Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 04, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Document Transition Report | false | |
Entity File Number | 0-51481 | |
Entity Registrant Name | STRATA SKIN SCIENCES, INC. | |
Entity Central Index Key | 0001051514 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 13-3986004 | |
Entity Address, Address Line One | 5 Walnut Grove Drive | |
Entity Address, Address Line Two | Suite 140 | |
Entity Address, City or Town | Horsham | |
Entity Address, State or Province | PA | |
Entity Address, Postal Zip Code | 19044 | |
City Area Code | 215 | |
Local Phone Number | 619-3200 | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Trading Symbol | SSKN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 34,364,679 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 13,047 | $ 10,604 |
Restricted cash | 0 | 7,508 |
Accounts receivable, net of allowance for doubtful accounts of $248 and $274, respectively | 3,151 | 2,944 |
Inventories | 3,225 | 3,444 |
Prepaid expenses and other current assets | 623 | 331 |
Total current assets | 20,046 | 24,831 |
Property and equipment, net | 6,403 | 5,529 |
Operating lease right-of-use assets, net | 727 | 988 |
Intangible assets, net | 10,546 | 6,345 |
Goodwill | 8,803 | 8,803 |
Other assets | 233 | 282 |
Total assets | 46,758 | 46,778 |
Current liabilities: | ||
Note payable | 0 | 7,275 |
Current portion of long-term debt | 0 | 1,478 |
Accounts payable | 2,480 | 2,764 |
Other accrued liabilities | 5,548 | 4,690 |
Current portion of operating lease liabilities | 359 | 369 |
Deferred revenues | 3,767 | 2,262 |
Total current liabilities | 12,154 | 18,838 |
Long-term liabilities: | ||
Long-term debt, net | 7,282 | 1,050 |
Deferred tax liability | 266 | 254 |
Long-term operating lease liabilities, net | 445 | 710 |
Other liabilities | 428 | 34 |
Total liabilities | 20,575 | 20,886 |
Commitments and contingencies (see Note 15) | ||
Stockholders' equity: | ||
Series C Convertible Preferred Stock, $0.10 par value, 10,000,000 shares authorized; 0 shares issued and outstanding at September 30, 2021 and, December 31, 2020 | 0 | 0 |
Common Stock, $0.001 par value, 150,000,000 shares authorized; 34,364,679, and 33,801,045 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 34 | 34 |
Additional paid-in capital | 246,979 | 244,831 |
Accumulated deficit | (220,830) | (218,973) |
Total stockholders' equity | 26,183 | 25,892 |
Total liabilities and stockholders' equity | $ 46,758 | $ 46,778 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Allowance for doubtful accounts | $ 248 | $ 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) | 34,364,679 | 33,801,045 |
Common stock, shares outstanding (in shares) | 34,364,679 | 33,801,045 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues, net | $ 7,711 | $ 5,613 | $ 20,920 | $ 16,373 |
Cost of revenues | 2,335 | 2,383 | 7,070 | 6,780 |
Gross profit | 5,376 | 3,230 | 13,850 | 9,593 |
Operating expenses: | ||||
Engineering and product development | 371 | 411 | 1,158 | 950 |
Selling and marketing | 3,295 | 2,051 | 9,387 | 6,446 |
General and administrative | 2,175 | 1,929 | 7,085 | 5,921 |
Total operating expenses | 5,841 | 4,391 | 17,630 | 13,317 |
Income (loss) from operations | (465) | (1,161) | (3,780) | (3,724) |
Other income (expense), net: | ||||
Gain on forgiveness of debt | 2,028 | 0 | ||
Interest expense, net | (52) | (21) | (93) | (38) |
Other (expense) income, net | 1,935 | (38) | ||
Income (loss) before income taxes | (517) | (1,182) | (1,845) | (3,762) |
Income tax expense | (4) | (72) | (12) | (207) |
Net loss | $ (521) | $ (1,254) | (1,857) | (3,969) |
Common Shares [Member] | ||||
Other income (expense), net: | ||||
Net loss | $ (1,857) | $ (3,947) | ||
Loss per share - basic (in dollars per share) | $ (0.02) | $ (0.04) | $ (0.05) | $ (0.12) |
Loss per share - diluted (in dollars per share) | $ (0.02) | $ (0.04) | $ (0.05) | $ (0.12) |
Weighted average shares outstanding - basic (in shares) | 34,150,438 | 33,754,909 | 33,944,321 | 33,551,070 |
Weighted average shares outstanding - diluted (in shares) | 34,150,438 | 33,754,909 | 33,944,321 | 33,551,070 |
Preferred Series C Shares [Member] | ||||
Other income (expense), net: | ||||
Net loss | $ 0 | $ (22) | ||
Loss per share - basic (in dollars per share) | $ 0 | $ (43.73) | ||
Loss per share - diluted (in dollars per share) | $ 0 | $ (43.73) | ||
Weighted average shares outstanding - basic (in shares) | 0 | 491 | ||
Weighted average shares outstanding - diluted (in shares) | 0 | 491 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT 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 | Convertible Preferred Stock - Series C [Member] |
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, 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] | ||||||
Net loss | (3,969) | $ (22) | ||||
Ending balance at Sep. 30, 2020 | $ 0 | $ 34 | 244,423 | (218,530) | 25,927 | |
Ending balance (in shares) at Sep. 30, 2020 | 0 | 33,754,909 | ||||
Beginning balance at Mar. 31, 2020 | $ 0 | $ 34 | 243,610 | (215,596) | 28,048 | |
Beginning balance (in shares) at Mar. 31, 2020 | 0 | 33,714,362 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | $ 0 | 410 | 0 | 410 | |
Issuance of restricted stock | $ 0 | $ 0 | 0 | 0 | 0 | |
Issuance of restricted stock (in shares) | 0 | 40,547 | ||||
Net loss | $ 0 | $ 0 | 0 | (1,680) | (1,680) | |
Ending balance at Jun. 30, 2020 | $ 0 | $ 34 | 244,020 | (217,276) | 26,778 | |
Ending balance (in shares) at Jun. 30, 2020 | 0 | 33,754,909 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | $ 0 | 403 | 0 | 403 | |
Net loss | 0 | 0 | 0 | (1,254) | (1,254) | |
Ending balance at Sep. 30, 2020 | $ 0 | $ 34 | 244,423 | (218,530) | 25,927 | |
Ending balance (in shares) at Sep. 30, 2020 | 0 | 33,754,909 | ||||
Beginning balance at Dec. 31, 2020 | $ 34 | 244,831 | (218,973) | 25,892 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 33,801,045 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | 662 | 0 | 662 | ||
Issuance of restricted stock | $ 0 | 0 | 0 | 0 | ||
Issuance of restricted stock (in shares) | 16,260 | |||||
Net loss | $ 0 | 0 | (2,418) | (2,418) | ||
Ending balance at Mar. 31, 2021 | $ 34 | 245,493 | (221,391) | 24,136 | ||
Ending balance (in shares) at Mar. 31, 2021 | 33,817,305 | |||||
Beginning balance at Dec. 31, 2020 | $ 34 | 244,831 | (218,973) | 25,892 | ||
Beginning balance (in shares) at Dec. 31, 2020 | 33,801,045 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net loss | (1,857) | $ 0 | ||||
Ending balance at Sep. 30, 2021 | $ 34 | 246,979 | (220,830) | 26,183 | ||
Ending balance (in shares) at Sep. 30, 2021 | 34,364,679 | |||||
Beginning balance at Mar. 31, 2021 | $ 34 | 245,493 | (221,391) | 24,136 | ||
Beginning balance (in shares) at Mar. 31, 2021 | 33,817,305 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | 581 | 581 | |||
Issuance of restricted stock | $ 0 | 0 | 0 | |||
Issuance of restricted stock (in shares) | 71,934 | |||||
Net loss | $ 0 | 0 | 1,082 | 1,082 | ||
Ending balance at Jun. 30, 2021 | $ 34 | 246,074 | (220,309) | 25,799 | ||
Ending balance (in shares) at Jun. 30, 2021 | 33,889,239 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Stock-based compensation | $ 0 | 320 | 0 | 320 | ||
Exercise of stock options | $ 0 | 0 | 0 | 0 | ||
Exercise of stock options (in shares) | 329,076 | |||||
Issuance of restricted stock | $ 0 | 0 | 0 | 0 | ||
Issuance of restricted stock (in shares) | 146,364 | |||||
Issuance of warrants | $ 0 | 585 | 0 | 585 | ||
Issuance of warrants (in shares) | 0 | |||||
Net loss | (521) | (521) | ||||
Ending balance at Sep. 30, 2021 | $ 34 | $ 246,979 | $ (220,830) | $ 26,183 | ||
Ending balance (in shares) at Sep. 30, 2021 | 34,364,679 |
CONDENSED CONSOLIDATED STATEM_3
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 | $ (1,857) | $ (3,969) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 2,689 | 2,793 |
Amortization of right-of-use asset | 261 | 242 |
Provision (recoveries) for doubtful accounts | (26) | 65 |
Stock-based compensation | 1,563 | 1,243 |
Loss on disposal of property and equipment | 73 | 23 |
Gain on forgiveness of debt | (2,028) | 0 |
Deferred taxes | 12 | 207 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (181) | 1,811 |
Inventories | 219 | (475) |
Prepaid expenses and other assets | (243) | 98 |
Accounts payable | (284) | 1,608 |
Other accrued liabilities | 859 | (576) |
Other liabilities | (88) | (126) |
Operating lease liabilities | (275) | (226) |
Deferred revenues | 145 | (968) |
Net cash provided by operating activities | 839 | 1,750 |
Cash Flows From Investing Activities: | ||
Purchase of property and equipment | (2,523) | (1,447) |
Cash paid in connection with Ra Medical asset acquisition | (3,473) | 0 |
Net cash used in investing activities | (5,996) | (1,447) |
Cash Flows From Financing Activities | ||
Proceeds from Senior Term Facility borrowings, net of fees | 7,867 | 0 |
Repayment of note payable | (7,275) | 0 |
Proceeds from (repayment of) long-term debt | (500) | 2,528 |
Net cash provided by financing activities | 92 | 2,528 |
Net (decrease) increase in cash and cash equivalents and restricted cash | (5,065) | 2,831 |
Cash, cash equivalents and restricted cash, beginning of period | 18,112 | 15,629 |
Cash, cash equivalents and restricted cash, end of period | 13,047 | 18,460 |
Cash and cash equivalents | 13,047 | 11,063 |
Restricted cash | 0 | 7,397 |
Supplemental information of cash and non-cash transactions: | ||
Cash paid for interest | 109 | 157 |
Fair value of warrants issued in connection with debt | 585 | 0 |
Assumed deferred revenue in connection with Ra Medical asset acquisition | $ 1,841 | $ 0 |
The Company
The Company | 9 Months Ended |
Sep. 30, 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® and Pharos® excimer lasers 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 September 30, 2021, there were 880 XTRAC systems placed in dermatologists In September 2020, the Company signed a direct distribution agreement with its 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 its Chinese distributor for a combination of direct capital sales and recurring revenues for the country of China. In the first quarter of 2021, the Company introduced its Home by XTRAC™ business on a pilot test basis, by 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 has discontinued the pilot program and is evaluating this potential business opportunity. 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. The Company does not know the extent of the impact on its customers, including their potential for permanent closure. While many offices have reopened, the ongoing impact of the COVID-19 pandemic and its variants 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 and its variants, continued or renewed 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 which the Company depends upon to provide a steady source of components to manufacture and repair our devices. To mitigate the impact of COVID-19 the Company took a variety of measures to ensure the availability and functioning of its critical infrastructure by implementing business continuity plans. 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, the Company provided face masks for employees at facilities significantly impacted and required 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. In October 2021, the Company implemented a policy whereby all Company employees are required to be vaccinated or complete weekly COVID-19 testing. 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 in 2020. See Note 2, Liquidity Supply chain disruptions which began during the pandemic have continued and may continue for the foreseeable future. While the Company’s operations have not been materially impacted by the general trends in supply chain problems, the Company continues to monitor and assess potential risks . 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 nine months ended September 30, 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 the Company’s 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 the Company’s 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 nine months ended September 30, 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 September 30, 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 analysis 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 September 30, 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 earnings (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 the 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 were outstanding as of September 30, 2021 and 2020. 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 Company considered its Series C Convertible Preferred Stock to be participating securities in the presentation of earnings (loss) per share. For the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 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 were anti-dilutive. The following table sets forth the potentially dilutive securities outstanding as of September 30, 2021 and 2020 that have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: September 30, 2021 2020 Common stock purchase warrants 373,626 149,901 Restricted stock units 144,497 119,330 Common stock options 3,963,889 4,908,038 Total 4,482,012 5,177,269 Accounting Pronouncements Recently Adopted In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . ASU 2019-12 eliminated certain exceptions and changed guidance on other matters. The exceptions relate to the allocation of income taxes in separate company financial statements, tax accounting for equity method investments and accounting for income taxes when the interim period year-to-date loss exceeds the anticipated full year loss. Changes relate to the accounting for franchise taxes that are income-based and non-income-based, determining if a step up in tax basis is part of a business combination or if it is a separate transaction, when enacted tax law changes should be included in the annual effective tax rate computation, and the allocation of taxes in separate company financial statements to a legal entity that is not subject to income tax. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The adoption of ASU No. 2019-12 on January 1, 2021 did not have a material effect on the Company’s condensed consolidated financial statements. 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. The Company continues 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 its 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 SU "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, 2023 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. In May 2021, the FASB issued ASU 2021-04, Earnings per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges or Freestanding Equity-Classified Written Call Options. |
Liquidity
Liquidity | 9 Months Ended |
Sep. 30, 2021 | |
Liquidity [Abstract] | |
Liquidity | Note 2 Liquidity The Company has been negatively impacted by the ongoing COVID-19 pandemic, has historically experienced recurring losses, has been dependent on raising capital from the sale of securities in order to continue to operate and refinanced its debt at a lower interest rate. During the COVID-19 pandemic, the Company received cash proceeds from the PPP loan, which was forgiven, and the EIDL loan (each as defined in Note 10 below) that was repaid at the time the senior credit facility entered into with MidCap Financial Trust in September 2021 (see Note 10). Additionally, in October 2021, the Company entered into an equity distribution agreement with an investment bank under which the Company may sell up to $11,000 of its common stock in registered “at-the-market” offerings (see Note 16). 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, will be sufficient to satisfy our working capital needs, capital asset purchases, outstanding commitments and other liquidity requirements associated with its existing operations through the next 12 months following the date of the issuance of these unaudited interim condensed consolidated financial statements. However, the negative impact of the ongoing COVID-19 outbreak on the financial markets and supply chain disruptions could interfere with the Company’s ability to access financing and on favorable terms. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition [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 physicians. 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 September 30, 2021, the aggregate amount of the transaction price allocated to remaining performance obligations was $1,549, and the Company expects to recognize $1,148 of the remaining performance obligations within one year and the balance over one 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 September 30, 2021, the $1,148 of short-term contract liabilities is presented as deferred revenues and the $401 of long-term contract liabilities is presented within Other Liabilities on the condensed consolidated balance sheet. For the three and nine months ended September 30, 2021 and 2020, the Company recognized $19 and $73, and $52 and $162 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 and nine months ended September 30, 2021, and 2020, the Company recorded such reimbursements in the amounts of $199 and $542, and $160 and $414, respectively. The following tables present the Company’s revenue disaggregated by geographical region for the three and nine months ended September 30, 2021 and 2020, respectively. Domestic refers to revenue from customers based in the United States, and substantially all foreign revenue is derived from sales to our distributors, primarily in Asia. Three Months Ended September 30, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 5,370 $ 519 $ 5,889 Foreign 340 1,482 1,822 Total $ 5,710 $ 2,001 $ 7,711 Nine Months Ended September 30, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 14,923 $ 1,113 $ 16,036 Foreign 918 3,966 4,884 Total $ 15,841 $ 5,079 $ 20,920 Three Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 3,690 $ 261 $ 3,951 Foreign 145 1,517 1,662 Total $ 3,835 $ 1,778 $ 5,613 Nine Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 11,957 $ 701 $ 12,658 Foreign 375 3,340 3,715 Total $ 12,332 $ 4,041 $ 16,373 The following table summarizes the Company’s expected future undiscounted fixed treatment code payments from international recurring revenue customers as of September 30, 2021: Remaining 2021 $ 390 2022 1,556 2023 1,479 2024 1,076 2025 362 Thereafter - Total $ 4,863 |
Acquisition of Pharos Assets an
Acquisition of Pharos Assets and Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Acquisition of Pharos Assets and Liabilities [Abstract] | |
Acquisition of Pharos Assets and Liabilities | Note 4 Acquisition of Pharos Assets and Liabilities In August 2021, the Company acquired certain assets and liabilities related to the U.S. dermatology Pharos business from Ra Medical Systems, Inc. (“Ra Medical”). Ra Medical’s Pharos excimer laser system holds FDA clearance to treat chronic skin diseases, including psoriasis, vitiligo, atopic dermatitis and leukoderma. The acquisition of these assets and liabilities allows the Company to market its full business solutions to Ra Medical’s existing customer base comprised of 400 dermatology practices offering opportunities to increase its recurring revenue base and a pathway to gain additional placements for the Company’s XTRAC excimer laser system. The purchase price of $3,700 was paid in cash at the time of acquisition. In addition, the Company assumed certain extended warranty service contracts associated with acquired laser system products. Concurrent with the purchase of the net assets, the Company and Ra Medical entered into a services agreement whereby Ra Medical will provide certain transitional services for the Company as it integrates the acquired assets into the Company. The Company determined this transaction represented an asset acquisition as substantially all of the value was in the acquired customer list intangible asset as defined by ASC 805, Business Combinations Consideration: Cash payment $ 3,700 Transaction costs 57 Total consideration $ 3,757 Assets acquired: Inventory $ 284 Customer lists 5,314 Total assets acquired $ 5,598 Liabilities assumed: Deferred revenues - service contracts $ 1,841 Total liabilities assumed $ 1,841 Net assets acquired $ 3,757 The customer lists intangible asset is being amortized on a straight-line basis over a period of twelve years. As the transaction was accounted for as an asset acquisition, the Company allocated consideration paid to the inventory acquired and the deferred revenue assumed with the remaining consideration paid allocated to the customer lists intangible asset which also equal its estimated fair value. The intangible asset was valued using an excess earnings model. Significant assumptions used in the excess earnings model include estimated customer sales growth, customer attrition, and weighted average cost of capital of 3%, 5% and 17%, respectively. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2021 | |
Inventories [Abstract] | |
Inventories | Note 5 Inventories: Inventories consist of: September 30, 2021 December 31, 2020 Raw materials and work-in-process $ 3,024 $ 2,949 Finished goods 201 495 Total inventories $ 3,225 $ 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 | 9 Months Ended |
Sep. 30, 2021 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 6 Property and Equipment, net: Property and equipment consist of: September 30, 2021 December 31, 2020 Lasers placed-in-service $ 25,190 $ 22,942 Equipment, computer hardware and software 224 146 Furniture and fixtures 236 243 Leasehold improvements 43 43 25,693 23,374 Accumulated depreciation and amortization (19,290 ) (17,845 ) Property and equipment, net $ 6,403 $ 5,529 Depreciation and related amortization expense was $575 and $1,576, and $454 and $1,535 for the three and nine months ended September 30, 2021, and 2020, respectively. During the nine months ended September 30, 2021, the Company recognized a $73 loss on the disposal of property and equipment with an original cost of $204 and accumulated depreciation of $131 at the time of disposal. |
Intangible Assets, net
Intangible Assets, net | 9 Months Ended |
Sep. 30, 2021 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | Note 7 Intangible Assets, net: Set forth below is a detailed listing of definite-lived intangible assets as of September 30, 2021: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (3,562 ) $ 2,138 Product technology 2,000 (2,000 ) - Customer relationships 6,900 (4,313 ) 2,587 Tradenames 1,500 (938 ) 562 Pharos customer list 5,314 (55 ) 5,259 $ 21,414 $ (10,868 ) $ 10,546 The following table is a detailed listing of definite-lived intangible assets as of December 31, 2020: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (3,135 ) $ 2,565 Product technology 2,000 (2,000 ) - Customer relationships 6,900 (3,795 ) 3,105 Tradenames 1,500 (825 ) 675 $ 16,100 $ (9,755 ) $ 6,345 In August 2021, the Company acquired customer lists in connection with the Ra Medical asset acquisition with an estimated fair value of $5,314 at the time of acquisition (see Note 3). Amortization expense was $408 and $1,113, and $353 and $1,258 for the three and nine months ended September 30, 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 nine months ended September 30, 2021. Estimated amortization expense for the above amortizable intangible assets for future periods is as follows: Remaining 2021 $ 463 2022 1,853 2023 1,853 2024 1,853 2025 1,148 Thereafter 3,376 Total $ 10,546 |
Other Accrued Liabilities
Other Accrued Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Note 8 Other Accrued Liabilities: Other accrued liabilities consist of: September 30, 2021 December 31, 2020 Accrued warranty, current $ 54 $ 87 Accrued compensation, including commissions and vacation 1,578 891 Accrued state sales, use and other taxes 3,152 3,105 Accrued professional fees and other accrued liabilities 764 607 Total other accrued liabilities $ 5,548 $ 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, and the appeal is in process. 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. 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 three The activity in the warranty accrual during the three and nine months ended September 30, 2021, and 2020, is summarized as follows: Three Months Ended, September 30, Nine Months Ended, September 30, 2021 2020 2021 2020 Accrual at beginning of period $ 98 $ 139 $ 113 $ 232 Additions charged to warranty expense 11 37 52 46 Expiring warranties/claimed satisfied (28 ) (41 ) (84 ) (143 ) Total 81 135 81 135 Less: current portion (54 ) (107 ) (54 ) (107 ) Total long-term accrued warranty costs $ 27 $ 28 $ 27 $ 28 |
Note Payable
Note Payable | 9 Months Ended |
Sep. 30, 2021 | |
Note Payable [Abstract] | |
Note Payable | Note 9 Note Payable On December 30, 2020, the Company had 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 were secured by an Assignment and Pledge of Time Deposit, under which the Company had 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 was due on December 30, 2021 with no penalties for prepayments. The interest rate is fixed at 1.40%. The secured time deposit had a fixed interest rate of 0.40%. On September 30, 2021, the Company repaid the Note with the proceeds from the Time Deposit. |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2021 | |
Long-term Debt [Abstract] | |
Long-term Debt | Note 10 Long-term Debt: Senior Term Facility On September 30 2021, the Company entered into a credit and security agreement with MidCap Financial Trust, also acting as the administrative agent, and the lenders identified therein (“Senior Term Facility”). The Senior Term Facility provides for an $8.0 million senior term loan that was drawn upon by the Company upon executing the agreement. On September 30, 2021, the Company also repaid the outstanding principal and interest for its Note Payable (Note 9) and the Economic Injury Disaster Loan. Borrowings under the Senior Term Facility bear interest at LIBOR (with a LIBOR floor rate of 0.50%) plus 7.50% and matures on September 1, 2026, unless terminated earlier. The Company is obligated to make monthly interest-only payments through September 30, 2024. From October 1, 2024 to the date of maturity, the Company will make 24 equal monthly principal payments plus interest and all borrowings are secured by substantially all of the Company’s assets. The Company may voluntarily prepay the outstanding term loan, with such prepayment at least $5.0 million, at any time upon 30 days’ written notice. Upon prepayment, the Company will be required to pay a prepayment fee equal to (i) 4.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made within twelve months of September 30, 2021, (ii) 3.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made between twelve months and twenty-four months after September 30, 2021, (iii) 2.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made between twenty-four months and thirty-six months after September 30, 2021, or (iv) 1.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made after thirty-six months after September 30, 2021 and prior to the maturity date. The Senior Term Facility contains certain customary representations and warranties, affirmative covenants and conditions. The Senior Term Facility also contains a number of negative covenants that subject the Company to certain exceptions and waivers and restrictions, as defined in the agreement. In addition, the Senior Term Facility contains a quarterly financial covenant that requires the Company to not have less than $24.0 million of net revenue for the trailing 12-month period as of September 30, 2021, with compliance measured on the last day of each fiscal quarter beginning on September 30, 2021. The minimum net revenue threshold will increase to $30.0 million by December 31, 2023. At September 30, 2021, the Company was in compliance with all financial and nonfinancial covenants within the Senior Term Facility. At December 31, 2021, the minimum net revenue threshold will be $25.0 million. The Senior Term Facility contains customary indemnification obligations and customary events of default, including, among other things, (i) nonpayment, (ii) breach of warranty, (iii) nonperformance of covenants and obligations, (iv) default on other indebtedness, (v) judgments, (iv) change of control, (vii) bankruptcy and insolvency, (viii) impairment of security, (xi) regulatory matters, (xii) failure to remain a publicly traded company and (xiii) material adverse event. Where an event of default arises from certain bankruptcy events, the commitments shall automatically and immediately terminate and the principal of, and interest then outstanding on, all of the loans shall become immediately due and payable. Subject to certain notice requirements and other conditions, upon the occurrence of other events of default, including the occurrence of a condition having or reasonably likely to have a material adverse effect, commitments may be terminated and the principal of, and interest then outstanding on, all of the loans may become immediately due and payable. On September 30, 2021, no event of default had occurred and the Company believed that events or conditions having a material adverse effect, giving rise to an acceleration of any amounts outstanding under the Credit Agreement, had not occurred and was remote. In connection with entering into the Senior Term Facility, the Company issued an affiliate of the lender a warrant to purchase 373,626 shares of the Company's common stock at an initial exercise price of $1.82 per share. The warrants are equity classified and are exercisable at any time on or prior to the tenth anniversary of their issue date. The estimated fair value of the warrants was $0.6 million and determined using the Black-Scholes option pricing model. The key assumptions used in the Black-Scholes option pricing model were (i) an expected term of ten years, (ii) expected volatility of 88.6%, (iii) a risk-free rate of 1.5% and (iv) no estimated dividend yield. In addition, the Company incurred third party costs and lender fees of $0.1 million. The proceeds were allocated on a basis that approximates the relative fair value method. The fair value of the warrants and fees incurred were recorded as a debt discount and are being recognized as interest expense over the life of the Senior Term Facility using the effective-interest method. No interest or amortization of debt discount was recognized during the three and nine months ended September 30, 2021 in connection with the Senior Term Facility. Future minimum principal payments at September 30, 2021 are as follows (in thousands): 2024 $ 1,000 2025 4,000 2026 3,000 Total $ 8,000 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 would have matured on May 1, 2022 and bore an interest rate of 1% per annum. Payments of principal and interest of any unforgiven balance was scheduled to commence December 1, 2020, but was deferred until the SBA approved of the forgiveness amount. In the second quarter of 2021, the Company received notification that the PPP loan had been forgiven. In the second quarter, 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 accrued 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 was 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 was not required to be refinanced by the PPP loan. On September 30, 2021, the Company repaid this loan. |
Stock-based Compensation
Stock-based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Stock-based Compensation [Abstract] | |
Stock-based Compensation | Note 11 Stock-based Compensation: On October 27, 2016, the Company’s stockholders approved the Company’s adoption of the new 2016 Omnibus Incentive Stock Plan (“2016 Plan”) having 2,058,880 shares available for issuance in respect of awards made thereunder. The Company terminated the 2013 Stock Incentive Plan in October 2016. On May 29, 2018, the Company’s stockholders approved the Company’s amendment to the 2016 Plan to increase the number of the Company’s common stock available for grants under the plan by 3,134,365. On July 7, 2021, the shareholders approved an amendment to the 2016 Omnibus Incentive Plan to increase the number of shares of common stock for issuance by 2,700,000. As of September 30, 2021, there were 3,853,038 shares of common stock remaining available for issuance for awards under the 2016 Plan. The Company measures share‑based awards at their grant‑date fair value and records compensation expense on a straight‑line basis over the vesting period of the awards. The Company recorded share‑based compensation expense of $320 and $1,563 , $403 and $1,243 for the three and nine months ended September 30, 2021, and 2020, respectively and within general and administrative expenses in the accompanying unaudited condensed consolidated statements of operations. Stock Options The following table summarizes stock option activity for the nine months ended September 30, 2021: Number of shares Weighted average exercise price per share Weighted average remaining contractual term (years) Outstanding at January 1, 2021 5,292,888 $ 1.87 Granted 2,043,714 $ 1.67 Exercised (1,557,628 ) $ 1.12 Forfeited/expired (1,815,085 ) $ 1.84 Outstanding at September 30, 2021 3,963,889 $ 2.05 8.2 Exercisable at September 30, 2021 1,236,841 $ 2.77 5.6 The weighted‑average grant date fair value of options granted was $1.24 per share during the nine months ended September 30, 2021. There were no options granted during the nine months ended September 30, 2020. As of September 30, 2021, the total unrecognized compensation expense related to unvested stock option awards was $2,720, which the Company expects to recognize over a weighted‑average period of approximately 2.4 years. The aggregate intrinsic value of options outstanding and options exercisable at September 30, 2021 was $558 and $53 , respectively. For the nine months ended September 30, 2021, the fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below: Expected volatility 90.4 % Risk‑free interest rate 1.0 % Expected life (in years) 5.9 Expected dividend yield 0 % Fair value of common stock $ 1.68 During the nine months ended September 30, 2021, there were 1,557,628 options that were exercised on a cashless basis at $1.12 per share resulting in the net issuance of 329,076 shares of common stock. 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. Restricted Stock Units Restricted stock unit unvested are summarized in the following table: Number of shares Weighted average grant date fair value Unvested at January 1, 2021 - $ - Granted 290,861 $ 1.44 Vested (146,364 ) $ 1.42 Unvested at September 30, 2021 144,497 $ 1.45 As of September 30, 2021, the total unrecognized compensation expense related to unvested stock option awards was $167, which the Company expects to recognize over a weighted‑average period of approximately 0.8 years. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Taxes [Abstract] | |
Income Taxes | Note 12 Income Taxes: The Company accounts for income taxes using the asset and liability method. 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 $12, and $72 and $207 for the three and nine months ended September 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. The February 2014, July 2014, June 2015 and May 2018 equity raises by the Company will limit the annual use of these net operating loss carryforwards. 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 | 9 Months Ended |
Sep. 30, 2021 | |
Business Segments [Abstract] | |
Business Segments | Note 13 Business Segments: The Company 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 the Company’s business segments for the periods indicated below: Three Months Ended September 30, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 5,710 $ 2,001 $ 7,711 Costs of revenues 1,512 823 2,335 Gross profit 4,198 1,178 5,376 Gross profit % 73.5 % 58.9 % 69.7 % Allocated operating expenses: Engineering and product development 333 38 371 Selling and marketing 3,094 201 3,295 Unallocated operating expenses - - 2,175 3,427 239 5,841 Income (loss) from operations 771 939 (465 ) Interest expense, net - - (52 ) Income (loss) before income taxes $ 771 $ 939 $ (517 ) Nine Months Ended September 30, 2021 Dermatology Recurring Dermatology Procedures Equipment TOTAL Revenues $ 15,841 $ 5,079 $ 20,920 Costs of revenues 4,648 2,422 7,070 Gross profit 11,193 2,657 13,850 Gross profit % 70.7 % 52.3 % 66.2 % Allocated operating expenses: Engineering and product development 1,013 145 1,158 Selling and marketing 8,805 582 9,387 Unallocated operating expenses - - 7,085 9,818 727 17,630 Income (loss) from operations 1,375 1,930 (3,780 ) Gain on forgiveness of debt - - 2,028 Interest expense, net - - (93 ) Income (loss) before income taxes $ 1,375 $ 1,930 $ (1,845 ) Three Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 3,835 $ 1,778 $ 5,613 Costs of revenues 1,368 1,015 2,383 Gross profit 2,467 763 3,230 Gross profit % 64.3 % 42.9 % 57.5 % Allocated operating expenses: Engineering and product development 329 82 411 Selling and marketing 1,883 168 2,051 Unallocated operating expenses - - 1,929 2,212 250 4,391 Income (loss) from operations 255 513 (1,161 ) Interest expense, net - - (21 ) Income (loss) before income taxes $ 255 $ 513 $ (1,182 ) Nine Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 12,332 $ 4,041 $ 16,373 Costs of revenues 4,534 2,246 6,780 Gross profit 7,798 1,795 9,593 Gross profit % 63.2 % 44.4 % 58.6 % Allocated operating expenses: Engineering and product development 828 122 950 Selling and marketing 6,021 425 6,446 Unallocated operating expenses - - 5,921 6,849 547 13,317 Income (loss) from operations 949 1,248 (3,724 ) Interest expense, net - - (38 ) Income (loss) before income taxes $ 949 $ 1,248 $ (3,762 ) |
Significant Customer Concentrat
Significant Customer Concentration | 9 Months Ended |
Sep. 30, 2021 | |
Significant Customer Concentration [Abstract] | |
Significant Customer Concentration | Note 14 Significant Customer Concentration: For the three months ended September 30, 2021, there were no customers representing more than 10% of revenues. For the nine months ended September 30, 2021, there was one customer whose sales were $2,220, or 10.6% of total revenues for such period. There was one other customer that represented 10.5% of accounts receivable as of September 30, 2021. For the three and nine months ended September 30, 2020, revenues from the sales to the Company’s international master distributor were $846 and $2,149, or 15.1% and 13.1%, respectively, of total revenues for such periods. For the three months ended September 30, 2020 revenues from another distributor were $632 or 11.3% of total revenue for the period. No other distributor or customer represented more than 10% of total Company revenues for the three and nine months ended September 30, 2020. |
Commitments
Commitments | 9 Months Ended |
Sep. 30, 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 adopted the short-term accounting election for leases with a duration of less than one year. The Company leases its facilities and certain IT and office equipment under non-cancellable operating leases. All of the Company's leasing arrangements are classified as operating leases with remaining lease terms ranging from 1 to 4 years, and one facility lease has a renewal option for two years. Renewal options have been excluded from the determination of the lease term as they are not reasonably certain of exercise. On May 1, 2019, the Company entered into an addendum with FR National Life, LLC for the Carlsbad, California facility for five years which began on October 1, 2019. Included in cash flows provided by operations for the nine months ended September 30, 2021, and 2020, there was amortization of right-of-use assets of $261 and $242, respectively. Operating lease costs were $108 and $331, and $112 and $336 for the three and nine months ended September 30, 2021, and 2020, respectively. Cash paid for amounts included in the measurement of operating lease liabilities was $113 and $344 for the three and nine months ended September 30, 2021, and 2020, respectively. As of September 30, 2021, the incremental borrowing rate was 9.76% and the weighted average remaining lease term was 2.4 years. The following table summarizes the Company’s operating lease maturities as of September 30, 2021: For the year ending December 31 Amount Remaining 2021 $ 122 2022 371 2023 242 2024 186 Total remaining lease payments 921 Less: imputed interest (117 ) Total lease liabilities $ 804 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. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 16 Subsequent Events: In October 2021, the Company entered into an equity distribution agreement under which the Company may sell up to $11.0 million of its shares of common stock in registered “at-the-market” offerings. If the Company chooses, the shares will be offered at prevailing market prices, and the Company will pay commissions of up to 3.0% of the gross proceeds from the sale of shares sold through the Company’s agent, which may act as an agent and/or principal. The Company has no obligation to sell any shares under this agreement and may, at any time, suspend solicitations under this agreement. |
The Company (Policies)
The Company (Policies) | 9 Months Ended |
Sep. 30, 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 nine months ended September 30, 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 the Company’s 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 the Company’s 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 nine months ended September 30, 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 September 30, 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 analysis 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 September 30, 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 earnings (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 the 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 were outstanding as of September 30, 2021 and 2020. 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 Company considered its Series C Convertible Preferred Stock to be participating securities in the presentation of earnings (loss) per share. For the three and nine months ended September 30, 2021 and the three and nine months ended September 30, 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 were anti-dilutive. The following table sets forth the potentially dilutive securities outstanding as of September 30, 2021 and 2020 that have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: September 30, 2021 2020 Common stock purchase warrants 373,626 149,901 Restricted stock units 144,497 119,330 Common stock options 3,963,889 4,908,038 Total 4,482,012 5,177,269 |
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 . ASU 2019-12 eliminated certain exceptions and changed guidance on other matters. The exceptions relate to the allocation of income taxes in separate company financial statements, tax accounting for equity method investments and accounting for income taxes when the interim period year-to-date loss exceeds the anticipated full year loss. Changes relate to the accounting for franchise taxes that are income-based and non-income-based, determining if a step up in tax basis is part of a business combination or if it is a separate transaction, when enacted tax law changes should be included in the annual effective tax rate computation, and the allocation of taxes in separate company financial statements to a legal entity that is not subject to income tax. The new standard is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, with early adoption permitted. The adoption of ASU No. 2019-12 on January 1, 2021 did not have a material effect on the Company’s condensed consolidated financial statements. 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. The Company continues 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 its 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 SU "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, 2023 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. In May 2021, the FASB issued ASU 2021-04, Earnings per Share (Topic 260), Debt – Modifications and Extinguishments (Subtopic 470-50), Compensation – Stock Compensation (Topic 718), and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges or Freestanding Equity-Classified Written Call Options. |
The Company (Tables)
The Company (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
The Company [Abstract] | |
Antidilutive Securities Excluded from Computation of Earnings (Loss) Per Share | The following table sets forth the potentially dilutive securities outstanding as of September 30, 2021 and 2020 that have been excluded from the loss per share calculation as their inclusion would have been anti-dilutive: September 30, 2021 2020 Common stock purchase warrants 373,626 149,901 Restricted stock units 144,497 119,330 Common stock options 3,963,889 4,908,038 Total 4,482,012 5,177,269 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue Recognition [Abstract] | |
Disaggregation of Revenue | The following tables present the Company’s revenue disaggregated by geographical region for the three and nine months ended September 30, 2021 and 2020, respectively. Domestic refers to revenue from customers based in the United States, and substantially all foreign revenue is derived from sales to our distributors, primarily in Asia. Three Months Ended September 30, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 5,370 $ 519 $ 5,889 Foreign 340 1,482 1,822 Total $ 5,710 $ 2,001 $ 7,711 Nine Months Ended September 30, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 14,923 $ 1,113 $ 16,036 Foreign 918 3,966 4,884 Total $ 15,841 $ 5,079 $ 20,920 Three Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 3,690 $ 261 $ 3,951 Foreign 145 1,517 1,662 Total $ 3,835 $ 1,778 $ 5,613 Nine Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Domestic $ 11,957 $ 701 $ 12,658 Foreign 375 3,340 3,715 Total $ 12,332 $ 4,041 $ 16,373 |
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 September 30, 2021: Remaining 2021 $ 390 2022 1,556 2023 1,479 2024 1,076 2025 362 Thereafter - Total $ 4,863 |
Acquisition of Pharos Assets _2
Acquisition of Pharos Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Acquisition of Pharos Assets and Liabilities [Abstract] | |
Purchase Price Allocation | The purchase price of $3,700 was paid in cash at the time of acquisition. In addition, the Company assumed certain extended warranty service contracts associated with acquired laser system products. Concurrent with the purchase of the net assets, the Company and Ra Medical entered into a services agreement whereby Ra Medical will provide certain transitional services for the Company as it integrates the acquired assets into the Company. The Company determined this transaction represented an asset acquisition as substantially all of the value was in the acquired customer list intangible asset as defined by ASC 805, Business Combinations Consideration: Cash payment $ 3,700 Transaction costs 57 Total consideration $ 3,757 Assets acquired: Inventory $ 284 Customer lists 5,314 Total assets acquired $ 5,598 Liabilities assumed: Deferred revenues - service contracts $ 1,841 Total liabilities assumed $ 1,841 Net assets acquired $ 3,757 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventories [Abstract] | |
Inventories | Inventories consist of: September 30, 2021 December 31, 2020 Raw materials and work-in-process $ 3,024 $ 2,949 Finished goods 201 495 Total inventories $ 3,225 $ 3,444 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, Net | Property and equipment consist of: September 30, 2021 December 31, 2020 Lasers placed-in-service $ 25,190 $ 22,942 Equipment, computer hardware and software 224 146 Furniture and fixtures 236 243 Leasehold improvements 43 43 25,693 23,374 Accumulated depreciation and amortization (19,290 ) (17,845 ) Property and equipment, net $ 6,403 $ 5,529 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Intangible Assets, net [Abstract] | |
Definite-lived Intangible Assets | Set forth below is a detailed listing of definite-lived intangible assets as of September 30, 2021: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (3,562 ) $ 2,138 Product technology 2,000 (2,000 ) - Customer relationships 6,900 (4,313 ) 2,587 Tradenames 1,500 (938 ) 562 Pharos customer list 5,314 (55 ) 5,259 $ 21,414 $ (10,868 ) $ 10,546 The following table is a detailed listing of definite-lived intangible assets as of December 31, 2020: Balance Accumulated Amortization Intangible assets, net Core technology $ 5,700 $ (3,135 ) $ 2,565 Product technology 2,000 (2,000 ) - Customer relationships 6,900 (3,795 ) 3,105 Tradenames 1,500 (825 ) 675 $ 16,100 $ (9,755 ) $ 6,345 |
Finite-lived Intangible Assets Amortization Expense | Estimated amortization expense for the above amortizable intangible assets for future periods is as follows: Remaining 2021 $ 463 2022 1,853 2023 1,853 2024 1,853 2025 1,148 Thereafter 3,376 Total $ 10,546 |
Other Accrued Liabilities (Tabl
Other Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Other Accrued Liabilities [Abstract] | |
Other Accrued Liabilities | Other accrued liabilities consist of: September 30, 2021 December 31, 2020 Accrued warranty, current $ 54 $ 87 Accrued compensation, including commissions and vacation 1,578 891 Accrued state sales, use and other taxes 3,152 3,105 Accrued professional fees and other accrued liabilities 764 607 Total other accrued liabilities $ 5,548 $ 4,690 |
Accrued Warranty Costs Activity | The activity in the warranty accrual during the three and nine months ended September 30, 2021, and 2020, is summarized as follows: Three Months Ended, September 30, Nine Months Ended, September 30, 2021 2020 2021 2020 Accrual at beginning of period $ 98 $ 139 $ 113 $ 232 Additions charged to warranty expense 11 37 52 46 Expiring warranties/claimed satisfied (28 ) (41 ) (84 ) (143 ) Total 81 135 81 135 Less: current portion (54 ) (107 ) (54 ) (107 ) Total long-term accrued warranty costs $ 27 $ 28 $ 27 $ 28 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Long-term Debt [Abstract] | |
Future Minimum Principal Payments | Future minimum principal payments at September 30, 2021 are as follows (in thousands): 2024 $ 1,000 2025 4,000 2026 3,000 Total $ 8,000 |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Stock-based Compensation [Abstract] | |
Stock Option Activity | The following table summarizes stock option activity for the nine months ended September 30, 2021: Number of shares Weighted average exercise price per share Weighted average remaining contractual term (years) Outstanding at January 1, 2021 5,292,888 $ 1.87 Granted 2,043,714 $ 1.67 Exercised (1,557,628 ) $ 1.12 Forfeited/expired (1,815,085 ) $ 1.84 Outstanding at September 30, 2021 3,963,889 $ 2.05 8.2 Exercisable at September 30, 2021 1,236,841 $ 2.77 5.6 |
Estimated Fair Value Weighted Average Assumption | For the nine months ended September 30, 2021, the fair value of each option was estimated on the date of grant using the weighted average assumptions in the table below: Expected volatility 90.4 % Risk‑free interest rate 1.0 % Expected life (in years) 5.9 Expected dividend yield 0 % Fair value of common stock $ 1.68 |
Restricted Stock Unit | Restricted stock unit unvested are summarized in the following table: Number of shares Weighted average grant date fair value Unvested at January 1, 2021 - $ - Granted 290,861 $ 1.44 Vested (146,364 ) $ 1.42 Unvested at September 30, 2021 144,497 $ 1.45 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Segments [Abstract] | |
Segment Reporting Information by Segment | The following tables reflect results of operations from the Company’s business segments for the periods indicated below: Three Months Ended September 30, 2021 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 5,710 $ 2,001 $ 7,711 Costs of revenues 1,512 823 2,335 Gross profit 4,198 1,178 5,376 Gross profit % 73.5 % 58.9 % 69.7 % Allocated operating expenses: Engineering and product development 333 38 371 Selling and marketing 3,094 201 3,295 Unallocated operating expenses - - 2,175 3,427 239 5,841 Income (loss) from operations 771 939 (465 ) Interest expense, net - - (52 ) Income (loss) before income taxes $ 771 $ 939 $ (517 ) Nine Months Ended September 30, 2021 Dermatology Recurring Dermatology Procedures Equipment TOTAL Revenues $ 15,841 $ 5,079 $ 20,920 Costs of revenues 4,648 2,422 7,070 Gross profit 11,193 2,657 13,850 Gross profit % 70.7 % 52.3 % 66.2 % Allocated operating expenses: Engineering and product development 1,013 145 1,158 Selling and marketing 8,805 582 9,387 Unallocated operating expenses - - 7,085 9,818 727 17,630 Income (loss) from operations 1,375 1,930 (3,780 ) Gain on forgiveness of debt - - 2,028 Interest expense, net - - (93 ) Income (loss) before income taxes $ 1,375 $ 1,930 $ (1,845 ) Three Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 3,835 $ 1,778 $ 5,613 Costs of revenues 1,368 1,015 2,383 Gross profit 2,467 763 3,230 Gross profit % 64.3 % 42.9 % 57.5 % Allocated operating expenses: Engineering and product development 329 82 411 Selling and marketing 1,883 168 2,051 Unallocated operating expenses - - 1,929 2,212 250 4,391 Income (loss) from operations 255 513 (1,161 ) Interest expense, net - - (21 ) Income (loss) before income taxes $ 255 $ 513 $ (1,182 ) Nine Months Ended September 30, 2020 Dermatology Recurring Procedures Dermatology Procedures Equipment TOTAL Revenues $ 12,332 $ 4,041 $ 16,373 Costs of revenues 4,534 2,246 6,780 Gross profit 7,798 1,795 9,593 Gross profit % 63.2 % 44.4 % 58.6 % Allocated operating expenses: Engineering and product development 828 122 950 Selling and marketing 6,021 425 6,446 Unallocated operating expenses - - 5,921 6,849 547 13,317 Income (loss) from operations 949 1,248 (3,724 ) Interest expense, net - - (38 ) Income (loss) before income taxes $ 949 $ 1,248 $ (3,762 ) |
Commitments (Tables)
Commitments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Commitments [Abstract] | |
Operating Lease Maturities | The following table summarizes the Company’s operating lease maturities as of September 30, 2021: For the year ending December 31 Amount Remaining 2021 $ 122 2022 371 2023 242 2024 186 Total remaining lease payments 921 Less: imputed interest (117 ) Total lease liabilities $ 804 |
The Company, Background (Detail
The Company, Background (Details) - XTRAC [Member] | 9 Months Ended |
Sep. 30, 2021Systems | |
United States [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 880 |
International [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 49 |
The Company, Earnings Per Share
The Company, Earnings Per Share (Details) - shares | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Loss Per Share [Abstract] | |||
Series C Convertible Preferred Stock, shares outstanding (in shares) | 0 | 0 | |
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 4,482,012 | 5,177,269 | |
Series C Convertible Preferred Stock [Member] | |||
Loss Per Share [Abstract] | |||
Series C Convertible Preferred Stock, shares outstanding (in shares) | 0 | 0 | |
Common Stock Purchase Warrants [Member] | |||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 373,626 | 149,901 | |
Restricted Stock Units [Member] | |||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 144,497 | 119,330 | |
Common Stock Options [Member] | |||
Earnings Per Share, Basic and Diluted, Other Disclosures [Abstract] | |||
Potential common stock equivalents (in shares) | 3,963,889 | 4,908,038 |
Liquidity (Details)
Liquidity (Details) $ in Thousands | 1 Months Ended |
Oct. 31, 2021USD ($) | |
At-the-Market Equity Offering [Member] | Subsequent Event [Member] | Maximum [Member] | |
Equity Distribution Agreement [Abstract] | |
Amount of common stock the Company may sell under equity distribution agreement | $ 11,000 |
Revenue Recognition, Remaining
Revenue Recognition, Remaining Performance Obligation (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 1,549 |
RA Medical Systems, Inc. [Member] | |
Remaining Performance Obligation [Abstract] | |
Deferred revenue acquired in remaining performance obligations | 1,506 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 1,148 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | Minimum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | 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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Treatment Equipment [Abstract] | ||||
Lease term | 36 months | 36 months | ||
Contract with Customer, Liability [Abstract] | ||||
Short-term contract liabilities | $ 1,148 | $ 1,148 | ||
Long-term contract liabilities | 401 | 401 | ||
Change in Contract with Customer, Liability [Abstract] | ||||
Contract liabilities recognized as revenue | 19 | $ 52 | 73 | $ 162 |
Co-pay reimbursements recorded as reduction of revenue | $ (199) | $ (160) | $ (542) | $ (414) |
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 | 48 months |
Revenue Recognition, Disaggrega
Revenue Recognition, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | $ 7,711 | $ 5,613 | $ 20,920 | $ 16,373 |
Dermatology Recurring Procedures [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 5,710 | 3,835 | 15,841 | 12,332 |
Dermatology Procedures Equipment [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 2,001 | 1,778 | 5,079 | 4,041 |
Domestic [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 5,889 | 3,951 | 16,036 | 12,658 |
Domestic [Member] | Dermatology Recurring Procedures [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 5,370 | 3,690 | 14,923 | 11,957 |
Domestic [Member] | Dermatology Procedures Equipment [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 519 | 261 | 1,113 | 701 |
Foreign [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 1,822 | 1,662 | 4,884 | 3,715 |
Foreign [Member] | Dermatology Recurring Procedures [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | 340 | 145 | 918 | 375 |
Foreign [Member] | Dermatology Procedures Equipment [Member] | ||||
Disaggregation of Revenue [Abstract] | ||||
Revenues, net | $ 1,482 | $ 1,517 | $ 3,966 | $ 3,340 |
Revenue Recognition, Future Und
Revenue Recognition, Future Undiscounted Fixed Payments from International Recurring Revenue Customers (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 1,549 |
International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | 4,863 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 1,148 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 390 |
Expected timing of satisfaction period | 3 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 | $ 1,556 |
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 | $ 1,479 |
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 | $ 1,076 |
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 | $ 362 |
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 |
Acquisition of Pharos Assets _3
Acquisition of Pharos Assets and Liabilities (Details) - RA Medical Systems, Inc. [Member] $ in Thousands | 1 Months Ended | 9 Months Ended |
Aug. 31, 2021USD ($)Practice | Sep. 30, 2021 | |
Acquisition of Assets and Liabilities [Abstract] | ||
Number of dermatology practices | Practice | 400 | |
Consideration [Abstract] | ||
Cash payment | $ 3,700 | |
Transaction costs | 57 | |
Total consideration | 3,757 | |
Assets acquired [Abstract] | ||
Inventory | 284 | |
Total assets acquired | 5,598 | |
Liabilities assumed [Abstract] | ||
Deferred revenues - service contracts | 1,841 | |
Total liabilities assumed | 1,841 | |
Net assets acquired | $ 3,757 | |
Estimated customer sales growth | 3.00% | |
Customer attrition | 5.00% | |
Weighted average cost of capital | 17.00% | |
Customer Lists [Member] | ||
Assets acquired [Abstract] | ||
Intangible assets | $ 5,314 | |
Liabilities assumed [Abstract] | ||
Amortization period of intangible assets | 12 years |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Schedule of inventory [Abstract] | ||
Raw materials and work in process | $ 3,024 | $ 2,949 |
Finished goods | 201 | 495 |
Total inventories | $ 3,225 | $ 3,444 |
Property and Equipment, net (De
Property and Equipment, net (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, Net [Abstract] | |||||
Property and equipment, gross | $ 25,693 | $ 25,693 | $ 23,374 | ||
Accumulated depreciation and amortization | (19,290) | (19,290) | (17,845) | ||
Property and equipment, net | 6,403 | 6,403 | 5,529 | ||
Depreciation and related amortization expense | 575 | $ 454 | 1,576 | $ 1,535 | |
Gain on disposal of property and equipment | (73) | $ (23) | |||
Property plant and equipment disposal, original cost | 204 | 204 | |||
Property plant and equipment disposal, accumulated depreciation | 131 | 131 | |||
Lasers Placed-In-Service [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property and equipment, gross | 25,190 | 25,190 | 22,942 | ||
Equipment, Computer Hardware and Software [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property and equipment, gross | 224 | 224 | 146 | ||
Furniture and Fixtures [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property and equipment, gross | 236 | 236 | 243 | ||
Leasehold Improvements [Member] | |||||
Property, Plant and Equipment, Net [Abstract] | |||||
Property and equipment, gross | $ 43 | $ 43 | $ 43 |
Intangible Assets, net (Details
Intangible Assets, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Aug. 31, 2021 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Balance | $ 21,414 | $ 21,414 | $ 16,100 | |||
Accumulated amortization | (10,868) | (10,868) | (9,755) | |||
Intangible assets, net | 10,546 | 10,546 | 6,345 | |||
Amortization expense of intangible assets | 408 | $ 353 | 1,113 | $ 1,258 | ||
Impairment of intangible assets | 0 | |||||
Estimated amortization expense [Abstract] | ||||||
Remaining 2021 | 463 | 463 | ||||
2022 | 1,853 | 1,853 | ||||
2023 | 1,853 | 1,853 | ||||
2024 | 1,853 | 1,853 | ||||
2025 | 1,148 | 1,148 | ||||
Thereafter | 3,376 | 3,376 | ||||
Intangible assets, net | 10,546 | 10,546 | 6,345 | |||
Core Technology [Member] | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Balance | 5,700 | 5,700 | 5,700 | |||
Accumulated amortization | (3,562) | (3,562) | (3,135) | |||
Intangible assets, net | 2,138 | 2,138 | 2,565 | |||
Estimated amortization expense [Abstract] | ||||||
Intangible assets, net | 2,138 | 2,138 | 2,565 | |||
Product Technology [Member] | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Balance | 2,000 | 2,000 | 2,000 | |||
Accumulated amortization | (2,000) | (2,000) | (2,000) | |||
Intangible assets, net | 0 | 0 | 0 | |||
Estimated amortization expense [Abstract] | ||||||
Intangible assets, net | 0 | 0 | 0 | |||
Customer Relationships [Member] | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Balance | 6,900 | 6,900 | 6,900 | |||
Accumulated amortization | (4,313) | (4,313) | (3,795) | |||
Intangible assets, net | 2,587 | 2,587 | 3,105 | |||
Estimated amortization expense [Abstract] | ||||||
Intangible assets, net | 2,587 | 2,587 | 3,105 | |||
Tradenames [Member] | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Balance | 1,500 | 1,500 | 1,500 | |||
Accumulated amortization | (938) | (938) | (825) | |||
Intangible assets, net | 562 | 562 | 675 | |||
Estimated amortization expense [Abstract] | ||||||
Intangible assets, net | 562 | 562 | $ 675 | |||
Pharos Customer List [Member] | ||||||
Finite-Lived Intangible Assets, Net [Abstract] | ||||||
Balance | 5,314 | 5,314 | ||||
Accumulated amortization | (55) | (55) | ||||
Intangible assets, net | 5,259 | 5,259 | ||||
Estimated fair value | $ 5,314 | |||||
Estimated amortization expense [Abstract] | ||||||
Intangible assets, net | $ 5,259 | $ 5,259 |
Other Accrued Liabilities, Comp
Other Accrued Liabilities, Components of Other Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 |
Other Accrued Liabilities [Abstract] | |||
Accrued warranty, current | $ 54 | $ 87 | $ 107 |
Accrued compensation, including commissions and vacation | 1,578 | 891 | |
Accrued state sales, use and other taxes | 3,152 | 3,105 | |
Accrued professional fees and other accrued liabilities | 764 | 607 | |
Total other accrued liabilities | $ 5,548 | $ 4,690 |
Other Accrued Liabilities, Accr
Other Accrued Liabilities, Accrued State Sales and Use Tax (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)Assessment | |
Accrued State Sales and Use Tax [Abstract] | |
Interest amount | $ 171 |
Tax Period from March 2014 through February 2020 [Member] | |
Accrued State Sales and Use Tax [Abstract] | |
Number of assessments | Assessment | 2 |
Estimated tax positions subject to audit | $ 1,484 |
Tax Period from June 2015 through March 2018 [Member] | |
Accrued State Sales and Use Tax [Abstract] | |
Assessment amount | $ 720 |
Other Accrued Liabilities, Ac_2
Other Accrued Liabilities, Accrued Warranty Costs (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 | |
Product Warranty Accrual [Roll Forward] | |||||
Accrual at beginning of period | $ 98 | $ 139 | $ 113 | $ 232 | |
Additions charged to warranty expense | 11 | 37 | 52 | 46 | |
Expiring warranties/claims satisfied | (28) | (41) | (84) | (143) | |
Total | 81 | 135 | 81 | 135 | |
Less: current portion | (54) | (107) | (54) | (107) | $ (87) |
Total long-term accrued warranty costs | $ 27 | $ 28 | $ 27 | $ 28 | |
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 | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Dec. 30, 2020 | |
Debt Instruments [Abstract] | |||
Repayments of notes payable | $ 7,275 | $ 0 | |
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% | ||
Repayments of notes payable | $ 7,275 | ||
Time Deposit [Member] | |||
Debt Instruments [Abstract] | |||
Fixed interest rate | 0.40% |
Long-term Debt, Senior Term Fac
Long-term Debt, Senior Term Facility (Details) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2021USD ($)Payment$ / sharesshares | Dec. 31, 2021USD ($) | |
Common Stock [Member] | |||
Long-term Debt [Abstract] | |||
Warrants issued (in shares) | shares | 0 | ||
MidCap Financial Trust [Member] | Senior Term Facility [Member] | |||
Long-term Debt [Abstract] | |||
Face amount of debt | $ 8 | $ 8 | |
Maturity date | Sep. 1, 2026 | ||
Number of monthly principal payments plus interest | Payment | 24 | ||
Frequency of payment | monthly | ||
Notice period | 30 days | ||
Prepayment fee if prepayment is made within twelve months | 4.00% | ||
Prepayment fee if prepayment is made between twelve months and twenty-four months | 3.00% | ||
Prepayment fee if prepayment is made between twenty-four months and thirty-six months | 2.00% | ||
Prepayment fee if prepayment is made after thirty-six months | 1.00% | ||
Minimum net revenue threshold | $ 24 | ||
Minimum net revenue threshold by December 31, 2023 | 30 | ||
Estimated fair value of warrants | 0.6 | 0.6 | |
Third party costs and lender fees | 0.1 | ||
Interest | 0 | 0 | |
Amortization of debt discount | $ 0 | 0 | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Forecast [Member] | |||
Long-term Debt [Abstract] | |||
Minimum net revenue threshold | $ 25 | ||
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Minimum [Member] | |||
Long-term Debt [Abstract] | |||
Prepayment of debt | $ 5 | ||
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Common Stock [Member] | |||
Long-term Debt [Abstract] | |||
Warrants issued (in shares) | shares | 373,626 | ||
Warrants, exercise price (in dollars per share) | $ / shares | $ 1.82 | $ 1.82 | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | LIBOR [Member] | |||
Long-term Debt [Abstract] | |||
Interest rate floor | 0.50% | ||
Basis spread on variable rate | 7.50% | ||
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Expected Term [Member] | |||
Long-term Debt [Abstract] | |||
Warrants, expected term | 10 years | 10 years | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Expected Volatility [Member] | |||
Long-term Debt [Abstract] | |||
Warrants, measurement input | 0.886 | 0.886 | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Risk-Free Rate [Member] | |||
Long-term Debt [Abstract] | |||
Warrants, measurement input | 0.015 | 0.015 | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Estimated Dividend Yield [Member] | |||
Long-term Debt [Abstract] | |||
Warrants, measurement input | 0 | 0 |
Long-term Debt, Future Minimum
Long-term Debt, Future Minimum Principal Payments (Details) $ in Thousands | Sep. 30, 2021USD ($) |
Future Payments for Long-Term Debt [Abstract] | |
2024 | $ 1,000 |
2025 | 4,000 |
2026 | 3,000 |
Total | $ 8,000 |
Long-term Debt, PPP Loan and EI
Long-term Debt, PPP Loan and EIDL Loan (Details) - USD ($) $ in Thousands | May 22, 2020 | Jun. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Apr. 22, 2020 |
Long-term Debt [Abstract] | |||||
Gain on forgiveness of debt | $ 2,028 | $ 0 | |||
PPP Loans [Member] | |||||
Long-term Debt [Abstract] | |||||
Face amount of debt | $ 2,028 | ||||
Maturity date | May 1, 2022 | ||||
Interest rate percentage | 1.00% | ||||
Gain on forgiveness of debt | $ 2,028 | ||||
EIDL [Member] | |||||
Long-term Debt [Abstract] | |||||
Face amount of debt | $ 500 | ||||
Interest rate percentage | 3.75% | ||||
Installment monthly payment amount | $ 2 | ||||
Debt instrument term | 30 years |
Stock-based Compensation, Summa
Stock-based Compensation, Summary (Details) - USD ($) $ in Thousands | Jul. 07, 2021 | May 29, 2018 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Oct. 27, 2016 |
Stock-based Compensation [Abstract] | |||||||
Stock-based compensation expense | $ 320 | $ 403 | $ 1,563 | $ 1,243 | |||
2016 Omnibus Incentive Plan [Member] | |||||||
Stock-based Compensation [Abstract] | |||||||
Number of shares authorized for issuance (in shares) | 2,058,880 | ||||||
Increase in number of shares authorized (in shares) | 2,700,000 | 3,134,365 | |||||
Number of shares available for issuance (in shares) | 3,853,038 | 3,853,038 |
Stock-based Compensation, Stock
Stock-based Compensation, Stock Options (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |
Sep. 30, 2021USD ($)$ / sharesshares | Sep. 30, 2020shares | |
Weighted average remaining contractual term [Abstract] | ||
Exercisable | 9 months 18 days | |
Unrecognized compensation expense | $ | $ 167 | |
Stock Options [Member] | ||
Number of shares [Abstract] | ||
Outstanding at beginning period (in shares) | shares | 5,292,888 | |
Granted (in shares) | shares | 2,043,714 | 0 |
Exercised (in shares) | shares | (1,557,628) | |
Forfeited/expired (in shares) | shares | (1,815,085) | |
Outstanding at end of period (in shares) | shares | 3,963,889 | |
Exercisable at end of period (in shares) | shares | 1,236,841 | |
Weighted average exercise price per share [Abstract] | ||
Outstanding at beginning of period (in dollars per share) | $ 1.87 | |
Granted (in dollars per share) | 1.67 | |
Exercised (in dollars per share) | 1.12 | |
Forfeited/expired (in dollars per share) | 1.84 | |
Outstanding at end of period (in dollars per share) | 2.05 | |
Exercisable at end of period (in dollars per share) | $ 2.77 | |
Weighted average remaining contractual term [Abstract] | ||
Outstanding | 8 years 2 months 12 days | |
Exercisable | 5 years 7 months 6 days | |
Weighted-average grant date fair value (in dollars per share) | $ 1.24 | |
Unrecognized compensation expense | $ | $ 2,720 | |
Unrecognized compensation expense, weighted average period | 2 years 4 months 24 days | |
Aggregate intrinsic value of options outstanding | $ | $ 558 | |
Aggregate intrinsic value of options exercisable | $ | $ 53 |
Stock-based Compensation, Fair
Stock-based Compensation, Fair Value Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | Feb. 28, 2021 | Sep. 30, 2021 |
Fair Value Assumptions [Abstract] | ||
Expected volatility | 90.40% | |
Risk-free interest rate | 1.00% | |
Expected life (in years) | 5 years 10 months 24 days | |
Expected dividend yield | 0.00% | |
Fair value of common stock (in dollars per share) | $ 1.68 | |
Accelerated compensation expense | $ 173 | |
Stock Options [Member] | ||
Fair Value Assumptions [Abstract] | ||
Option exercised (in shares) | (1,557,628) | |
Weighted average exercise price (in dollars per share) | $ 1.12 | |
Stock option exercise, stock issued (in shares) | 329,076 |
Stock-based Compensation, Restr
Stock-based Compensation, Restricted Stock Units (Details) $ / shares in Units, $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Weighted average grant date fair value [Abstract] | |
Unrecognized compensation expense | $ | $ 167 |
Weighted average period of recognition | 9 months 18 days |
Restricted Stock Units [Member] | |
Number of shares [Abstract] | |
Unvested at beginning of period (in shares) | shares | 0 |
Granted (in shares) | shares | 290,861 |
Vested (in shares) | shares | (146,364) |
Unvested at end of period (in shares) | shares | 144,497 |
Weighted average grant date fair value [Abstract] | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 0 |
Granted (in dollars per share) | $ / shares | 1.44 |
Vested (in dollars per share) | $ / shares | 1.42 |
Unvested at end of period (in dollars per share) | $ / shares | $ 1.45 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Taxes [Abstract] | ||||
Income tax expense | $ 4 | $ 72 | $ 12 | $ 207 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)Segment | Sep. 30, 2020USD ($) | |
Business Segments [Abstract] | ||||
Number of operating segments | Segment | 2 | |||
Results of Operations from Business Segments [Abstract] | ||||
Revenues | $ 7,711 | $ 5,613 | $ 20,920 | $ 16,373 |
Cost of revenues | 2,335 | 2,383 | 7,070 | 6,780 |
Gross profit | $ 5,376 | $ 3,230 | $ 13,850 | $ 9,593 |
Gross profit % | 69.70% | 57.50% | 66.20% | 58.60% |
Allocated operating expenses [Abstract] | ||||
Engineering and product development | $ 371 | $ 411 | $ 1,158 | $ 950 |
Selling and marketing | 3,295 | 2,051 | 9,387 | 6,446 |
Unallocated operating expenses | 2,175 | 1,929 | 7,085 | 5,921 |
Total operating expenses | 5,841 | 4,391 | 17,630 | 13,317 |
Income (loss) from operations | (465) | (1,161) | (3,780) | (3,724) |
Gain on forgiveness of debt | 2,028 | 0 | ||
Interest expense, net | (52) | (21) | (93) | (38) |
Income (loss) before income taxes | (517) | (1,182) | (1,845) | (3,762) |
Dermatology Recurring Procedures [Member] | ||||
Results of Operations from Business Segments [Abstract] | ||||
Revenues | 5,710 | 3,835 | 15,841 | 12,332 |
Dermatology Procedures Equipment [Member] | ||||
Results of Operations from Business Segments [Abstract] | ||||
Revenues | 2,001 | 1,778 | 5,079 | 4,041 |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||||
Results of Operations from Business Segments [Abstract] | ||||
Revenues | 5,710 | 3,835 | 15,841 | 12,332 |
Cost of revenues | 1,512 | 1,368 | 4,648 | 4,534 |
Gross profit | $ 4,198 | $ 2,467 | $ 11,193 | $ 7,798 |
Gross profit % | 73.50% | 64.30% | 70.70% | 63.20% |
Allocated operating expenses [Abstract] | ||||
Engineering and product development | $ 333 | $ 329 | $ 1,013 | $ 828 |
Selling and marketing | 3,094 | 1,883 | 8,805 | 6,021 |
Unallocated operating expenses | 0 | 0 | 0 | 0 |
Total operating expenses | 3,427 | 2,212 | 9,818 | 6,849 |
Income (loss) from operations | 771 | 255 | 1,375 | 949 |
Gain on forgiveness of debt | 0 | |||
Interest expense, net | 0 | 0 | 0 | 0 |
Income (loss) before income taxes | 771 | 255 | 1,375 | 949 |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||||
Results of Operations from Business Segments [Abstract] | ||||
Revenues | 2,001 | 1,778 | 5,079 | 4,041 |
Cost of revenues | 823 | 1,015 | 2,422 | 2,246 |
Gross profit | $ 1,178 | $ 763 | $ 2,657 | $ 1,795 |
Gross profit % | 58.90% | 42.90% | 52.30% | 44.40% |
Allocated operating expenses [Abstract] | ||||
Engineering and product development | $ 38 | $ 82 | $ 145 | $ 122 |
Selling and marketing | 201 | 168 | 582 | 425 |
Unallocated operating expenses | 0 | 0 | 0 | 0 |
Total operating expenses | 239 | 250 | 727 | 547 |
Income (loss) from operations | 939 | 513 | 1,930 | 1,248 |
Gain on forgiveness of debt | 0 | |||
Interest expense, net | 0 | 0 | 0 | 0 |
Income (loss) before income taxes | $ 939 | $ 513 | $ 1,930 | $ 1,248 |
Significant Customer Concentr_2
Significant Customer Concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Concentration Risk [Abstract] | ||||
Revenues, net | $ 7,711 | $ 5,613 | $ 20,920 | $ 16,373 |
Revenue [Member] | Customer Concentration Risk [Member] | Distributor One [Member] | ||||
Concentration Risk [Abstract] | ||||
Revenues, net | $ 846 | $ 2,220 | $ 2,149 | |
Concentration risk percentage | 15.10% | 10.60% | 13.10% | |
Revenue [Member] | Customer Concentration Risk [Member] | Distributor Two [Member] | ||||
Concentration Risk [Abstract] | ||||
Revenues, net | $ 632 | |||
Concentration risk percentage | 11.30% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Distributor One [Member] | ||||
Concentration Risk [Abstract] | ||||
Concentration risk percentage | 10.50% |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Lessee, Operating Lease, Description [Abstract] | ||||
Amortization of right-of-use assets | $ 261 | $ 242 | ||
Operating lease costs | $ 108 | $ 112 | 331 | 336 |
Cash paid for amounts included in measurement of operating lease liabilities | $ 113 | $ 113 | $ 344 | $ 344 |
Incremental borrowing rate | 9.76% | |||
Weighted average remaining lease term | 2 years 4 months 24 days | 2 years 4 months 24 days | ||
Operating Lease Maturities [Abstract] | ||||
Remaining 2021 | $ 122 | $ 122 | ||
2022 | 371 | 371 | ||
2023 | 242 | 242 | ||
2024 | 186 | 186 | ||
Total remaining lease payments | 921 | 921 | ||
Less: imputed interest | (117) | (117) | ||
Total lease liabilities | $ 804 | $ 804 | ||
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 | 2 years | ||
Carlsbad Facility [Member] | ||||
Lessee, Operating Lease, Description [Abstract] | ||||
Renewal option term | 5 years | 5 years |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event [Member] - At-the-Market Equity Offering [Member] - Maximum [Member] $ in Thousands | 1 Months Ended |
Oct. 31, 2021USD ($) | |
Subsequent Events [Abstract] | |
Amount of common stock the Company may sell under equity distribution agreement | $ 11,000 |
Commission as percentage of gross proceeds from sale of shares sold | 3.00% |