 776 2025 123 Thereafter - Total $ 4,426 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Inventories [Abstract] | |
Inventories | Inventories consist of: March 31, 2021 December 31, 2020 Raw materials and work-in-process $ 2,751 $ 2,949 Finished goods 561 495 Total inventories $ 3,312 $ 3,444 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, Net | Property and equipment consist of: March 31, 2021 December 31, 2020 Lasers placed-in-service $ 23,596 $ 22,942 Equipment, computer hardware and software 223 146 Furniture and fixtures 252 243 Leasehold improvements 43 43 24,114 23,374 Accumulated depreciation and amortization (18,326 ) (17,845 ) Property and equipment, net $ 5,788 $ 5,529 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Intangible Assets, net [Abstract] | |
Definite-lived Intangible Assets | Set forth below is a detailed listing of definite-lived intangible assets as of March 31, 2021: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (3,278 ) $ 2,422 Product technology 2,000 (2,000 ) - Customer relationships 6,900 (3,967 ) 2,933 Tradenames 1,500 (862 ) 638 $ 16,100 $ (10,107 ) $ 5,993 |
Finite-lived Intangible Assets Amortization Expense | Estimated amortization expense for the above amortizable intangible assets for future periods is as follows: Remaining 2021 $ 1,058 2022 1,410 2023 1,410 2024 1,410 2025 705 Total $ 5,993 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of: March 31, 2021 December 31, 2020 Accrued warranty, current $ 63 $ 87 Accrued compensation, including commissions and vacation 1,491 891 Accrued state sales, use and other taxes 3,150 3,105 Accrued professional fees and other accrued liabilities 582 607 Total other accrued liabilities $ 5,286 $ 4,690 |
Accrued Warranty Costs Activity | The activity in the warranty accrual during the three months ended March 31, 2021 and, 2020, is summarized as follows: Three Months Ended, March 31, 2021 2020 Accrual at beginning of period $ 113 $ 232 Additions charged to warranty expense 4 3 Expiring warranties/claimed satisfied (32 ) (54 ) Total 85 181 Less: current portion (63 ) (143 ) Total long-term accrued warranty costs $ 22 $ 38 |
Business Segments (Tables)
Business Segments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Business Segments [Abstract] | |
Segment Reporting Information by Segment | The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended March 31, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 4,679 $ 1,148 $ 5,827 Costs of revenues 1,501 613 2,114 Gross profit 3,178 535 3,713 Gross profit % 67.9 % 46.6 % 63.7 % Allocated operating expenses: Engineering and product development 361 23 384 Selling and marketing 2,802 130 2,932 Unallocated operating expenses - - 2,789 3,163 153 6,105 Income (loss) from operations 15 382 (2,392 ) Interest expense, net - - (22 ) Income (loss) before income taxes $ 15 $ 382 $ (2,414 ) Three Months Ended March 31, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 5,701 $ 1,029 $ 6,730 Costs of revenues 1,802 529 2,331 Gross profit 3,899 500 4,399 Gross profit % 68.4 % 48.6 % 65.4 % Allocated operating expenses: Engineering and product development 274 18 292 Selling and marketing 2,797 156 2,953 Unallocated operating expenses - - 2,102 3,071 174 5,347 Income (loss) from operations 828 326 (948 ) Interest expense, net - - 1 Income (loss) before income taxes $ 828 $ 326 $ (947 ) |
Commitments (Tables)
Commitments (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Commitments [Abstract] | |
Operating Lease Maturities | The following table summarizes the Company’s operating lease maturities as of March 31, 2021: For the year ending December 31, Amount Remaining 2021 $ 349 2022 371 2023 242 2024 186 Total remaining lease payments 1,148 Less: imputed interest (160 ) Total lease liabilities $ 988 |
The Company, Background (Detail
The Company, Background (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2021USD ($)Systems | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Delayed payments to vendors | $ | $ 785 |
XTRAC [Member] | United States [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 837 |
XTRAC [Member] | International [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 34 |
The Company, Earnings Per Share
The Company, Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |||
Series C Convertible Preferred Stock, shares outstanding (in shares) | 0 | 0 | |
Basic loss per share (in dollars per share) | $ (0.07) | $ (0.03) | |
Diluted loss per share (in dollars per share) | $ (0.07) | $ (0.03) | |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 5,930,578 | 5,826,962 | |
Series C Convertible Preferred Stock [Member] | |||
Earnings Per Share [Abstract] | |||
Series C Convertible Preferred Stock, shares outstanding (in shares) | 0 | ||
Loss attributable to each class | $ 0 | $ (17) | |
Weighted average number of shares outstanding during the period (in shares) | 0 | 1,480 | |
Basic loss per share (in dollars per share) | $ 0 | $ (11.42) | |
Diluted loss per share (in dollars per share) | $ 0 | $ (11.42) | |
Common Stock [Member] | |||
Earnings Per Share [Abstract] | |||
Loss attributable to each class | $ (2,418) | $ (1,018) | |
Weighted average number of shares outstanding during the period (in shares) | 33,802,129 | 33,164,321 | |
Basic loss per share (in dollars per share) | $ (0.07) | $ (0.03) | |
Diluted loss per share (in dollars per share) | $ (0.07) | $ (0.03) | |
Common Stock Purchase Warrants [Member] | |||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 6,384 | 749,901 | |
Restricted Stock Units [Member] | |||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 87,109 | 169,023 | |
Common Stock Options [Member] | |||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 5,837,085 | 4,908,038 |
Revenue Recognition, Remaining
Revenue Recognition, Remaining Performance Obligation (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 81 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 79 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | Minimum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-04-01 | Maximum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 3 years |
Revenue Recognition, Contract L
Revenue Recognition, Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Treatment Equipment [Abstract] | ||
Lease term | 36 months | |
Contract with Customer, Liability [Abstract] | ||
Short-term contract liabilities | $ 79 | |
Long-term contract liabilities | 2 | |
Change in Contract with Customer, Liability [Abstract] | ||
Contract liabilities recognized as revenue | 34 | $ 57 |
Co-pay reimbursements recorded as reduction of revenue | $ (157) | $ (168) |
Minimum [Member] | ||
Treatment Equipment [Abstract] | ||
Notice period to cancel contract agreement | 30 days | |
Maximum [Member] | ||
Treatment Equipment [Abstract] | ||
Notice period to cancel contract agreement | 60 days | |
South Korea [Member] | ||
Treatment Equipment [Abstract] | ||
Lease term | 48 months |
Revenue Recognition, Disaggrega
Revenue Recognition, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Disaggregation of Revenue [Abstract] | ||
Revenues, net | $ 5,827 | $ 6,730 |
Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 4,679 | 5,701 |
Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 1,148 | 1,029 |
Domestic [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 4,684 | 5,912 |
Domestic [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 4,426 | 5,597 |
Domestic [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 258 | 315 |
Foreign [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 1,143 | 818 |
Foreign [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | 253 | 104 |
Foreign [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue [Abstract] | ||
Revenues, net | $ 890 | $ 714 |
Revenue Recognition, Future Und
Revenue Recognition, Future Undiscounted Fixed Payments from International Recurring Revenue Customers (Details) $ in Thousands | Mar. 31, 2021USD ($) |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 81 |
International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | 4,426 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 79 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 984 |
Expected timing of satisfaction period | 9 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 1,317 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 1,226 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 776 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 123 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 0 |
Expected timing of satisfaction period |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Mar. 31, 2021 | Dec. 31, 2020 |
Schedule of inventory [Abstract] | ||
Raw materials and work in process | $ 2,751 | $ 2,949 |
Finished goods | 561 | 495 |
Total inventories | $ 3,312 | $ 3,444 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 24,114 | $ 23,374 | |
Accumulated depreciation and amortization | (18,326) | (17,845) | |
Property and equipment, net | 5,788 | 5,529 | |
Depreciation and related amortization expense | 481 | $ 586 | |
Lasers Placed-In-Service [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 23,596 | 22,942 | |
Equipment, Computer Hardware and Software [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 223 | 146 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 252 | 243 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 43 | $ 43 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | $ 16,100 | |
Accumulated amortization | (10,107) | |
Intangible assets, net | 5,993 | |
Amortization expense of intangible assets | 352 | $ 452 |
Impairment of intangible assets | 0 | |
Estimated amortization expense [Abstract] | ||
Remaining 2021 | 1,058 | |
2022 | 1,410 | |
2023 | 1,410 | |
2024 | 1,410 | |
2025 | 705 | |
Intangible assets, net | 5,993 | |
Core Technology [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 5,700 | |
Accumulated amortization | (3,278) | |
Intangible assets, net | 2,422 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | 2,422 | |
Product Technology [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 2,000 | |
Accumulated amortization | (2,000) | |
Intangible assets, net | 0 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | 0 | |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 6,900 | |
Accumulated amortization | (3,967) | |
Intangible assets, net | 2,933 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | 2,933 | |
Tradenames [Member] | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Balance | 1,500 | |
Accumulated amortization | (862) | |
Intangible assets, net | 638 | |
Estimated amortization expense [Abstract] | ||
Intangible assets, net | $ 638 |
Other Accrued Liabilities (Deta
Other Accrued Liabilities (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021USD ($)Assessment | Dec. 31, 2020USD ($) | Mar. 31, 2020USD ($) | |
Other Accrued Liabilities [Abstract] | |||
Accrued warranty, current | $ 63 | $ 87 | $ 143 |
Accrued compensation, including commissions and vacation | 1,491 | 891 | |
Accrued state sales, use and other taxes | 3,150 | 3,105 | |
Accrued professional fees and other accrued liabilities | 582 | 607 | |
Total other accrued liabilities | 5,286 | $ 4,690 | |
Income Tax Examination, Penalties and Interest Accrued [Abstract] | |||
Interest amount | $ 171 | ||
Tax Period from March 2014 through February 2020 [Member] | |||
Income Tax Examination, Penalties and Interest Accrued [Abstract] | |||
Number of assessments | Assessment | 2 | ||
Estimated tax positions subject to audit | $ 1,484 | ||
Tax Period from June 2015 through March 2018 [Member] | |||
Income Tax Examination, Penalties and Interest Accrued [Abstract] | |||
Assessment amount | $ 720 |
Other Accrued Liabilities, Accr
Other Accrued Liabilities, Accrued Warranty Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
Product Warranty Accrual [Roll Forward] | |||
Accrual at beginning of period | $ 113 | $ 232 | |
Additions charged to warranty expense | 4 | 3 | |
Expiring warranties/claims satisfied | (32) | (54) | |
Total | 85 | 181 | |
Less: current portion | (63) | (143) | $ (87) |
Total long-term accrued warranty costs | $ 22 | $ 38 | |
Minimum [Member] | |||
Accrued warranty costs [Abstract] | |||
Standard warranty period | 1 year | ||
Offered warranty period | 3 years | ||
Maximum [Member] | |||
Accrued warranty costs [Abstract] | |||
Standard warranty period | 2 years | ||
Offered warranty period | 4 years |
Note Payable (Details)
Note Payable (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Dec. 30, 2020 | |
Note [Member] | ||
Debt Instruments [Abstract] | ||
Face amount of debt | $ 7,275 | |
Debt instrument term | 1 year | |
Maturity date | Dec. 30, 2021 | |
Fixed interest rate | 1.40% | |
Time Deposit [Member] | ||
Debt Instruments [Abstract] | ||
Fixed interest rate | 0.40% |
Long-term Debt (Details)
Long-term Debt (Details) - USD ($) $ in Thousands | May 22, 2020 | Dec. 31, 2020 | Mar. 31, 2021 | Apr. 22, 2020 |
PPP Loans [Member] | ||||
Long-term Debt [Abstract] | ||||
Face amount of debt | $ 2,028 | |||
Maturity date | May 1, 2022 | |||
Interest rate percentage | 1.00% | |||
Debt instrument, extended term | 5 years | |||
Debt instrument term | 2 years | |||
Percentage of loan proceeds submitted for forgiveness to the SBA | 100.00% | |||
Balance amount of loan | $ 2,028 | |||
EIDL [Member] | ||||
Long-term Debt [Abstract] | ||||
Face amount of debt | $ 500 | |||
Interest rate percentage | 3.75% | |||
Debt instrument term | 30 years | |||
Balance amount of loan | $ 500 | |||
Installment monthly payment amount | $ 2 |
Warrants (Details)
Warrants (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
Warrants and Rights [Abstract] | ||
Warrants outstanding (in shares) | 0 | |
Expiration Date, January 29, 2021 [Member] | ||
Warrants and Rights [Abstract] | ||
Warrants outstanding (in shares) | 19,812 | |
Exercise price (in dollars per share) | $ 5.30 | |
Expiration date | Jan. 29, 2021 |
Stock-based Compensation (Detai
Stock-based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 01, 2021 | Feb. 28, 2021 | Mar. 31, 2021 | Mar. 31, 2020 |
Additional General Disclosures [Abstract] | ||||
Stock-based compensation expense | $ 662 | $ 430 | ||
Compensation Cost Not yet Recognized [Abstract] | ||||
Unrecognized compensation expense | $ 2,999 | |||
Weighted average period of recognition | 1 year 4 months 17 days | |||
Accelerated cost | $ 173 | |||
Stock Options [Member] | ||||
Number of Stock Options [Abstract] | ||||
Options outstanding (in shares) | 6,925,478 | |||
Weighted average exercise price, outstanding (in dollars per share) | $ 1.83 | |||
Vested (in shares) | 4,243,389 | |||
Exercisable (in shares) | 4,243,389 | |||
Number of shares available for issuance (in shares) | 41,774 | |||
Stock Options [Member] | Incoming Chief Executive Officer [Member] | ||||
Compensation Cost Not yet Recognized [Abstract] | ||||
Granted (in shares) | 1,632,590 | |||
Strike price (in dollars per share) | $ 1.73 | |||
Award vesting period | 3 years | |||
Expiry period of option | 10 years | |||
Aggregate fair value of shares issued | $ 2,103 | |||
Stock Options [Member] | Incoming Chief Executive Officer [Member] | Vesting on First Anniversary of Date of Grant [Member] | ||||
Compensation Cost Not yet Recognized [Abstract] | ||||
Granted (in shares) | 544,198 | |||
Stock Options [Member] | Incoming Chief Executive Officer [Member] | Vesting Every Three Months Thereafter [Member] | ||||
Compensation Cost Not yet Recognized [Abstract] | ||||
Granted (in shares) | 136,049 | |||
Restricted Stock Units [Member] | ||||
Restricted Stock Units [Abstract] | ||||
Restricted stock units vested and unissued (in shares) | 71,934 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Income Taxes [Abstract] | ||
Income tax expense | $ 4 | $ 88 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021USD ($)Segment | Mar. 31, 2020USD ($) | |
Business Segments [Abstract] | ||
Number of operating segments | Segment | 2 | |
Results of Operations from Business Segments [Abstract] | ||
Revenues | $ 5,827 | $ 6,730 |
Cost of revenues | 2,114 | 2,331 |
Gross profit | $ 3,713 | $ 4,399 |
Gross profit % | 63.70% | 65.40% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 384 | $ 292 |
Selling and marketing | 2,932 | 2,953 |
Unallocated operating expenses | 2,789 | 2,102 |
Total operating expenses | 6,105 | 5,347 |
Income (loss) from operations | (2,392) | (948) |
Interest expense, net | (22) | 1 |
Loss before income taxes | (2,414) | (947) |
Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 4,679 | 5,701 |
Dermatology Procedures Equipment [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 1,148 | 1,029 |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 4,679 | 5,701 |
Cost of revenues | 1,501 | 1,802 |
Gross profit | $ 3,178 | $ 3,899 |
Gross profit % | 67.90% | 68.40% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 361 | $ 274 |
Selling and marketing | 2,802 | 2,797 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 3,163 | 3,071 |
Income (loss) from operations | 15 | 828 |
Interest expense, net | 0 | 0 |
Loss before income taxes | 15 | 828 |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues | 1,148 | 1,029 |
Cost of revenues | 613 | 529 |
Gross profit | $ 535 | $ 500 |
Gross profit % | 46.60% | 48.60% |
Allocated operating expenses [Abstract] | ||
Engineering and product development | $ 23 | $ 18 |
Selling and marketing | 130 | 156 |
Unallocated operating expenses | 0 | 0 |
Total operating expenses | 153 | 174 |
Income (loss) from operations | 382 | 326 |
Interest expense, net | 0 | 0 |
Loss before income taxes | $ 382 | $ 326 |
Significant Customer Concentr_2
Significant Customer Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Concentration Risk [Abstract] | ||
Revenues, net | $ 5,827 | $ 6,730 |
Revenue [Member] | Customer Concentration Risk [Member] | Distributor One [Member] | ||
Concentration Risk [Abstract] | ||
Revenues, net | $ 683 | |
Concentration risk percentage | 11.70% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||
Concentration Risk [Abstract] | ||
Concentration risk percentage | 22.30% |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Lessee, Operating Lease, Description [Abstract] | ||
Amortization of right-of-use assets | $ 86 | $ 79 |
Operating lease costs | 116 | 112 |
Cash paid for amounts included in measurement of operating lease liabilities | $ 116 | $ 93 |
Incremental borrowing rate | 9.76% | |
Weighted average remaining lease term | 2 years 10 months 24 days | |
Operating Lease Maturities [Abstract] | ||
Remaining 2021 | $ 349 | |
2022 | 371 | |
2023 | 242 | |
2024 | 186 | |
Total remaining lease payments | 1,148 | |
Less: imputed interest | (160) | |
Total lease liabilities | $ 988 | |
Minimum [Member] | ||
Lessee, Operating Lease, Description [Abstract] | ||
Remaining lease term | 1 year | |
Maximum [Member] | ||
Lessee, Operating Lease, Description [Abstract] | ||
Remaining lease term | 4 years | |
Facility One [Member] | ||
Lessee, Operating Lease, Description [Abstract] | ||
Renewal option term | 2 years | |
Carlsbad Facility [Member] | ||
Lessee, Operating Lease, Description [Abstract] | ||
Renewal option term | 5 years |