Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2024 | May 13, 2024 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2024 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
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, $0.001 Par Value | |
Trading Symbol | SSKN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 35,060,920 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 5,237 | $ 6,784 |
Restricted cash | 1,334 | 1,334 |
Accounts receivable, net of allowance for credit losses of $306 and $222 at March 31, 2024 and December 31, 2023, respectively | 3,630 | 4,440 |
Inventories | 2,695 | 2,673 |
Prepaid expenses and other current assets | 343 | 312 |
Total current assets | 13,239 | 15,543 |
Property and equipment, net | 11,726 | 11,778 |
Operating lease right-of-use assets | 1,508 | 626 |
Intangible assets, net | 6,825 | 7,319 |
Goodwill | 6,519 | 6,519 |
Other assets | 231 | 231 |
Total assets | 40,048 | 42,016 |
Current liabilities: | ||
Accounts payable | 3,592 | 3,343 |
Accrued expenses and other current liabilities | 6,269 | 6,306 |
Deferred revenues | 2,366 | 2,120 |
Current portion of operating lease liabilities | 300 | 352 |
Current portion of contingent consideration | 61 | 53 |
Total current liabilities | 12,588 | 12,174 |
Long-term debt, net | 15,075 | 15,044 |
Deferred revenues and other liabilities | 480 | 552 |
Deferred tax liability | 186 | 186 |
Operating lease liabilities, net of current portion | 1,166 | 237 |
Contingent consideration, net of current portion | 1,121 | 1,135 |
Total liabilities | 30,616 | 29,328 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Series C convertible preferred stock, $0.10 par value; 10,000,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock, $0.001 par value; 150,000,000 shares authorized; 35,060,920 shares issued and outstanding at March 31, 2024 and December 31, 2023 | 35 | 35 |
Additional paid-in capital | 250,823 | 250,711 |
Accumulated deficit | (241,426) | (238,058) |
Total stockholders' equity | 9,432 | 12,688 |
Total liabilities and stockholders' equity | $ 40,048 | $ 42,016 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Current assets: | ||
Allowance for credit losses | $ 306 | $ 222 |
Stockholders' equity: | ||
Series C Convertible Preferred Stock, par value (in dollars per share) | $ 0.1 | $ 0.1 |
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 (in shares) | 35,060,920 | 35,060,920 |
Common stock, shares outstanding (in shares) | 35,060,920 | 35,060,920 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Condensed Consolidated Statements of Operations [Abstract] | ||
Revenues, net | $ 6,754 | $ 7,567 |
Cost of revenues | 3,674 | 3,179 |
Gross profit | 3,080 | 4,388 |
Operating expenses: | ||
Engineering and product development | 241 | 315 |
Selling and marketing | 3,018 | 3,742 |
General and administrative | 2,710 | 2,917 |
Total operating expenses | 5,969 | 6,974 |
Loss from operations | (2,889) | (2,586) |
Other (expense) income: | ||
Interest expense | (524) | (286) |
Interest income | 45 | 37 |
Other (expense), income net | (479) | (249) |
Net loss | $ (3,368) | $ (2,835) |
Net loss per share of common stock - basic (in dollars per share) | $ (0.1) | $ (0.08) |
Net loss per share of common stock - diluted (in dollars per share) | $ (0.1) | $ (0.08) |
Weighted average shares of common stock outstanding - basic (in shares) | 35,060,920 | 34,862,092 |
Weighted average shares of common stock outstanding - diluted (in shares) | 35,060,920 | 34,862,092 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in-Capital [Member] | Accumulated Deficit [Member] | Total |
Beginning balance at Dec. 31, 2022 | $ 35 | $ 249,024 | $ (227,228) | $ 21,831 |
Beginning balance (in shares) at Dec. 31, 2022 | 34,723,046 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 325 | 0 | 325 |
Issuance of restricted stock | $ 0 | 0 | 0 | 0 |
Issuance of restricted stock (in shares) | 158,407 | |||
Net loss | $ 0 | 0 | (2,835) | (2,835) |
Ending balance at Mar. 31, 2023 | $ 35 | 249,349 | (230,063) | 19,321 |
Ending balance (in shares) at Mar. 31, 2023 | 34,881,453 | |||
Beginning balance at Dec. 31, 2023 | $ 35 | 250,711 | (238,058) | 12,688 |
Beginning balance (in shares) at Dec. 31, 2023 | 35,060,920 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Stock-based compensation expense | $ 0 | 112 | 0 | 112 |
Net loss | 0 | 0 | (3,368) | (3,368) |
Ending balance at Mar. 31, 2024 | $ 35 | $ 250,823 | $ (241,426) | $ 9,432 |
Ending balance (in shares) at Mar. 31, 2024 | 35,060,920 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Cash flows from operating activities: | ||
Net loss | $ (3,368) | $ (2,835) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 1,249 | 1,397 |
Amortization of operating lease right-of-use assets | 95 | 105 |
Amortization of deferred financing costs and debt discount | 31 | 41 |
Change in allowance for credit losses | 84 | (95) |
Stock-based compensation expense | 112 | 325 |
Loss on disposal of property and equipment | 13 | 0 |
Inventory write-off | 141 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 726 | 626 |
Inventories | (154) | 283 |
Prepaid expenses and other assets | (31) | 16 |
Accounts payable | 261 | (326) |
Accrued expenses and other liabilities | (57) | (12) |
Deferred revenues | 194 | (247) |
Operating lease liabilities | (100) | (95) |
Net cash used in operating activities | (804) | (817) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (725) | (1,792) |
Net cash used in investing activities | (725) | (1,792) |
Cash flows from financing activities: | ||
Payment of contingent consideration | (18) | 0 |
Net cash used in financing activities | (18) | 0 |
Net decrease in cash, cash equivalents and restricted cash | (1,547) | (2,609) |
Cash, cash equivalents and restricted cash at beginning of period | 8,118 | 6,795 |
Cash, cash equivalents and restricted cash at end of period | 6,571 | 4,186 |
Cash and cash equivalents | 5,237 | 2,825 |
Restricted cash | 1,334 | 1,361 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the year for interest | 480 | 241 |
Supplemental schedule of non-cash operating, investing and financing activities: | ||
Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 977 | 0 |
Transfer of property and equipment to inventories | 9 | 45 |
Accrued payment of contingent consideration | $ 6 | $ 14 |
The Company
The Company | 3 Months Ended |
Mar. 31, 2024 | |
The Company [Abstract] | |
The Company | Note 1 The Company: Background STRATA Skin Sciences, Inc. (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. In January 2022, the Company acquired the TheraClear Acne Therapy System to broaden its opportunities with expansion potential in the acne care market. The Company markets the device under the brand name TheraClear® X. The XTRAC is an ultraviolet light excimer laser system utilized to treat psoriasis, vitiligo and other skin diseases. The XTRAC excimer laser system received clearance from the United States Food and Drug Administration (the “FDA”) in 2000. As of March 31, 2024, there were 907 XTRAC systems placed in dermatologists’ offices in the United States and 45 systems internationally under the Company’s recurring revenue business model. The XTRAC systems deployed under the recurring revenue model generate revenue on a per procedure basis or include a fixed payment over an agreed upon period with a capped number of treatments which, if exceeded, would incur additional fees. The per-procedure charge is inclusive of the use of the system and the services provided by the Company to the customer, which includes system maintenance and other services. The VTRAC Excimer Lamp system, offered in addition to the XTRAC system internationally, provides targeted therapeutic efficacy demonstrated by excimer technology with a lamp system. Th e Pharos excimer laser system holds FDA clearance to treat chronic skin diseases, including psoriasis, vitiligo, atopic dermatitis and leukoderma. The TheraClear® Acne Therapy System (“TheraClear”) combines intense pulse light with vacuum (suction) for the treatment of mild to moderate inflammatory acne (including acne vulgaris), comedonal acne and pustular acne. Since 2019, the Company has been transitioning its international dermatology procedures equipment sales through its master distributor to a direct distribution model for equipment sales and recurring revenue on a country-by-country basis. The Company has signed distributor contracts by year as follows: 2019 – Korea, 2020 – Japan, 2021 – China, Israel, Saudi Arabia, Kuwait, Oman, Qatar, Bahrain, UAE, Jordan, Iraq and 2023 – Mexico, India. Post-COVID-19 Pandemic Since March 2020, the global pandemic related to a new strain of coronavirus (“COVID-19”) has negatively impacted business conditions in the industry in which the Company operates, disrupted global supply chains, constrained workforce participation and created significant volatility and disruption of financial markets. The pandemic led to the suspension of elective procedures in the U.S. and to the temporary closure of many physician practices, which are the Company’s primary customers. While most physician offices have reopened, some of the Company’s partner physician practices closed permanently. Accordingly, the COVID-19 pandemic and its variants have negatively impacted the Company’s operational and financial performance, including its ability to execute its business strategies and initiatives in the expected time frames and those of its primary customers. It has also negatively impacted the Company’ supply chains and transport, customer behavior and staffing. Impact of Russia-Ukraine War Prior to the outbreak of the Russia-Ukraine War, Ukraine was the largest exporter of noble gases including neon, krypton, and xenon and has historically been the source of a significant amount of gas supplied to the Company by its contract suppliers. Neon gas is essential to the proper functioning of the Company’s lasers. The Company’s suppliers have been resourceful in continuing to supply gases to the Company but cannot assure the Company that the supply will remain uninterrupted. The reduced supply and ongoing conflict have also impacted the price of gas worldwide. Additionally, the Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 has led to a further tightening of rare gas supplies as semiconductor chip manufacturers reconfigure their supply chains to address the need to secure their own supplies of rare gases for use in the manufacture of computer chips. Impact of Israel-Hamas Conflict The Company has not seen an impact on its distributors’ businesses in the Middle East due to the Israel-Hamas conflict, but cannot predict the impact should the conflict continue or develop into a larger war. Basis of presentation: Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and Photomedex India Private Limited, 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, 2023 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 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 condensed or 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, 2023 (the “2023 Form 10-K”), and other forms filed with the SEC from time to time. Dollar amounts included herein are in thousands, except per share amounts. Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation, including the impact on the condensed consolidated statement of cash flows of the reclassification of lasers-in-process from inventories to property and equipment, net. Significant Accounting Policies The significant accounting policies used in preparation of these condensed consolidated financial statements are disclosed in the Company’s 2023 Form 10-K, and there have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2024. 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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates and judgments include revenue recognition with respect to deferred revenues and the contract term and valuation allowances of accounts receivable, inputs used when evaluating goodwill for impairment, inputs used in the valuation of contingent consideration, state sales and use tax accruals, the estimated useful lives of intangible assets, and the valuation allowance related to deferred tax assets. Actual results could differ from those estimates. Fair Value Measurements The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires the use of observable inputs and minimizes the use of unobservable inputs. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 – quoted market prices in active markets for identical assets or liabilities. • Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – inputs that are generally unobservable and typically reflect the Company’s estimate of assumptions that market participants would use in pricing the asset or liability. The fair values of cash and cash equivalents and restricted cash are based on their respective demand values, which are equal to the carrying values. The carrying values of all short-term monetary assets and liabilities are estimated to approximate their fair values due to the short-term nature of these instruments. As of March 31, 2024 and December 31, 2023, the carrying value of the Company’s long-term debt approximated its fair value due to its variable interest rate. 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 months ended March 31, 2024 and 2023 is summarized as follows: Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 303 $ 207 Additions 39 27 Expirations and claims satisfied (64 ) (5 ) Total 278 229 Less current portion within accrued expenses and other current liabilities (175 ) (152 ) Balance within deferred revenues and other liabilities $ 103 $ 77 Net Loss Per Share Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities such as unvested restricted stock awards, stock options and warrants for common stock which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same as for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: March 31, 2024 2023 Stock options 5,391,069 4,464,714 Common stock warrants 800,000 373,626 Restricted stock units 22,654 119,597 6,213,723 4,957,937 Recent Accounting Pronouncements Recently Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s own Equity . Recent Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, |
Liquidity
Liquidity | 3 Months Ended |
Mar. 31, 2024 | |
Liquidity [Abstract] | |
Liquidity | Note 2 Liquidity: The Company has been negatively impacted by the 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 has been required to restrict cash for potential sales tax liabilities (see Note 13, Commitments and Contingencies ) |
Revenue Recognition
Revenue Recognition | 3 Months Ended |
Mar. 31, 2024 | |
Revenue Recognition [Abstract] | |
Revenue Recognition | Note 3 Revenue Recognition: Revenues from the Company’s dermatology recurring procedures customers are earned by providing physicians with its laser products and charging the physicians a fee for a fixed number of treatment sessions or 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. The placement of the laser products at physician locations represents embedded leases which are accounted for as operating leases. 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 effected at any time by either party with 30 to 60 day notice. Amounts paid are generally non-refundable. Sales of access codes for a fixed number of treatment sessions are considered variable treatment code payments and are recognized as revenue over the estimated usage period of the agreed upon number of treatments. Sales of access codes for a specified period of time are recognized as revenue on a straight-line basis as the lasers are being used over the term 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, the Company generally sells access codes for a fixed amount on a monthly basis to its distributors 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. Prepaid amounts recorded in deferred revenue and customer deposits recorded in accounts payable are recognized as revenue over the lease term in the patterns described above. 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. Revenues from the Company’s dermatology procedures equipment are recognized when control of the promised goods or services is transferred to its customers or distributors, in an amount that reflects the consideration to which it expects to be entitled in exchange for those goods or services. Accordingly, the Company determines revenue recognition through the following steps: • identification of the contract, or contracts, with a customer; • identification of the performance obligations in the contract; • determination of the transaction price; • allocation of the transaction price to the performance obligations in the contract; and • recognition of revenue when, or as, performance obligations are satisfied. Accounting for the Company’s contracts involves the use of significant judgments and estimates including determining the separate performance obligations, allocating the transaction price to the different performance obligations and determining the method to measure the entity’s performance toward satisfaction of performance obligations that most faithfully depicts when control is transferred to the customer. The Company allocates the contract’s transaction price to each performance obligation using the Company’s best estimate of the standalone selling price for each distinct good or service in the contract. The Company maximizes the use of observable inputs by beginning with average historical contractual selling prices and adjusting as necessary and on a consistent and rational basis for other inputs such as pricing trends, customer types, volumes and changing cost and margins. Revenues from dermatology procedures equipment are recognized 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 is transferred to the customer. The related shipping and freight charges incurred by the Company are included in cost of revenues. The following table summarizes the Company’s expected future undiscounted fixed treatment code payments from international dermatology recurring procedures, the Company’s only long-term arrangements, as of March 31, 2024: Remaining 2024 $ 1,064 2025 934 2026 716 2027 445 2028 19 Total $ 3,178 Remaining performance obligations related to Accounting Standards Codification (“ASC”) 606 , Revenue from Contracts with Customers one Contract liabilities primarily relate to extended warranties and service contracts where the Company has received payments but has not yet satisfied the related performance obligations. The allocations of the transaction price are based on the price of standalone warranty contracts sold in the ordinary course of business. The advance consideration received from customers for the warranty services is a contract liability that is recognized ratably over the warranty period. As of March 31, 2024, the $ 251 of short-term contract liabilities is presented as deferred revenues and the $ of long-term contract liabilities is presented within deferred revenues and other liabilities on the condensed consolidated balance sheet. For the three months ended March 31, 2024 and 2023, the Company recognized $ 76 and $ , With respect to contract acquisition costs, the Company applies the practical expedient and expenses these costs immediately. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2024 | |
Inventories [Abstract] | |
Inventories | Note 4 Inventories: Inventories consist of the following: March 31, 2024 December 31, 2023 Raw materials and work-in-process $ 2,421 $ 2,192 Finished goods 274 481 $ 2,695 $ 2,673 Work-in-process inventories are immaterial, given the Company’s typically short manufacturing cycle, and are included with raw materials inventories. Due to the expiration of extended warranty service contracts that were assumed in August 2021 in connection with the acquisition of Pharos laser system products, the Company wrote off $141 of inventories that will no longer be needed for warranty purposes during the three months ended March 31, 2024 |
Property and Equipment, net
Property and Equipment, net | 3 Months Ended |
Mar. 31, 2024 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 5 Property and Equipment, net: Property and equipment consist of the following: March 31, 2024 December 31, 2023 Lasers placed-in-service $ 32,940 $ 32,095 Equipment, computer hardware and software 293 293 Furniture and fixtures 240 240 Leasehold improvements 149 203 Lasers-in-process 3,121 3,231 36,743 36,062 Less: accumulated depreciation and amortization (25,017 ) (24,284 ) $ 11,726 $ 11,778 The Company recorded depreciation and amortization expense of $755 and $677 during the three months ended March 31, 2024 and 2023, respectively. |
Intangible Assets, net
Intangible Assets, net | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets, net [Abstract] | |
Intangible Assets, net | Note 6 Intangible Assets, net: Intangible assets consist of the following: March 31, 2024 Balance Accumulated Amortization Net Book Value Core technology $ 5,700 $ (4,988 ) $ 712 Product technology 4,808 (3,896 ) 912 Customer relationships 6,900 (6,038 ) 862 Tradenames 1,500 (1,313 ) 187 Pharos customer lists 5,314 (1,162 ) 4,152 $ 24,222 $ (17,397 ) $ 6,825 December 31, 2023 Core technology $ 5,700 $ (4,845 ) $ 855 Product technology 4,808 (3,866 ) 942 Customer relationships 6,900 (5,865 ) 1,035 Tradenames 1,500 (1,275 ) 225 Pharos customer lists 5,314 (1,052 ) 4,262 $ 24,222 $ (16,903 ) $ 7,319 The Company recorded amortization expense of $494 and $720 during the three months ended March 31, 2024 and 2023, respectively. Finite-lived intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying value of the asset group may not be recoverable. The Company recognizes an impairment loss when and to the extent that the recoverable amount of an asset group is less than its carrying value. There were no impairment charges for the three months ended March 31, 2024 or 2023. The following table summarizes the estimated future amortization expense for the above intangible assets for the next five years: Remaining 2024 1,477 2025 1,266 2026 561 2027 561 2028 561 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Mar. 31, 2024 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Note 7 Accrued Expenses and Other Current Liabilities: Accrued expenses and other current liabilities consist of the following: March 31, 2024 December 31, 2023 Warranty obligations $ 175 $ 180 Compensation and related benefits 1,667 1,679 State sales, use and other taxes 4,290 4,316 Professional fees and other 137 131 $ 6,269 $ 6,306 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2024 | |
Long-Term Debt [Abstract] | |
Long-Term Debt | Note 8 Long-Term Debt: On September 30, 2021, the Company entered into a credit and security agreement with MidCap Financial Trust (“MidCap”), also acting as the administrative agent, and the lenders identified therein. The original terms provided for an On June 30, 2023, the Company entered into (a) Amendment No. 3 to the credit and security agreement (the “Third Amendment”); (b) the Amended and Restated Warrant Agreement (the “A&R Warrant”) with MidCap Funding XXVII Trust (together with any registered holder from time to time or any holder of the shares issuable or issued upon the exercise or conversion of the warrant, the “Warrantholder”), which amended and restated the warrant agreement to purchase shares of the common stock of the Company, dated as of September 30, 2021 (the “Prior Warrant”), with the Warrantholder; (c) the Amended and Restated Registration Rights Agreement (the “A&R Registration Rights Agreement”) with the Warrantholder, which amended and restated the registration rights agreement, dated as of September 30, 2021, with the Warrantholder; and (d) a letter agreement (the “Fee Letter Agreement”) with MidCap, as agent. On February 20, 2024, the Company entered into (a) Amendment No. 4 to the credit and security agreement (the “Fourth Amendment”), which amended the credit and security agreement, and (b) a second amended and restated letter agreement (“Amended Fee Letter Agreement”) with MidCap, as agent. The Senior Term Facility provides for a senior secured term loan facility of $20,000, of which $8,000 was drawn by the Company on September 30, 2021 (“Credit Facility #1”), $7,000 was drawn by the Company on June 30, 2023 (“Credit Facility #2”), and an additional $5,000 tranche (“Credit Facility #3”) is available to be drawn by the Company if its Dermatology Recurring Procedures Revenue (as defined in the Senior Term Facility) for the preceding 12 calendar months (ending on the last day of the calendar month for which a compliance certificate is delivered) is greater than or equal to $30,000 (such condition, the “Applicable Funding Condition”). Credit Facility #3 can be drawn beginning on the later of the satisfaction of the Applicable Funding Condition and January 1, 2024, with such commitment terminating on the earlier to occur of December 31, 2024 and the delivery of a written notice by MidCap to the Company terminating the applicable commitments following an Event of Default (as defined in the Senior Term Facility) that has not been waived or cured at the time such notice is delivered. All borrowings are secured by substantially all of the Company’s assets. Borrowings under the Senior Term Facility bear interest at a rate per annum equal to the sum of (a) the greater of (i) the sum of (A) 30-day forward-looking term rate of one month SOFR, as published by CME Group Benchmark Administration Limited, from time to time, plus (B) 0.10%, and (ii) the applicable floor rate of 3.50%, with such sum reset monthly, and (b) 7.50%. The effective interest rate of the Senior Term Facility as of March 31, 2024 was 13.94%. The Company is obligated to make interest-only payments (payable monthly in arrears) through June 1, 2026. Commencing on July 1, 2026 and continuing for the remaining 24 months of the facility, the Company will be required to make monthly interest payments and monthly principal payments based on a straight-line amortization schedule set forth in the Senior Term Facility, subject to certain adjustments as described in the Senior Term Facility. The final maturity date under the Senior Term Facility is June 1, 2028, unless earlier terminated. The Senior Term Facility requires the Company to dedicate 100% of certain insurance proceeds to the prepayment of the outstanding term loan, subject to certain exceptions and net of certain expenses and repayments. The Company may voluntarily prepay the outstanding term loan under the Senior Term Facility, with such prepayment in an amount of at least $5,000, 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 12 months of February 20, 2024, (ii) 3.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made between 12 months and 24 months after February 20, 2024, (iii) 2.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made between 24 months and 36 months after February 20, 2024, or (iv) 1.00% of the outstanding principal prepaid or required to be prepaid (whichever is greater), if the prepayment is made after 36 months after February 20, 2024 and prior to the maturity date. The Senior Term Facility contains certain customary representations and warranties, affirmative covenants and conditions, as well as various negative covenants. Further, the Senior Term Facility contains (a) a quarterly financial covenant that requires the Company to not have less than $29,000 of net revenue (raised to $33,000 by December 31, 2026 and, for periods ending after December 31, 2026, such net revenue as determined in good faith by MidCap, which shall not be less than the applicable minimum net revenue amount for the immediately preceding period and $33,000) for the trailing 12-month period as of March 31, 2024, and (b) a minimum of unrestricted cash (as defined in the Senior Term Facility), at all times, of not less than $3,000. At March 31, 2024, the Company was in compliance with all financial covenants within the Senior Term Facility. Upon the occurrence and during the continuance of an event of default, MidCap may, and at the direction of a requisite percentage of the lenders must, (i) suspend or terminate the term loan commitment and MidCap and the other lenders’ obligations with respect thereto, and (ii) by notice to the Company, declare all or any portion of the obligations under the Senior Term Facility to be immediately due and payable. In addition to MidCap’s other rights and available remedies, but subject to applicable cure periods, upon the occurrence and during the continuance of an event of default, MidCap may, and at the direction of a requisite percentage of the lenders must, terminate the Senior Term Facility. At March 31, 2024, 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 Senior Term Facility, had not occurred and were remote. Pursuant to the Amended Fee Letter Agreement, the Company agreed to pay MidCap, as administrative agent, the following fees: (a) an origination fee on June 30, 2023 in an amount equal to (i) the Credit Extensions (as defined in the Senior Term Facility) in respect of Credit Facility #2, multiplied by (ii) 0.50%; (b) on the maturity date of the Senior Term Facility or any earlier date on which the obligations thereunder become due and payable in full or are otherwise paid in full (such date, the “Full Exit Fee Payment Date”), the Company shall pay an exit fee equal to (i) 4.00% of the total aggregate principal amount of Credit Extensions (as defined in the Senior Term Facility) made pursuant to the Senior Term Facility (regardless of any repayment or prepayment thereof) as of the Full Exit Fee Payment Date (such aggregate amount, the “Exit Fee Base Amount”), less (ii) any Partial Exit Fee (as defined below) previously paid; (c) on the date of any voluntary or mandatory partial prepayment of the borrowings under the Senior Term Facility (or on the date such mandatory prepayment becomes due and payable) (each such date, a “Partial Exit Fee Payment Date”), the Company shall pay an exit fee equal to 4.00% of the principal amount of the credit facilities paid or prepaid (or required to be paid in the case of a mandatory prepayment) as of the Partial Exit Fee Payment Date (such amount, the “Partial Exit Fee”); and (d) an origination fee payable contemporaneously with funding Credit Facility #3 in an amount equal to (i) the Credit Extensions (as defined in the Senior Term Facility) in respect of Credit Facility #3, multiplied by (ii) 0.50%. The Prior Warrant allowed the Warrantholder, an affiliate of the lender, to purchase 373,626 shares of the Company’s common stock at an exercise price equal to $1.82 per share for a 10-year period ending September 30, 2031. Pursuant to, and in accordance with, the terms and conditions of the A&R Warrant, which amended and restated the Prior Warrant, the Warrantholder can purchase 800,000 shares of the Company’s common stock at an exercise price equal to $0.88 per share for a 10-year period ending on June 30, 2033. Pursuant to the A&R Registration Rights Agreement, the Company registered the shares underlying the A&R Warrant effective August 18, 2023. The amendment of the warrant resulted in an increase in the fair value of the warrant, which has been accounted for as a lender fee. The Fourth Amendment has been accounted for as a debt modification, as the new loan is not considered substantially different from the existing loan. In connection with the Fourth Amendment, the Company increased the accrued exit fee, which is recorded as both a debt discount and an increase to the principal amount of debt, to $600. The debt discount, which also includes third party costs incurred in connection with the Third Amendment of $13, is being recognized as interest expense over the term of the Senior Term Facility using the effective-interest method. The unamortized debt discount was $525 as of March 31, 2024. The Company recognized interest expense of $524 during the three months ended March 31, 2024, of which $31 was related to the amortization of the debt discount. The Company recognized interest expense of $286 during the three months ended March 31, 2023, of which $41 was related to the amortization of the debt discount. Future minimum principal payments at March 31 2026 $ 3,750 2027 7,500 2028 3,750 15,000 Exit fee 600 15,600 Less: unamortized debt discount (525 ) Long-term debt, net $ 15,075 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2024 | |
Stock-Based Compensation [Abstract] | |
Stock-Based Compensation | Note 9 Stock-Based Compensation: The Company’s 2016 Omnibus Incentive Stock Plan (“2016 Plan”), as amended, has reserved up to 7,832,651 shares of common stock for future issuance. s of March 31, 2024, there were 2,034,437 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 values and records compensation expense on a straight‑line basis over the requisite service period of the awards. The Company recorded share‑based compensation expense (for all awards and modifications, if any) in the accompanying condensed consolidated statements of operations as follows: Three Months Ended March 31, 2024 2023 Selling and marketing* (37 ) 43 General and administrative 149 282 $ 112 $ 325 *Selling Stock Options The following table summarizes stock option activity for the three months ended March 31, 2024: Number of Shares Under Option Plan Weighted- Average Exercise Price per Option Weighted- Average Remaining Contractual Term (in years) Outstanding at January 1, 2024 7,728,721 $ 1.11 Granted 100,000 0.54 Forfeited and expired (2,437,652 ) 1.55 Outstanding at March 31, 2024 5,391,069 $ 0.89 8.7 Exercisable at March 31, 2024 1,231,465 $ 1.70 6.1 Vested and expected to vest at March 31, 2024 5,391,069 $ 0.89 8.7 As of March 31, 2024, the total unrecognized compensation expense related to unvested stock option awards was $1,687, which the Company expects to recognize over a weighted average period of approximately 2.9 years. The options outstanding and exercisable at March 31, 2024 had no intrinsic value. For the three months ended March 31, 2024, the grant date fair value of all option grants was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions: Expected volatility 77.0 % Risk‑free rate 4.1 % Expected term (in years) 6.3 Dividend rate 0.00 % Restricted Stock Units Restricted stock units have been issued to certain board members. Activity in restricted stock units is summarized in the following table: Number of Units Weighted- Average Grant Date Fair Value Unvested at January 1, 2024 22,654 $ 1.03 Vested (5,663 ) 1.03 Unvested at March 31, 2024 16,991 $ 1.03 As of March 31, 2024, the total unrecognized compensation expense related to unvested restricted stock units was $9, which the Company expects to recognize over a weighted average period of approximately 0.3 years. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2024 | |
Income Taxes [Abstract] | |
Income Taxes | Note 10 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. No income tax expense was incurred for the three months ended March 31, 2024 and 2023. |
Business and Geographical Repor
Business and Geographical Reporting Segments | 3 Months Ended |
Mar. 31, 2024 | |
Business and Geographical Reporting Segments [Abstract] | |
Business and Geographical Reporting Segments | Note 11 B usiness and Geographical Reporting Segments The Company organized its business into two operating segments to better align its organization based upon the Company’s management structure, products and services offered, markets served and types of customers, as follows. The Dermatology Recurring Procedures segment derives its revenues from the usage of its equipment by dermatologists to perform XTRAC and TheraClear procedures. The Dermatology Procedures Equipment segment generates revenues from the sale of equipment, such as lasers and lamp products. Management reviews financial information presented on an operating segment basis for the purposes of making certain operating decisions and assessing financial performance. Unallocated operating expenses include costs that are not specific to a particular segment but are general to the group; included are expenses incurred for administrative and accounting staff, general liability and other insurance, professional fees and other similar corporate expenses. Interest and other financing income (expense) is also not allocated to the operating segments. The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended March 31, 2024 Dermatology Recurring Procedures Dermatology Procedures Equipment Total Revenues, net $ 4,696 $ 2,058 $ 6,754 Cost of revenues 2,195 1,479 3,674 Gross profit 2,501 579 3,080 Gross profit % 53.3 % 28.1 % 45.6 % Allocated expenses: Engineering and product development 196 45 241 Selling and marketing 2,753 265 3,018 Unallocated expenses — — 2,710 2,949 310 5,969 (Loss) income from operations (448 ) 269 (2,889 ) Interest expense — — (524 ) Interest income — — 45 Net (loss) income $ (448 ) $ 269 $ (3,368 ) Three Months Ended March 31, 2023 Dermatology Recurring Procedures Dermatology Procedures Equipment Total Revenues, net $ 5,209 $ 2,358 $ 7,567 Cost of revenues 2,020 1,159 3,179 Gross profit 3,189 1,199 4,388 Gross profit % 61.2 % 50.8 % 58.0 % Allocated expenses: Engineering and product development 245 70 315 Selling and marketing 3,353 389 3,742 Unallocated expenses — — 2,917 3,598 459 6,974 (Loss) income from operations (409 ) 740 (2,586 ) Interest expense — — (286 ) Interest income — — 37 Net (loss) income $ (409 ) $ 740 $ (2,835 ) For the three months ended March 31, 2024 and 2023, depreciation and amortization by reportable segment were as follows: Three Months Ended March 31, 2024 2023 Dermatology recurring procedures $ 1,114 $ 1,213 Dermatology procedures equipment 132 180 Unallocated expenses 3 4 Total $ 1,249 $ 1,397 The following tables present the Company’s revenue disaggregated by geographical region for the three months ended March 31, 2024 Three Months Ended March 31, 2024 Dermatology Recurring Procedures Dermatology Procedures Equipment Total Domestic $ 4,320 $ 141 $ 4,461 Foreign 376 1,917 2,293 Total $ 4,696 $ 2,058 $ 6,754 Three Months Ended March 31, 2023 Domestic $ 4,847 $ 496 $ 5,343 Foreign 362 1,862 2,224 Total $ 5,209 $ 2,358 $ 7,567 |
Significant Customer Concentrat
Significant Customer Concentrations | 3 Months Ended |
Mar. 31, 2024 | |
Significant Customer Concentrations [Abstract] | |
Significant Customer Concentrations | Note 12 Significant Customer Concentrations: For the three months ended March 31, 2024, revenues from sales to one customer, an international distributor from which the Company earned dermatology procedures equipment revenues, were $1,102, or 16.3%, of total revenues for such period. There were no amounts receivable from this customer as of March 31, 2024. For the three months ended March 31, 2023, the Company did not have any customers which accounted for more than 10% of its revenues. One customer represented 12.5% of net accounts receivable as of March 31, 2024. This customer also represented 16.5% of net accounts receivable as of December 31, 2023. No other customer represented more than 10% of net accounts receivable as of March 31, 2024 or December 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 13 Commitments and Contingencies: 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 12 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 one In March 2024, the Company terminated the existing leases for its California facilities and concurrently executed new leases that effectively extended the terms of the leases for five years, which has been accounted for as a lease modification. The ROU assets and operating lease liabilities were remeasured at the modification date, resulting in an increase to both balances of $977 during the three months ended March 31, 2024. There were no lease modifications during the three months ended March 31, 2023. Operating lease costs were $106 for each of the three months ended March 31, 2024 and 2023. Cash paid for amounts included in the measurement of operating lease liabilities was $112 and $96 for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024, the weighted average incremental borrowing rate was 11.94% and the weighted average remaining lease term was 4.7 years. The following table summarizes the Company’s operating lease maturities as of March 31, 2024: Remaining 2024 $ 341 2025 463 2026 334 2027 290 2028 301 Thereafter 231 Total remaining lease payments 1,960 Less: imputed interest (494 ) Total lease liabilities $ 1,466 Accrued State Sales and Use Tax Matters The Company records state sales tax collected and remitted for its customers on dermatology procedures 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 within the condensed consolidated statements of operations. The Company believes its state sales and use tax accruals have been 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, the basis for measurement of the state sales and use tax is calculated in accordance with ASC 405, Liabilities 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 states of New York and California have assessed the Company an aggregate of $3,943 including penalties and interest. The audits cover the period from March 2014 through November 2022. The Company received notification that an administrative state judge in New York issued an opinion finding in favor of the Company that the sale of XTRAC treatment codes was not taxable as sales tax with respect to that state’s first assessment. This ruling covers $1,484 of the total $3,943 of assessments. The relevant taxing authority filed an appeal of the administrative law judge’s finding and, following the submission of legal briefs by both sides and oral argument held in January 2022, on May 6, 2022, the Company received a written decision from the State of New York Appeals Tribunal (“Tribunal”) overturning the favorable sales tax determination of the administrative law judge. The Company appealed the Tribunal’s decision to the New York State Appellate Division (“Appellate Division”), and posted the required appellate bond in the form of cash collateral. Oral argument was held by the Appellate Division on January 18, 2024. On March 8, 2024, the Company received a decision from the Appellate Division ruling against it in the matter of its sales tax appeal, affirming the Tribunal’s ruling that the Company’s sale of XTRAC treatment codes is subject to sales tax. The Appellate Division concluded that, through the usage arrangements, the Company’s customers had possession of the laser devices and had a license and ability to use the laser devices. The Appellate Division also agreed with the Tribunal that the primary function analysis was not applicable in this matter. On April 11, 2024, the Company filed a motion for leave to appeal the Appellate Division’s decision to the New York State Court of Appeals. The Company is in the administrative process of appeal with respect to the remaining $1,273 of assessments in the State of New York. The State of California has made aggregate assessments of $1,186 including penalties and interest. The audits cover the period from June 2018 through June 2022. The Company is in the administrative process of appeal in this jurisdiction as well. 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 prevails, 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 precise scope, timing and time periods at issue, as well as the final outcomes of the investigations and judicial proceedings, remain uncertain. Accordingly, the Company’s estimate may change from time to time, and actual losses could vary. Contingent Consideration In January 2022, the Company acquired certain assets related to the TheraClear devices from Theravant Corporation (“Theravant”). Theravant is eligible to receive up to $3,000 in future earnout payments upon the achievement of certain annual net revenue milestones ($1,000 of which is due upon the earlier of achieving a revenue target or July 2025), up to $20,000 in future royalty payments based upon a percentage of gross profit from future domestic sales ranging from 10-20%, 25% of gross profit from international sales over the subsequent four-year period, and up to $500 in future milestone payments upon the achievement of certain commercialization related targets. Through March 31, 2024, the Company has incurred $66 of royalty and gross profit payments based on gross profit from domestic and international sales. Milestone Payments In January 2022, the Company entered into a Development Agreement (the “Development Agreement”) with Theravant. Under the Development Agreement, the Company will reimburse Theravant for costs incurred in further developing certain TheraClear technology and other healthcare products and methods for the medical aesthetic marketplace. In connection with the development of three devices, Theravant is eligible to receive $500 upon FDA clearance for each device and $500 upon achievement of certain net revenue targets for each device, aggregating to $3,000 of potential future milestone payments under the Development Agreement. The Development Agreement has a three-year term, unless terminated sooner by either party. Legal Matters In the ordinary course of business, the Company is routinely a defendant in or party 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. On April 1, 2022, a proposed representative class action under California’s Private Attorneys General Act (“PAGA”) was filed in Superior Court of California, County of San Diego against the Company and an employment agency which provided the Company with temporary employees. The complaint alleges various violations of the California Labor Code, including California’s wage and hour laws, relating to current and former non-exempt employees of the Company. The complaint seeks class status and payments for allegedly unpaid compensation and attorney’s fees. In a related matter, the attorneys in this matter and the proposed class representative, in a letter dated March 12, 2022, to the California Labor & Workforce Development Agency made nearly identical claims seeking the right to pursue a PAGA action against the Company and the employment agency. On or about May 16, 2022, the plaintiff filed a First Amended Complaint adding a PAGA claim to the action. On or about June 2, 2022, the plaintiff filed an Application to Dismiss Class and Individual Claim without prejudice, in an attempt to pursue a PAGA only complaint. On or about June 30, 2022, the parties entered into a stipulation to allow the plaintiff to file a Second Amended Complaint to clarify the PAGA claim and to stay the pending action to allow an attempt at resolution through mediation. The mediation was held on February 23, 2023, and the matter was settled on terms agreeable to the Company. The settlement, which requires the Company to pay $106, was subject to the right of individual class members to opt out of the settlement and proceed on their own. No individual has requested to opt out of the settlement, and on April 5, 2024, an Order Granting Final Approval of the settlement was entered in the Superior Court. As of March 31, 2024, $106 has been accrued for this matter. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2024 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14 Subsequent Events: On April 26, 2024, the Company announced that it will effect a 1-for- 10 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Mar. 31, 2024 | |
Insider Trading Arrangements [Line Items] | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
The Company (Policies)
The Company (Policies) | 3 Months Ended |
Mar. 31, 2024 | |
The Company [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and Photomedex India Private Limited, 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, 2023 has been derived from the audited consolidated financial statements at that date. Operating results and cash flows for the three months ended March 31, 2024 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2024 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 condensed or 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, 2023 (the “2023 Form 10-K”), and other forms filed with the SEC from time to time. Dollar amounts included herein are in thousands, except per share amounts. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation, including the impact on the condensed consolidated statement of cash flows of the reclassification of lasers-in-process from inventories to property and equipment, net. |
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 2023 Form 10-K, and there have been no changes to the Company’s significant accounting policies during the three months ended March 31, 2024. |
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 the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. The Company’s significant estimates and judgments include revenue recognition with respect to deferred revenues and the contract term and valuation allowances of accounts receivable, inputs used when evaluating goodwill for impairment, inputs used in the valuation of contingent consideration, state sales and use tax accruals, the estimated useful lives of intangible assets, and the valuation allowance related to deferred tax assets. Actual results could differ from those estimates. |
Fair Value Measurements | Fair Value Measurements The Company measures financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires the use of observable inputs and minimizes the use of unobservable inputs. The Company defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: • Level 1 – quoted market prices in active markets for identical assets or liabilities. • Level 2 – observable inputs other than quoted prices in active markets for identical assets and liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. • Level 3 – inputs that are generally unobservable and typically reflect the Company’s estimate of assumptions that market participants would use in pricing the asset or liability. The fair values of cash and cash equivalents and restricted cash are based on their respective demand values, which are equal to the carrying values. The carrying values of all short-term monetary assets and liabilities are estimated to approximate their fair values due to the short-term nature of these instruments. As of March 31, 2024 and December 31, 2023, the carrying value of the Company’s long-term debt approximated its fair value due to its variable interest rate. |
Accrued Warranty Costs | 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 months ended March 31, 2024 and 2023 is summarized as follows: Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 303 $ 207 Additions 39 27 Expirations and claims satisfied (64 ) (5 ) Total 278 229 Less current portion within accrued expenses and other current liabilities (175 ) (152 ) Balance within deferred revenues and other liabilities $ 103 $ 77 |
Net Loss Per Share | Net Loss Per Share Basic net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding during each period. Diluted loss per share of common stock includes the effect, if any, from the potential exercise or conversion of securities such as unvested restricted stock awards, stock options and warrants for common stock which would result in the issuance of incremental shares of common stock. For diluted net loss per share, the weighted-average number of shares of common stock is the same as for basic net loss per share due to the fact that when a net loss exists, dilutive securities are not included in the calculation as the impact is anti-dilutive. The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: March 31, 2024 2023 Stock options 5,391,069 4,464,714 Common stock warrants 800,000 373,626 Restricted stock units 22,654 119,597 6,213,723 4,957,937 |
Accounting Pronouncements Recently Adopted and Not Yet Adopted | Recent Accounting Pronouncements Recently Adopted In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s own Equity . Recent Accounting Pronouncements Not Yet Adopted In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, |
The Company (Tables)
The Company (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
The Company [Abstract] | |
Accrued Warranty Costs Activity | The activity in the warranty accrual during the three months ended March 31, 2024 and 2023 is summarized as follows: Three Months Ended March 31, 2024 2023 Balance, beginning of period $ 303 $ 207 Additions 39 27 Expirations and claims satisfied (64 ) (5 ) Total 278 229 Less current portion within accrued expenses and other current liabilities (175 ) (152 ) Balance within deferred revenues and other liabilities $ 103 $ 77 |
Antidilutive Securities Excluded from Computation of Net Loss Per Share | The following potentially dilutive securities have been excluded from the computation of diluted weighted-average shares of common stock outstanding, as they would be anti-dilutive: March 31, 2024 2023 Stock options 5,391,069 4,464,714 Common stock warrants 800,000 373,626 Restricted stock units 22,654 119,597 6,213,723 4,957,937 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Revenue Recognition [Abstract] | |
Future Undiscounted Fixed Treatment Code Payments from International Dermatology Recurring Procedures | The following table summarizes the Company’s expected future undiscounted fixed treatment code payments from international dermatology recurring procedures, the Company’s only long-term arrangements, as of March 31, 2024: Remaining 2024 $ 1,064 2025 934 2026 716 2027 445 2028 19 Total $ 3,178 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Inventories [Abstract] | |
Inventories | Inventories consist of the following: March 31, 2024 December 31, 2023 Raw materials and work-in-process $ 2,421 $ 2,192 Finished goods 274 481 $ 2,695 $ 2,673 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Property and Equipment, net [Abstract] | |
Components of Property and Equipment | Property and equipment consist of the following: March 31, 2024 December 31, 2023 Lasers placed-in-service $ 32,940 $ 32,095 Equipment, computer hardware and software 293 293 Furniture and fixtures 240 240 Leasehold improvements 149 203 Lasers-in-process 3,121 3,231 36,743 36,062 Less: accumulated depreciation and amortization (25,017 ) (24,284 ) $ 11,726 $ 11,778 |
Intangible Assets, net (Tables)
Intangible Assets, net (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Intangible Assets, net [Abstract] | |
Components of Intangible Assets | Intangible assets consist of the following: March 31, 2024 Balance Accumulated Amortization Net Book Value Core technology $ 5,700 $ (4,988 ) $ 712 Product technology 4,808 (3,896 ) 912 Customer relationships 6,900 (6,038 ) 862 Tradenames 1,500 (1,313 ) 187 Pharos customer lists 5,314 (1,162 ) 4,152 $ 24,222 $ (17,397 ) $ 6,825 December 31, 2023 Core technology $ 5,700 $ (4,845 ) $ 855 Product technology 4,808 (3,866 ) 942 Customer relationships 6,900 (5,865 ) 1,035 Tradenames 1,500 (1,275 ) 225 Pharos customer lists 5,314 (1,052 ) 4,262 $ 24,222 $ (16,903 ) $ 7,319 |
Estimated Future Amortization Expense for Intangible Assets | The following table summarizes the estimated future amortization expense for the above intangible assets for the next five years: Remaining 2024 1,477 2025 1,266 2026 561 2027 561 2028 561 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Accrued Expenses and Other Current Liabilities [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consist of the following: March 31, 2024 December 31, 2023 Warranty obligations $ 175 $ 180 Compensation and related benefits 1,667 1,679 State sales, use and other taxes 4,290 4,316 Professional fees and other 137 131 $ 6,269 $ 6,306 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Long-Term Debt [Abstract] | |
Future Minimum Principal Payments | Future minimum principal payments at March 31 2026 $ 3,750 2027 7,500 2028 3,750 15,000 Exit fee 600 15,600 Less: unamortized debt discount (525 ) Long-term debt, net $ 15,075 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Stock-Based Compensation [Abstract] | |
Share-based Compensation Expense | The Company recorded share‑based compensation expense (for all awards and modifications, if any) in the accompanying condensed consolidated statements of operations as follows: Three Months Ended March 31, 2024 2023 Selling and marketing* (37 ) 43 General and administrative 149 282 $ 112 $ 325 *Selling |
Stock Option Activity | The following table summarizes stock option activity for the three months ended March 31, 2024: Number of Shares Under Option Plan Weighted- Average Exercise Price per Option Weighted- Average Remaining Contractual Term (in years) Outstanding at January 1, 2024 7,728,721 $ 1.11 Granted 100,000 0.54 Forfeited and expired (2,437,652 ) 1.55 Outstanding at March 31, 2024 5,391,069 $ 0.89 8.7 Exercisable at March 31, 2024 1,231,465 $ 1.70 6.1 Vested and expected to vest at March 31, 2024 5,391,069 $ 0.89 8.7 |
Weighted Average Assumption Used for Grant Date Fair Value of Option Grants | For the three months ended March 31, 2024, the grant date fair value of all option grants was estimated at the time of grant using the Black-Scholes option-pricing model using the following weighted average assumptions: Expected volatility 77.0 % Risk‑free rate 4.1 % Expected term (in years) 6.3 Dividend rate 0.00 % |
Summary of Activity in Restricted Stock Units | Restricted stock units have been issued to certain board members. Activity in restricted stock units is summarized in the following table: Number of Units Weighted- Average Grant Date Fair Value Unvested at January 1, 2024 22,654 $ 1.03 Vested (5,663 ) 1.03 Unvested at March 31, 2024 16,991 $ 1.03 |
Business and Geographical Rep_2
Business and Geographical Reporting Segments (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Business and Geographical Reporting Segments [Abstract] | |
Segment Reporting Information by Segment | The following tables reflect results of operations from our business segments for the periods indicated below: Three Months Ended March 31, 2024 Dermatology Recurring Procedures Dermatology Procedures Equipment Total Revenues, net $ 4,696 $ 2,058 $ 6,754 Cost of revenues 2,195 1,479 3,674 Gross profit 2,501 579 3,080 Gross profit % 53.3 % 28.1 % 45.6 % Allocated expenses: Engineering and product development 196 45 241 Selling and marketing 2,753 265 3,018 Unallocated expenses — — 2,710 2,949 310 5,969 (Loss) income from operations (448 ) 269 (2,889 ) Interest expense — — (524 ) Interest income — — 45 Net (loss) income $ (448 ) $ 269 $ (3,368 ) Three Months Ended March 31, 2023 Dermatology Recurring Procedures Dermatology Procedures Equipment Total Revenues, net $ 5,209 $ 2,358 $ 7,567 Cost of revenues 2,020 1,159 3,179 Gross profit 3,189 1,199 4,388 Gross profit % 61.2 % 50.8 % 58.0 % Allocated expenses: Engineering and product development 245 70 315 Selling and marketing 3,353 389 3,742 Unallocated expenses — — 2,917 3,598 459 6,974 (Loss) income from operations (409 ) 740 (2,586 ) Interest expense — — (286 ) Interest income — — 37 Net (loss) income $ (409 ) $ 740 $ (2,835 ) |
Depreciation and Amortization by Reportable Segment | For the three months ended March 31, 2024 and 2023, depreciation and amortization by reportable segment were as follows: Three Months Ended March 31, 2024 2023 Dermatology recurring procedures $ 1,114 $ 1,213 Dermatology procedures equipment 132 180 Unallocated expenses 3 4 Total $ 1,249 $ 1,397 |
Disaggregation of Revenue by Geographical Region | The following tables present the Company’s revenue disaggregated by geographical region for the three months ended March 31, 2024 Three Months Ended March 31, 2024 Dermatology Recurring Procedures Dermatology Procedures Equipment Total Domestic $ 4,320 $ 141 $ 4,461 Foreign 376 1,917 2,293 Total $ 4,696 $ 2,058 $ 6,754 Three Months Ended March 31, 2023 Domestic $ 4,847 $ 496 $ 5,343 Foreign 362 1,862 2,224 Total $ 5,209 $ 2,358 $ 7,567 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2024 | |
Commitments and Contingencies [Abstract] | |
Operating Lease Maturities | The following table summarizes the Company’s operating lease maturities as of March 31, 2024: Remaining 2024 $ 341 2025 463 2026 334 2027 290 2028 301 Thereafter 231 Total remaining lease payments 1,960 Less: imputed interest (494 ) Total lease liabilities $ 1,466 |
The Company, Background (Detail
The Company, Background (Details) - XTRAC [Member] | 3 Months Ended |
Mar. 31, 2024 Systems | |
United States [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 907 |
International [Member] | |
Finite-Lived Intangible Assets, Net [Abstract] | |
Number of systems placed in dermatologists offices | 45 |
The Company, Accrued Warranty C
The Company, Accrued Warranty Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Activity of Warranty Accrual [Roll Forward] | |||
Balance, beginning of year | $ 303 | $ 207 | |
Additions | 39 | 27 | |
Expirations and claims satisfied | (64) | (5) | |
Total | 278 | 229 | |
Less current portion within accrued expenses and other current liabilities | (175) | (152) | $ (180) |
Balance within deferred revenues and other liabilities | $ 103 | $ 77 | |
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 |
The Company, Net Loss Per Share
The Company, Net Loss Per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Net Loss Per Share [Abstract] | ||
Potential common stock equivalents (in shares) | 6,213,723 | 4,957,937 |
Stock Options [Member] | ||
Net Loss Per Share [Abstract] | ||
Potential common stock equivalents (in shares) | 5,391,069 | 4,464,714 |
Common Stock Warrants [Member] | ||
Net Loss Per Share [Abstract] | ||
Potential common stock equivalents (in shares) | 800,000 | 373,626 |
Restricted Stock Units [Member] | ||
Net Loss Per Share [Abstract] | ||
Potential common stock equivalents (in shares) | 22,654 | 119,597 |
Liquidity (Details)
Liquidity (Details) - USD ($) $ in Thousands | 1 Months Ended | |
Oct. 31, 2021 | Mar. 31, 2024 | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | ||
Equity Distribution Agreement [Abstract] | ||
Term loan | $ 8,000 | |
MidCap Financial Trust [Member] | Senior Term Facility One [Member] | ||
Equity Distribution Agreement [Abstract] | ||
Term loan | 8,000 | |
MidCap Financial Trust [Member] | Senior Term Facility Two [Member] | ||
Equity Distribution Agreement [Abstract] | ||
Term loan | 7,000 | |
MidCap Financial Trust [Member] | Senior Term Facility Three [Member] | ||
Equity Distribution Agreement [Abstract] | ||
Term loan | $ 5,000 | |
At-the-Market Equity Offering [Member] | Maximum [Member] | ||
Equity Distribution Agreement [Abstract] | ||
Amount of common stock the Company may sell under equity distribution agreement | $ 11,000 |
Revenue Recognition, Summary (D
Revenue Recognition, Summary (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Treatment Equipment [Abstract] | |
Lease term | 36 months |
Renewal term | 1 year |
Minimum [Member] | |
Treatment Equipment [Abstract] | |
Notice period to cancel contract agreement | 30 days |
Maximum [Member] | |
Treatment Equipment [Abstract] | |
Notice period to cancel contract agreement | 60 days |
South Korea [Member] | |
Treatment Equipment [Abstract] | |
Lease term | 48 months |
Revenue Recognition, Future Und
Revenue Recognition, Future Undiscounted Fixed Payments from International Recurring Revenue Customers (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 628 |
International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | 3,178 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 251 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 1,064 |
Expected timing of satisfaction period | 9 months |
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 | $ 934 |
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 | $ 716 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 445 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | International [Member] | |
Remaining Performance Obligation [Abstract] | |
Future undiscounted fixed payments from international recurring revenue customers | $ 19 |
Expected timing of satisfaction period | 1 year |
Revenue Recognition, Remaining
Revenue Recognition, Remaining Performance Obligation (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 628 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |
Remaining Performance Obligation [Abstract] | |
Remaining performance obligations | $ 251 |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Minimum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | Maximum [Member] | |
Remaining Performance Obligation [Abstract] | |
Expected timing of satisfaction period | 3 years |
Revenue Recognition, Contract L
Revenue Recognition, Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Contract with Customer, Liability [Abstract] | ||
Short-term contract liabilities | $ 251 | |
Long-term contract liabilities | 377 | |
Change in Contract with Customer, Liability [Abstract] | ||
Contract liabilities recognized as revenue | $ 76 | $ 132 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Schedule of inventory [Abstract] | |||
Raw materials and work-in-process | $ 2,421 | $ 2,192 | |
Finished goods | 274 | 481 | |
Inventories, net | 2,695 | $ 2,673 | |
Inventories wrote off | $ 141 | $ 0 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 36,743 | $ 36,062 | |
Less: accumulated depreciation and amortization | (25,017) | (24,284) | |
Property and equipment, net | 11,726 | 11,778 | |
Depreciation and amortization expense | 755 | $ 677 | |
Lasers Placed-In-Service [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 32,940 | 32,095 | |
Equipment, Computer Hardware and Software [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 293 | 293 | |
Furniture and Fixtures [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 240 | 240 | |
Leasehold Improvements [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | 149 | 203 | |
Lasers-In-Process [Member] | |||
Property, Plant and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 3,121 | $ 3,231 |
Intangible Assets, net, Summary
Intangible Assets, net, Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | Dec. 31, 2023 | |
Finite-Lived Intangible Assets, Net [Abstract] | |||
Balance | $ 24,222 | $ 24,222 | |
Accumulated amortization | (17,397) | (16,903) | |
Intangible assets, net | 6,825 | 7,319 | |
Amortization expense of intangible assets | 494 | $ 720 | |
Impairment of intangible assets | 0 | $ 0 | |
Core Technology [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Balance | 5,700 | 5,700 | |
Accumulated amortization | (4,988) | (4,845) | |
Intangible assets, net | 712 | 855 | |
Product Technology [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Balance | 4,808 | 4,808 | |
Accumulated amortization | (3,896) | (3,866) | |
Intangible assets, net | 912 | 942 | |
Customer Relationships [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Balance | 6,900 | 6,900 | |
Accumulated amortization | (6,038) | (5,865) | |
Intangible assets, net | 862 | 1,035 | |
Tradenames [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Balance | 1,500 | 1,500 | |
Accumulated amortization | (1,313) | (1,275) | |
Intangible assets, net | 187 | 225 | |
Pharos Customer Lists [Member] | |||
Finite-Lived Intangible Assets, Net [Abstract] | |||
Balance | 5,314 | 5,314 | |
Accumulated amortization | (1,162) | (1,052) | |
Intangible assets, net | $ 4,152 | $ 4,262 |
Intangible Assets, net, Estimat
Intangible Assets, net, Estimated Amortization Expense (Details) $ in Thousands | Mar. 31, 2024 USD ($) |
Estimated amortization expense [Abstract] | |
Remaining 2024 | $ 1,477 |
2025 | 1,266 |
2026 | 561 |
2027 | 561 |
2028 | $ 561 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 | Mar. 31, 2023 |
Accrued Expenses and Other Current Liabilities [Abstract] | |||
Warranty obligations | $ 175 | $ 180 | $ 152 |
Compensation and related benefits | 1,667 | 1,679 | |
State sales, use and other taxes | 4,290 | 4,316 | |
Professional fees and other | 137 | 131 | |
Accrued expenses and other current liabilities | $ 6,269 | $ 6,306 |
Long-Term Debt, Senior Term Fac
Long-Term Debt, Senior Term Facility (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | ||
Sep. 06, 2022 | Mar. 31, 2024 USD ($) Payment $ / shares shares | Mar. 31, 2023 USD ($) | |
Long-Term Debt [Abstract] | |||
Unamortized debt discount | $ 525 | ||
Exit fee | 600 | ||
SOFR [Member] | |||
Long-Term Debt [Abstract] | |||
Term of variable rate | 1 month | ||
Interest rate floor | 0.50% | ||
Basis spread on variable rate | 0.10% | ||
MidCap Financial Trust [Member] | Senior Term Facility [Member] | |||
Long-Term Debt [Abstract] | |||
Face amount of debt | $ 8,000 | ||
Maturity date | Sep. 01, 2026 | ||
Frequency of payment | monthly | ||
Number of monthly principal payments plus interest | Payment | 24 | ||
Notice period | 30 days | ||
Prepayment fee if prepayment is made within twelve months | 4% | ||
Prepayment fee if prepayment is made between twelve months and twenty-four months | 3% | ||
Prepayment fee if prepayment is made between twenty-four months and thirty-six months | 2% | ||
Prepayment fee if prepayment is made after thirty-six months | 1% | ||
Minimum net revenue threshold | $ 29,000 | ||
Minimum net revenue threshold by December 31, 2026 | 33,000 | ||
Minimum net revenue threshold by trailing 12-month period | 33,000 | ||
Minimum unrestricted cash | 3,000 | ||
Interest expense | 524 | $ 286 | |
Amortization of debt discount | 31 | $ 41 | |
MidCap Financial Trust [Member] | Senior Term Facility [Member] | Minimum [Member] | |||
Long-Term Debt [Abstract] | |||
Prepayment of debt | $ 5,000 | ||
MidCap Financial Trust [Member] | Senior Term Facility [Member] | A&R Warrant [Member] | |||
Long-Term Debt [Abstract] | |||
Warrants issued (in shares) | shares | 800,000 | ||
Warrants, exercise price (in dollars per share) | $ / shares | $ 0.88 | ||
Warrants, expected term | 10 years | ||
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 | ||
Warrants, expected term | 10 years | ||
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, Amendment [Member] | |||
Long-Term Debt [Abstract] | |||
Face amount of debt | $ 20,000 | ||
Forward looking term | 30 days | ||
Interest rate floor | 3.50% | ||
Amount available to be drawn under condition | $ 30,000 | ||
Effective interest rate | 13.94% | ||
Required percentage of certain insurance proceeds | 100% | ||
MidCap Financial Trust [Member] | Senior Term Facility, Amendment [Member] | SOFR [Member] | |||
Long-Term Debt [Abstract] | |||
Term of variable rate | 1 month | ||
Base interest rate | 0.10% | ||
Basis spread on variable rate | 7.50% | ||
MidCap Financial Trust [Member] | Credit Facility #1 [Member] | |||
Long-Term Debt [Abstract] | |||
Amount drawn | $ 8,000 | ||
MidCap Financial Trust [Member] | Credit Facility #2 [Member] | |||
Long-Term Debt [Abstract] | |||
Amount drawn | $ 7,000 | ||
Percentage of administrative agent fess | 0.50% | ||
Percentage of credit extension | 4% | ||
MidCap Financial Trust [Member] | Credit Facility #3 [Member] | |||
Long-Term Debt [Abstract] | |||
Amount available for amount drawn | $ 5,000 | ||
Percentage of credit extension | 0.50% | ||
Percentage of exit fee | 4% | ||
MidCap Financial Trust [Member] | Senior Term Facility, Third Amendment [Member] | |||
Long-Term Debt [Abstract] | |||
Unamortized debt discount | $ 525 | ||
Third party costs incurred | 13 | ||
MidCap Financial Trust [Member] | Senior Term Facility, Fourth Amendment [Member] | |||
Long-Term Debt [Abstract] | |||
Exit fee | $ 600 |
Long-Term Debt, Future Minimum
Long-Term Debt, Future Minimum Principal Payments (Details) - USD ($) $ in Thousands | Mar. 31, 2024 | Dec. 31, 2023 |
Future Payments for Long-Term Debt [Abstract] | ||
2026 | $ 3,750 | |
2027 | 7,500 | |
2028 | 3,750 | |
Total | 15,000 | |
Exit fee | 600 | |
Long term debt after exit fee | 15,600 | |
Less: unamortized debt discount | (525) | |
Long-term debt, net | $ 15,075 | $ 15,044 |
Stock-Based Compensation, Summa
Stock-Based Compensation, Summary (Details) - 2016 Omnibus Incentive Plan [Member] | Mar. 31, 2024 shares |
Stock-based Compensation [Abstract] | |
Common stock reserved for future issuance (in shares) | 7,832,651 |
Number of shares available for issuance (in shares) | 2,034,437 |
Stock-Based Compensation, Share
Stock-Based Compensation, Share-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2024 | Mar. 31, 2023 | ||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | $ 112 | $ 325 | |
Selling and Marketing [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | [1] | (37) | 43 |
General and Administrative [Member] | |||
Stock-Based Compensation Expense [Abstract] | |||
Stock-based compensation expense | $ 149 | $ 282 | |
[1]Selling and marketing expense was negative during the three months ended March 31, 2024 due to the forfeiture of awards during the period. |
Stock-Based Compensation, Stock
Stock-Based Compensation, Stock Options (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Number of Shares under Option Plan [Abstract] | |
Outstanding at beginning period (in shares) | shares | 7,728,721 |
Granted (in shares) | shares | 100,000 |
Forfeited and expired (in shares) | shares | (2,437,652) |
Outstanding at end of period (in shares) | shares | 5,391,069 |
Exercisable at end of period (in shares) | shares | 1,231,465 |
Vested and expected to vest (in shares) | shares | 5,391,069 |
Weighted-Average Exercise Price per Option [Abstract] | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 1.11 |
Granted (in dollars per share) | $ / shares | 0.54 |
Forfeited and expired (in dollars per share) | $ / shares | 1.55 |
Outstanding at end of period (in dollars per share) | $ / shares | 0.89 |
Exercisable at end of period (in dollars per share) | $ / shares | 1.7 |
Vested and expected to vest (in dollars per share) | $ / shares | $ 0.89 |
Weighted-Average Remaining Contractual Term [Abstract] | |
Outstanding | 8 years 8 months 12 days |
Exercisable | 6 years 1 month 6 days |
Vested and expected to vest | 8 years 8 months 12 days |
Unrecognized compensation expense | $ | $ 1,687 |
Unrecognized compensation expense, weighted average period | 2 years 10 months 24 days |
Intrinsic value of options outstanding | $ | $ 0 |
Intrinsic value of options exercisable | $ | $ 0 |
Stock-Based Compensation, Fair
Stock-Based Compensation, Fair Value Assumptions (Details) | 3 Months Ended |
Mar. 31, 2024 | |
Fair Value Assumptions [Abstract] | |
Expected volatility | 77% |
Risk-free rate | 4.10% |
Expected term (in years) | 6 years 3 months 18 days |
Dividend rate | 0% |
Stock-Based Compensation, Restr
Stock-Based Compensation, Restricted Stock Units (Details) - Restricted Stock Units [Member] $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2024 USD ($) $ / shares shares | |
Number of Units [Abstract] | |
Unvested at beginning of period (in shares) | shares | 22,654 |
Vested (in shares) | shares | (5,663) |
Unvested at end of period (in shares) | shares | 16,991 |
Weighted Average Grant Date Fair Value [Abstract] | |
Unvested at beginning of period (in dollars per share) | $ / shares | $ 1.03 |
Vested (in dollars per share) | $ / shares | 1.03 |
Unvested at end of period (in dollars per share) | $ / shares | $ 1.03 |
Unrecognized Compensation Expense [Abstract] | |
Unrecognized compensation expense | $ | $ 9 |
Weighted average period of recognition | 3 months 18 days |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Income Taxes [Abstract] | ||
Income tax expense | $ 0 | $ 0 |
Business and Geographical Rep_3
Business and Geographical Reporting Segments, Results of Operations from Business Segments (Details) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 USD ($) Segment | Mar. 31, 2023 USD ($) | |
Business Segments [Abstract] | ||
Number of operating segments | Segment | 2 | |
Results of Operations from Business Segments [Abstract] | ||
Revenues, net | $ 6,754 | $ 7,567 |
Cost of revenues | 3,674 | 3,179 |
Gross profit | $ 3,080 | $ 4,388 |
Gross profit % | 45.60% | 58% |
Allocated expenses [Abstract] | ||
Engineering and product development | $ 241 | $ 315 |
Selling and marketing | 3,018 | 3,742 |
Unallocated expenses | 2,710 | 2,917 |
Total operating expenses | 5,969 | 6,974 |
Loss from operations | (2,889) | (2,586) |
Interest expense | (524) | (286) |
Interest income | 45 | 37 |
Net loss | (3,368) | (2,835) |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues, net | 4,696 | 5,209 |
Cost of revenues | 2,195 | 2,020 |
Gross profit | $ 2,501 | $ 3,189 |
Gross profit % | 53.30% | 61.20% |
Allocated expenses [Abstract] | ||
Engineering and product development | $ 196 | $ 245 |
Selling and marketing | 2,753 | 3,353 |
Unallocated expenses | 0 | 0 |
Total operating expenses | 2,949 | 3,598 |
Loss from operations | (448) | (409) |
Interest expense | 0 | 0 |
Interest income | 0 | 0 |
Net loss | (448) | (409) |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||
Results of Operations from Business Segments [Abstract] | ||
Revenues, net | 2,058 | 2,358 |
Cost of revenues | 1,479 | 1,159 |
Gross profit | $ 579 | $ 1,199 |
Gross profit % | 28.10% | 50.80% |
Allocated expenses [Abstract] | ||
Engineering and product development | $ 45 | $ 70 |
Selling and marketing | 265 | 389 |
Unallocated expenses | 0 | 0 |
Total operating expenses | 310 | 459 |
Loss from operations | 269 | 740 |
Interest expense | 0 | 0 |
Interest income | 0 | 0 |
Net loss | $ 269 | $ 740 |
Business and Geographical Rep_4
Business and Geographical Reporting Segments, Depreciation and Amortization by Reportable Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Depreciation and Amortization by Reportable Segment [Abstract] | ||
Depreciation and amortization | $ 1,249 | $ 1,397 |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||
Depreciation and Amortization by Reportable Segment [Abstract] | ||
Depreciation and amortization | 1,114 | 1,213 |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||
Depreciation and Amortization by Reportable Segment [Abstract] | ||
Depreciation and amortization | 132 | 180 |
Unallocated [Member] | ||
Depreciation and Amortization by Reportable Segment [Abstract] | ||
Depreciation and amortization | $ 3 | $ 4 |
Business and Geographical Rep_5
Business and Geographical Reporting Segments, Disaggregation of Revenue by Geographical Region (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2024 | Mar. 31, 2023 | |
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | $ 6,754 | $ 7,567 |
Domestic [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 4,461 | 5,343 |
Foreign [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 2,293 | 2,224 |
Operating Segments [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 4,696 | 5,209 |
Operating Segments [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 2,058 | 2,358 |
Operating Segments [Member] | Domestic [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 4,320 | 4,847 |
Operating Segments [Member] | Domestic [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 141 | 496 |
Operating Segments [Member] | Foreign [Member] | Dermatology Recurring Procedures [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | 376 | 362 |
Operating Segments [Member] | Foreign [Member] | Dermatology Procedures Equipment [Member] | ||
Disaggregation of Revenue by Geographical Region [Abstract] | ||
Revenues | $ 1,917 | $ 1,862 |
Significant Customer Concentr_2
Significant Customer Concentrations (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2024 USD ($) Customer | Mar. 31, 2023 USD ($) Customer | Dec. 31, 2023 USD ($) | |
Concentration Risk [Abstract] | |||
Revenues, net | $ 6,754 | $ 7,567 | |
Accounts receivable | $ 3,630 | $ 4,440 | |
Revenue [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Abstract] | |||
Number of significant customers | Customer | 1 | 0 | |
Revenue [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||
Concentration Risk [Abstract] | |||
Revenues, net | $ 1,102 | ||
Concentration risk percentage | 16.30% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | |||
Concentration Risk [Abstract] | |||
Number of significant customers | Customer | 1 | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | One Customer [Member] | |||
Concentration Risk [Abstract] | |||
Accounts receivable | $ 0 | ||
Concentration risk percentage | 12.50% | 16.50% |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Feb. 23, 2023 USD ($) | Jan. 31, 2022 USD ($) Device | Jan. 31, 2022 USD ($) | Mar. 31, 2024 USD ($) | Mar. 31, 2023 USD ($) | |
Lessee, Operating Lease, Description [Abstract] | |||||
Extended lease term | 5 years | ||||
Increase in ROU asset and operating lease liability resulting from lease modification | $ 977 | $ 0 | |||
Operating lease costs | 106 | 106 | |||
Cash paid for amounts included in measurement of operating lease liabilities | $ 112 | $ 96 | |||
Weighted average incremental borrowing rate | 11.94% | ||||
Weighted average remaining lease term | 4 years 8 months 12 days | ||||
Operating Lease Maturities [Abstract] | |||||
Remaining 2024 | $ 341 | ||||
2025 | 463 | ||||
2026 | 334 | ||||
2027 | 290 | ||||
2028 | 301 | ||||
Thereafter | 231 | ||||
Total remaining lease payments | 1,960 | ||||
Less: imputed interest | (494) | ||||
Total lease liabilities | $ 1,466 | ||||
Milestone Payments [Abstract] | |||||
Development agreement term | 3 years | ||||
Litigation Settlement [Abstract] | |||||
Litigation settlement to be paid | $ 106 | ||||
Litigation settlement accrued | $ 106 | ||||
TheraClear Corporation [Member] | |||||
Milestone Payments [Abstract] | |||||
Future earnout payment due upon revenue target | $ 1,000 | $ 1,000 | |||
Royalty and gross profit payments incurred | $ 66 | ||||
TheraClear Corporation [Member] | Foreign [Member] | |||||
Milestone Payments [Abstract] | |||||
Percentage of gross profit for future royalty payments for subsequent period | 25% | ||||
Subsequent period of gross profit for future royalty payments | 4 years | ||||
Tax Period from March 2014 through November 2022 [Member] | |||||
Sales and Use Tax Matters [Abstract] | |||||
Estimated tax positions subject to audit | $ 3,943 | ||||
Tax Period from March 2014 through November 2022 [Member] | Assessment One [Member] | |||||
Sales and Use Tax Matters [Abstract] | |||||
Assessment amount | 1,484 | ||||
Tax Period from March 2014 through November 2022 [Member] | Assessment Two [Member] | |||||
Sales and Use Tax Matters [Abstract] | |||||
Assessment amount | 1,273 | ||||
Tax Period From June 2018 Through June 2022 [Member] | |||||
Sales and Use Tax Matters [Abstract] | |||||
Estimated tax positions subject to audit | $ 1,186 | ||||
Minimum [Member] | |||||
Lessee, Operating Lease, Description [Abstract] | |||||
Remaining lease term | 1 year | ||||
Minimum [Member] | TheraClear Corporation [Member] | Domestic [Member] | |||||
Milestone Payments [Abstract] | |||||
Percentage of gross profit for future royalty payments for subsequent period | 10% | ||||
Maximum [Member] | |||||
Lessee, Operating Lease, Description [Abstract] | |||||
Remaining lease term | 5 years | ||||
Milestone Payments [Abstract] | |||||
Future earnout payments | 500 | $ 500 | |||
Future milestone payments | $ 3,000 | 3,000 | |||
Number of devices in development | Device | 3 | ||||
Maximum [Member] | Domestic [Member] | |||||
Milestone Payments [Abstract] | |||||
Future royalty payments | $ 500 | 500 | |||
Maximum [Member] | TheraClear Corporation [Member] | |||||
Milestone Payments [Abstract] | |||||
Future earnout payments | 3,000 | 3,000 | |||
Future milestone payments | 500 | 500 | |||
Maximum [Member] | TheraClear Corporation [Member] | Domestic [Member] | |||||
Milestone Payments [Abstract] | |||||
Future royalty payments | $ 20,000 | $ 20,000 | |||
Percentage of gross profit for future royalty payments for subsequent period | 20% |
Subsequent Events (Details)
Subsequent Events (Details) | Apr. 26, 2024 |
Subsequent Event [Member] | Common Stock [Member] | |
Subsequent Events [Abstract] | |
Reverse stock split ratio | 0.1 |