| Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
| Dec. 31, 2022 |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Use of Estimates | (a) Basis of Presentation and Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America, or GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Assets and liabilities which are subject to significant judgment and use of estimates include the allowance for doubtful accounts, sales return liability, provision for warranties, valuation of inventories, recoverability of long-lived assets, valuation allowances with respect to deferred tax assets, useful lives associated with property and equipment and finite lived intangible assets, and the valuation and assumptions underlying stock-based compensation and other equity instruments. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities. In addition, the Company engages the assistance of valuation specialists in concluding on fair value measurements in connection with debt and equity related instruments. On January 19, 2023, the Company effected a 1-for-10 reverse stock split (the “Reverse Stock Split”) of the Company’s issued and outstanding common stock, par value $ 0.01 per share (“Common Stock”). by the filing of a Certificate of Amendment (the “Certificate”) with the Secretary of State of the State of Delaware pursuant to the Delaware General Corporation Law. The Reverse Stock Split became effective on January 19, 2023. As a result of the Reverse Stock Split, every 10 shares of Common Stock issued and outstanding were automatically reclassified into one new share of common stock. The Reverse Stock Split did not modify any rights or preferences of the shares of Common Stock. Proportionate adjustments will be made to the exercise or conversion prices and the number of shares underlying the Company’s outstanding equity awards, convertible securities and warrants, as well as to the number of shares issued and issuable under the Company’s equity incentive plans. The Common Stock issued pursuant to the Reverse Stock Split will remain fully paid and non-assessable. The Reverse Stock Split will not affect the number of authorized shares of Common Stock or the par value of the Common Stock. All share information in the accompanying financial statements has been adjusted to reflect the results of the Reverse Stock Split. As a result of the miraDry Sale discussed in Note 2, the miraDry business met the criteria to be reported as discontinued operations. Therefore, the Company is reporting the historical results of miraDry, including the results of operations, cash flows, and related assets and liabilities, as discontinued operations for all periods presented herein through the date of the sale. Unless otherwise noted, the accompanying notes to the audited consolidated financial statements have all been revised to reflect continuing operations only. As discussed in Note 11, following the Sale the Company has one operating segment in continuing operations named Plastic Surgery, formerly known as Breast Products. |
| Liquidity and Going Concern | (b) Liquidity and Going Concern The consolidated financial statements of the Company have been prepared assuming the Company will continue as a going concern and in accordance with generally accepted accounting principles in the United States of America. The going concern basis of presentation assumes that the Company will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. Pursuant to the requirements of the Financial Accounting Standards Board’s Accounting Standards Codification (“ASC”) Topic 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern, management must evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern for one year from the date these consolidated financial statements are issued. This evaluation does not take into consideration the potential mitigating effect of management’s plans that have not been fully implemented or are not within the control of the Company as of the date the consolidated financial statements are issued. When substantial doubt exists under this methodology, management evaluates whether the mitigating effect of its plans sufficiently alleviates substantial doubt about the Company’s ability to continue as a going concern. The mitigating effect of management’s plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. Since the Company’s inception it has incurred recurring losses and cash outflows from operations and is forecasting continued losses and cash outflows from operations in the near term. During the twelve months ended December 31, 2022, the Company incurred net losses of $ 73.7 million and used $ 35.2 million of cash in continuing operations. As of December 31, 2022, the Company had cash and cash equivalents of $ 26.1 million. As a result of these conditions substantial doubt exists about our ability to continue as a going concern for a period of at least one year from the date of issuance of these consolidated financial statements. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. In an effort to alleviate these conditions, management is currently evaluating various cost savings measures in order to reduce operating expenses and cash outflows. However, the Company will need to generate a significant increase in net sales to further improve profitability and cash inflows, which is dependent upon continued growth in our plastic surgery segment and launch of new product. Additionally, we are evaluating various funding alternatives to improve liquidity and may seek to raise additional equity or debt capital, refinance our debt obligations or obtain waivers, and/or scale back or freeze our organic growth plans to manage our liquidity and capital resources. As the Company seeks additional sources of financing, there can be no assurance that such financing would be available to the Company on favorable terms or at all. The Company’s ability to obtain additional financing in the equity capital markets is subject to several factors, including market and economic conditions, the Company’s performance and investor sentiment with respect to the Company and its industry. These audited financial statements do not include any adjustments relating to the carrying amounts and classification of assets and liabilities that may be necessary should the Company be unable to continue as a going concern. During 2022, to fund ongoing operating and capital needs, the Company raised additional capital through the sale of equity securities and incremental debt financing, see Notes 7 and 10 to the consolidated financial statements for further details. However, these transactions did not alleviate that substantial doubt exists. Sale of the miraDry business Refer to Note 2 to the consolidated financial statements for further details on the sale of the miraDry business. Debt financing On October 12, 2022 , we entered into an Amended and Restated Facility Agreement (the “Restated Agreement”) with Deerfield Partners, L.P (“Deerfield”) to amend and restate the Company’s existing facility agreement with Deerfield dated March 11, 2020 (the “Existing Agreement”) pursuant to which the Company issued and sold to Deerfield an unsecured and subordinated convertible note in a principal amount of $ 60.0 million (the “Original Note”). Pursuant to the Restated Agreement, the maturity date of the Original Note was extended until March 11, 2026 , and the initial conversion price was reduced to $ 27.50 . On the date of the Restated Agreement, we also issued and sold an additional senior secured convertible note in a principal amount of $ 23.0 million (the "2022 Note” and, together with the Original Note, the “Convertible Notes”). The 2022 Note matures on the fifth anniversary of the issuance date and is convertible into shares of our common stock, par value $ 0.01 , at an initial conversion price of $ 10.00 . In connection with the Restated Agreement, on October 12, 2022, we entered into an Exchange Agreement with Deerfield pursuant to which Deerfield exchanged $ 10.0 million of principal under the Original Note for 296,774 shares of our common stock and a pre-funded warrant to purchase 1,054,395 shares of our common stock, reducing the outstanding principal amount of the Original Note to $ 50.0 million. We used the proceeds from the 2022 Note to repay in full the outstanding amounts under the Second Amended and Restated Credit and Security Agreement, and the Amended and Restated Credit and Security Agreement with MidCap Financial Trust and MidCap Funding IV Trust, respectively. See Note 7 to the consolidated financial statements for further details. Equity financing On October 25, 2022, we issued and sold 1,778,500 shares of our common stock and pre-funded warrants to purchase up to 2,221,499 shares of our common stock and warrants to purchase 3,999,999 shares of our common stock, at an offering price of $ 3.80 per share of common stock and warrant and $ 3.70 per pre-funded warrant and warrant, before underwriting discounts and commissions. The net proceeds to the Company were approximately $ 14.0 million, after deducting underwriting discounts and commissions and estimated expenses payable by the Company. See Note 10 to the consolidated financial statements for further details. |
| Cash and Cash Equivalents | (c) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less when purchased to be cash equivalents. Cash and cash equivalents consist primarily of cash in checking accounts and interest-bearing money market accounts. |
| Concentration of Credit and Supplier Risks | (d) Concentration of Credit and Supplier Risks Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash and cash equivalents. The Company’s cash and cash equivalents are deposited in demand accounts at financial institutions that management believes are creditworthy. The Company is exposed to credit risk in the event of default by these financial institutions for cash and cash equivalents in excess of amounts insured by the Federal Deposit Insurance Corporation, or FDIC. Management believes that the Company’s investments in cash and cash equivalents are financially sound and have minimal credit risk and the Company has not experienced any losses on its deposits of cash and cash equivalents. The Company relies on a limited number of third-party manufacturers for the manufacturing and supply of its products. This could result in the Company not being able to acquire the inventory needed to meet customer demand, which would result in possible loss of sales and affect operating results adversely. |
| Fair Value of Financial Instruments | (e) Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, customer deposits and sales return liability are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the contingent consideration and the convertible feature related to the convertible note are discussed in Note 4. The fair value of the Term loan is based on the amount of future cash flows associated with the instrument discounted using the Company’s market rate. As of December 31, 2021 , the carrying value of the Term loan was not materially different from the fair value and was deemed to approximate fair value. As of December 31, 2022 and 2021, the carrying value and fair value of the convertible note and 2022 Note were as follows (in thousands):
December 31, December 31,
2022 2021
Carrying value
Convertible Note $ 40,423 $ 47,477
2022 Note $ 15,396 $ -
Fair value
Convertible Note $ 33,794 $ 42,029
2022 Note $ 16,495 $ - The convertible note and 2022 note is carried on the consolidated balance sheets at amortized cost. The fair value is estimated using a binomial lattice model as of the convertible note issuance date and adjusted for market movements thereafter. The market for trading of the convertible note and 2022 note is not considered to be an active market and therefore the estimate of fair value is based on Level 2 inputs. |
| Fair Value Measurements | (f) Fair Value Measurements Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: • Level 1 — Quoted prices in active markets for identical assets or liabilities. • Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. |
| Property and Equipment | (g) Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight‑line method over the estimated useful life of the asset, generally three to fifteen years . Leasehold improvements are depreciated over the shorter of the lease term or the estimated useful life of the related asset. Upon retirement or sale of an asset, the cost and related accumulated depreciation or amortization are removed from the consolidated balance sheet and any resulting gain or loss is reflected in operations in the period realized. Maintenance and repairs are charged to operations as incurred. |
| Leases | (h) Leases The Company leases certain office space, warehouses, distribution facilities, manufacturing facilities and office equipment. The Company determines if an arrangement contains a lease at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Company obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. Operating and finance lease right-of-use, or ROU, assets and lease liabilities are recognized based on the present value of the future lease payments over the lease term at the commencement date. The Company determines its incremental borrowing rate based on the information available at the commencement date in determining the lease liabilities as the Company’s leases generally do not provide an implicit rate. The ROU assets also include any initial direct costs incurred and any lease payments made at or before the lease commencement date, less lease incentives received. Lease terms may include options to extend or terminate when the Company is reasonably certain that the option will be exercised. The Company elected to apply the short-term lease measurement and recognition exemption in which ROU assets and lease liabilities are not recognized for short-term leases. The Company’s lease agreements generally do not contain material residual value guarantees or material restrictive covenants. The Company’s leases of office space, warehouses, distribution facilities and manufacturing facilities are treated as operating leases and often contain lease and non-lease components. The Company has elected to account for these lease and non-lease components separately. Non-lease components for these assets are primarily comprised of common-area maintenance, utilities, and real estate taxes that are passed on from the lessor in proportion to the space leased by the Company and are recognized in operating expenses in the period in which the obligation for those payments was incurred. Lease cost for these operating leases is recognized on a straight-line basis over the lease term in operating expenses. The Company’s leases of office equipment are accounted for as finance leases as they meet one or more of the five finance lease classification criteria. Lease cost for these finance leases is comprised of amortization of the ROU asset and interest expense which are recognized in operating expenses and other income (expense), net. |
| Goodwill and Other Intangible Assets | (i) Goodwill and Other Intangible Assets Goodwill Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Goodwill is not amortized, but instead subject to impairment tests on at least an annual basis and whenever circumstances suggest that goodwill may be impaired. We review goodwill for impairment annually on October 1, or more frequently when events or circumstances indicate goodwill may be impaired. We may initially assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more-likely-than-not that the estimated fair value of a reporting unit is less than its carrying amount (“Step 0”). If determined that it is more-likely-than-not the estimated fair value of a reporting unit is less than its carrying amount, a quantitative assessment is performed (“Step 1”). Under FASB Topic ASC 350 Intangibles—Goodwill and Other, entities have an unconditional option to bypass the qualitative assessment described in the preceding sentences for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. Following the sale of the miraDry business, management has determined that we have a single reporting unit, Plastic Surgery, formerly known as Breast Products. Historically, the fair value of our reporting unit was estimated using a combination of the income approach, using a discounted cash flow methodology, and a market approach; the determination of discounted cash flows was based on our strategic plans and market conditions. Upon the sale of miraDry, which resulted in the Company having a single reporting unit, we consider our market capitalization (calculated as total common shares outstanding multiplied by the common equity price per share, as adjusted for a control premium factor, as necessary) to represent fair value. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. If the carrying amount of the reporting unit exceeds its fair value, an impairment charge is recorded in an amount equal to that excess, but not more than the carrying value of goodwill. As of October 1, 2022, we opted to bypass the qualitative assessment under Step 0 and proceeded directly to performing a quantitative goodwill impairment test under Step 1. As a result of the quantitative assessment, we determined that the carrying value of the reporting unit did not exceed its fair value. For the years ended December 31, 2022, 2021, and 2020 , the Company did no t record any goodwill impairment charges. Indefinite-lived intangible assets The Company tests indefinite-lived intangible assets for impairment at least on an annual basis as of October 1 of each fiscal year and whenever circumstances suggest the intangible assets may be impaired. The Company makes a qualitative assessment of whether it is more likely than not that the fair value of the intangible asset is less than its carrying amount. If the Company concludes that it is more likely than not that the fair value is less than its carrying amount from the qualitative assessment, the Company performs a quantitative analysis to compare the fair value of the intangible asset to its carrying amount. If the carrying value of the intangible asset exceeds its fair value, an impairment loss is recognized in an amount equal to the difference. The Company also evaluates the remaining useful life of an indefinite-lived intangible asset to determine whether events and circumstances continue to support an indefinite useful life. For the years ended December 31, 2022, 2021, and 2020 , the Company did no t record any indefinite-lived intangible assets impairment charges. Finite-lived intangible assets The intangible assets are amortized to the consolidated statement of operations based on estimated cash flows generated from the intangible asset over its estimated life. Each fiscal year the Company evaluates the estimated remaining useful lives of purchased intangible assets and whether events or changes in circumstance warrant a revision to the remaining periods of amortization. Judgments about the recoverability of purchased finite‑lived intangible assets are made whenever events or changes in circumstance indicate that impairment may exist. Recoverability of finite‑lived intangible assets is measured by comparison of the carrying amount of the asset group to the future undiscounted cash flows the asset group is expected to generate. If the sum of the future undiscounted cash flows is less than the carrying value, the Company will evaluate whether the fair value of each asset in the asset group exceeds its respective carrying value. If the fair value of any asset in the asset group is determined to be less than its carrying value, then the Company will recognize an impairment loss based on the excess of the carrying amount over the asset’s respective fair value. The Company’s fair value analysis of intangible assets utilizes methods under various income approaches. The Company values its customer relationships using an excess earnings method, which assumes the value of the asset is the discounted future cash flows derived from existing customers and requires the use of customer attrition rates and discount rates to determine the estimated fair value. The future revenues and free cash flow from existing customers are determined based upon actual results giving effect to management’s expected changes in operating results in future years. The attrition rate is based on average historical levels of customer attrition and the discount rate is based upon market participant assumptions using a defined peer group. Tradenames and developed technology are valued using a relief from royalty method, which assumes the value of the asset is the discounted cash flows of the amount that would be paid by a hypothetical market participant had they not owned the asset and instead licensed the asset from another company. This method requires the use of royalty rates which are determined based on comparable third-party license agreements involving similar assets and discount rates similar to the above to determine the estimated fair value. |
| Impairment of Tangible Long Lived Assets | (j) Impairment of Tangible Long‑Lived Assets The Company’s management routinely considers whether indicators of impairment of long‑lived assets are present. If such indicators are present, management determines whether the sum of the estimated undiscounted cash flows attributable to the asset group in question is less than their carrying value. If less, the Company will recognize an impairment loss based on the excess of the carrying amount of the assets over their respective fair values. Fair value is determined by discounted future cash flows, appraisals or other methods. If the assets determined to be impaired are to be held and used, the Company will recognize an impairment charge to the extent the present value of anticipated net cash flows attributable to the asset are less than the asset’s carrying value. The fair value of the asset will then become the asset’s new carrying value. There have been no impairments recorded for tangible long-lived assets during the years ended December 31, 2022, 2021, and 2020. |
| Derivative Financial Instruments | (k) Derivative Financial Instruments The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including stock purchase warrants and convertible notes, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the consolidated statements of operations. The assumptions used in these fair value estimates are based on the three-level valuation hierarchy for fair value measurement and represent Level 3 inputs. Level 3 inputs are unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. |
| Acquisitions | (l) Acquisitions The Company evaluates acquisitions of assets and other similar transactions to assess whether or not the transaction should be accounted for as a business combination or asset acquisition by first applying a screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets. If the screen is met, the transaction is accounted for as an asset acquisition. If the screen is not met, further determination is required as to whether or not the Company has acquired inputs and processes that have the ability to create outputs which would meet the definition of a business. Business combinations Business combinations are accounted for using the acquisition method of accounting. Under the acquisition method, assets acquired and liabilities assumed are recorded at their respective fair values as of the acquisition date in the financial statements. The excess of the fair value of consideration transferred over the fair value of the net assets acquired is recorded as goodwill. Liability-classified contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and remeasured at their fair values each subsequent reporting period until the related contingencies are resolved. The resulting changes in fair values are recorded in earnings. Equity-classified contingent consideration obligations incurred in connection with a business combination are recorded at their fair values on the acquisition date and are not subsequently remeasured each reporting period unless the obligation becomes reclassified as a liability. The subsequent settlement of the obligation is accounted for within equity. Asset acquisitions In an asset acquisition, the fair value of the consideration transferred, including transaction costs, is allocated to the assets acquired and liabilities assumed based on their relative fair values. No goodwill is recognized in an asset acquisition. Subsequent changes are recorded as adjustments to the carrying amount of the assets acquired. |
| Segment Reporting | (m) Segment Reporting Reportable segments represent components for which separate financial information is available that is utilized on a regular basis by the Chief Executive Officer, who has been identified as the Chief Operating Decision Maker, or CODM, as defined by authoritative guidance on segment reporting, in determining how to allocate resources and evaluate performance. The segments are determined based on several factors, including client base, homogeneity of products, technology, delivery channels and similar economic characteristics. Following the sale of the miraDry business on June 10, 2021, the Company has one reportable segment named Plastic Surgery, formally known as Breast Products. |
| Revenue Recognition | (n) Revenue Recognition The Company generates revenue primarily through the sale and delivery of promised goods or services to customers. Sales prices are documented in the executed sales contract, purchase order or order acknowledgement prior to the transfer of control to the customer. Typical payment terms are 30 days. Revenue contracts may include multiple products or services, each of which is considered a separate performance obligation. Performance obligations typically include the delivery of promised products, such as breast implants, tissue expanders, and BIOCORNEUM, along with service-type warranties. Other deliverables are sometimes promised but are ancillary and insignificant in the context of the contract as a whole. Revenue is allocated to each performance obligation based on its relative standalone selling price. The Company determines standalone selling prices based on observable prices for all performance obligations with the exception of the service-type warranty under the Platinum20 Limited Warranty Program, or Platinum20. The Company introduced Platinum20 in May 2018 on all OPUS breast implants implanted in the United States or Puerto Rico on or after May 1, 2018. Additionally, Platinum20 Program applies to all Sientra Silicone Gel Breast Implants that are implanted in Canada on or after March 23, 2022. Platinum20 provides for financial assistance for revision surgeries and no-charge contralateral replacement implants upon the occurrence of certain qualifying events. The Company considers Platinum20 to have an assurance warranty component and a service warranty component. The assurance component is recorded as a warranty liability at the time of sale (as discussed in Note 1(s)). The Company considers the service warranty component as an additional performance obligation and defers revenue at the time of sale using the expected cost plus margin approach for the performance obligation. Inputs into the expected cost plus margin approach include historical incidence rates, estimated replacement costs, estimated financial assistance payouts and an estimated margin. The liability for unsatisfied performance obligations under the service warranty as of December 31, 2022 were as follows (in thousands):
Year Ended December 31,
2022
Balance as of December 31, 2021 $ 3,237
Additions and adjustments 1,080
Revenue recognized ( 809 )
Balance as of December 31, 2022 $ 3,508
Less short-term portion ( 862 )
Long-term portion $ 2,646 Revenue for service warranties are recognized ratably over the term of the agreements. Specifically for Platinum20, the performance obligation is satisfied at the time that the benefits are provided and are expected to be satisfied over the following 3 to 24 month period for financial assistance and 20 years for product replacement. For delivery of promised products, control transfers and revenue is recognized upon shipment, unless the contractual arrangement requires transfer of control when products reach their destination, for which revenue is recognized once the product arrives at its destination. A portion of the Company’s revenue is generated from the sale of consigned inventory of breast implants and tissue expanders maintained at doctor, hospital, and clinic locations. For these products, revenue is recognized at the time the Company is notified by the customer that the product has been implanted, not when the consigned products are delivered to the customer’s location. Sales Return Liability With the exception of the Company’s BIOCORNEUM scar management products, inventory held on consignment, and products sold to international customers, the Company allows for the return of products from customers within six months after the original sale, which is accounted for as variable consideration. A sales return liability is established based on estimated returns using relevant historical experience taking into consideration recent gross sales and notifications of pending returns, as adjusted for changes in recent industry events and trends. The estimated sales returns are recorded as a reduction of revenue and as a sales return liability in the same period revenue is recognized. Actual sales returns in any future period are inherently uncertain and thus may differ from the estimates. If actual sales returns differ significantly from the estimates, an adjustment to revenue in the current or subsequent period would be recorded. The following table provides a rollforward of the sales return liability (in thousands):
Year Ended December 31,
2022 2021
Beginning balance $ 13,399 $ 9,192
Addition to reserve for sales activity 182,223 158,245
Actual returns ( 177,933 ) ( 152,773 )
Change in estimate of sales returns ( 1,916 ) ( 1,265 )
Ending balance $ 15,773 $ 13,399 Practical Expedients and Policy Election The Company generally expenses sales commissions when incurred because the amortization period would have been one year or less. These costs are recorded within sales and marketing expenses. The Company does not adjust accounts receivable for the effects of any significant financing components as customer payment terms are shorter than one year. The Company has elected to account for shipping and handling activities performed after a customer obtains control of the products as activities to fulfill the promise to transfer the products to the customer. Shipping and handling activities are largely provided to customers free of charge. The associated costs were $ 5.3 million, $ 5.5 million and $ 2.9 million for the years ended December 31, 2022, 2021, and 2020 , respectively. These costs are viewed as part of the Company’s marketing programs and are recorded as a component of sales and marketing expense in the consolidated statement of operations as an accounting policy election. |
| Accounts Receivable and Allowance for Doubtful Accounts | (o) Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount and do not bear interest. The Company maintains allowances for doubtful accounts for estimated losses resulting from the inability to collect from some of its customers. The allowances for doubtful accounts are based on the analysis of historical bad debts, customer credit‑worthiness, past transaction history with the customer, and current economic trends. If the financial condition of the Company’s customers were to deteriorate, adversely affecting their ability to make payments, additional allowances may be required. |
| Inventories and Cost of Goods Sold | (p) Inventories and Cost of Goods Sold Inventories represent raw materials, work in process and finished goods that are recorded at the lower of cost or market on a first‑in, first‑out basis, or FIFO. The Company recognizes the cost of inventory transferred to the customer in cost of goods sold when revenue is recognized. Further, the Company periodically assesses the recoverability of all inventories to determine whether adjustments for impairment or obsolescence are required. The Company evaluates the remaining shelf life and other general obsolescence and impairment criteria in assessing the recoverability of the Company’s inventory. |
| Income Taxes | (q) Income Taxes The Company accounts for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to affect taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts expected to be realized. The Company operates in several tax jurisdictions and is subject to taxes in each jurisdiction in which it conducts business. To date, the Company has incurred cumulative net losses and maintains a full valuation allowance on its net deferred tax assets due to the uncertainty surrounding realization of such assets. However, the Company has deferred tax liabilities that cannot be considered sources of income to support the realization of the deferred tax assets, and has provided for tax expense (or benefit) and a corresponding deferred tax liability. The Company accounts for uncertain tax positions in accordance with Account Standards Codification, or ASC, 740‑10, Accounting for Uncertainty in Income Taxes . The Company assesses all material positions taken in any income tax return, including all significant uncertain positions, in all tax years that are still subject to assessment or challenge by relevant taxing authorities. Assessing an uncertain tax position begins with the initial determination of the position’s sustainability and is measured at the largest amount of benefit that is greater than fifty percent likely of being realized upon ultimate settlement. As of each balance sheet date, unresolved uncertain tax positions must be reassessed, and the Company will determine whether (i) the factors underlying the sustainability assertion have changed and (ii) the amount of the recognized tax benefit is still appropriate. The recognition and measurement of tax benefits requires significant judgment. Judgments concerning the recognition and measurement of tax benefit might change as new information becomes available. |
| Research and Development Expenditures | (r) Research and Development Expenditures Research and development costs are charged to operating expenses as incurred. Research and development, or R&D, primarily consist of clinical expenses, regulatory expenses, product development, consulting services, outside research activities, quality control and other costs associated with the development of the Company’s products and compliance with Good Clinical Practices, or GCP, requirements. R&D expenses also include related personnel and consultant compensation expense, amortization of licensed manufacturing know-how, and stock-based compensation expense. |
| Stock-Based Compensation | (s) Stock‑Based Compensation The Company applies the fair value provisions of ASC 718, Compensation — Stock Compensation , or ASC 718. ASC 718 requires the recognition of compensation expense, using a fair‑value based method, for costs related to all employee share‑based payments, including stock options, restricted stock units, and the employee stock purchase plan. In the absence of an observable market price for an award, ASC 718 requires companies to estimate the fair value of share‑based payment awards on the date of grant using an option‑pricing model. The fair value of restricted stock unit awards at the date of grant is equal to the market price of our common stock on the grant date. We estimate the fair value of our stock options to employees and directors using the Black‑Scholes option pricing model. The grant date fair value of a stock‑based award is recognized as an expense over the requisite service period of the award on a straight‑line basis. In addition, we use the Monte-Carlo simulation option-pricing model to determine the fair value of market-based awards, if any. The Monte-Carlo simulation option-pricing model uses the same input assumptions as the Black-Scholes model; however, it also further incorporates into the fair-value determination the possibility that the market condition may not be satisfied. Compensation costs related to these awards are recognized regardless of whether the market condition is satisfied, provided that the requisite service has been provided. The option-pricing models require the input of subjective assumptions, including the risk‑free interest rate, expected dividend yield, expected volatility and expected term, among other inputs. These estimates involve inherent uncertainties and the application of management’s judgment. If factors change and different assumptions are used, our stock‑based compensation expense could be materially different in the future. These assumptions are estimated as follows: • Risk‑free interest rate —The risk‑free interest rate is based on the yields of U.S. Treasury securities with maturities similar to the expected term of the options for each option group. • Dividend yield —The Company has never declared or paid any cash dividends and do not presently plan to pay cash dividends in the foreseeable future. Consequently, the Company utilized an expected dividend yield of zero. • Expected volatility —The Company estimated its expected stock volatility based on company-specific historical and implied volatility information of its stock. • Expected term —The expected term represents the period that our stock‑based awards are expected to be outstanding. The Company utilizes the simplified method to estimate the expected term. |
| Product Warranties | (t) Product Warranties The Company offers a product replacement and limited warranty program for the Company’s silicone gel breast implants to the U.S and Canadian customers. For silicone gel breast implant surgeries occurring prior to May 1, 2018, the Company provides lifetime replacement implants and up to $ 3,600 in financial assistance for revision surgeries, for covered rupture events that occur within ten years of the surgery date. The Company introduced its Platinum20 Limited Warranty Program in May 2018, covering OPUS silicone gel breast implants implanted in the United States or Puerto Rico on or after May 1, 2018. The Company considers the program to have an assurance warranty component and a service warranty component. The service warranty component is discussed in Note 1(m) above. The assurance component is related to the lifetime no-charge contralateral replacement implants and up to $ 5,000 in financial assistance for revision surgeries, for covered rupture events that occur within twenty years of the surgery date. The warranty reserve represents our estimated future costs to replace ruptured implants during the warranty period for implants sold. Our estimated future costs to replace ruptured implants includes assumptions of the anticipated warranty costs per implant and the estimated rupture rate. The following table provides a rollforward of the warranty reserve (in thousands):
Year Ended December 31,
2022 2021
Balance as of January 1 $ 2,505 $ 1,934
Warranty costs incurred during the period ( 642 ) ( 399 )
Changes in accrual related to warranties issued during the period 2,157 933
Changes in accrual related to pre-existing warranties 4,808 37
Balance as of December 31 $ 8,828 $ 2,505
Less short term portion $ ( 642 ) -
Long-term portion $ 8,186 $ 2,505 As of December 31, 2022, and 2021, the liability for the long-term balance is included in “Warranty reserve”, and the short-term portion is included in “Accrued and other current liabilities”. |
| Net Loss Per Share | Net Loss Per Share
December 31,
2022 2021 2020
(Loss) from continuing operations $ ( 73,307 ) $ ( 62,519 ) $ ( 67,112 )
Income (loss) from discontinued operations, net of income taxes - 37 ( 22,835 )
Net (loss) $ ( 73,307 ) $ ( 62,482 ) $ ( 89,947 )
Expenses attributable to the convertible note
Losses attributable to common shares
Weighted average common shares outstanding, basic and diluted 7,175,687 5,705,711 5,023,318
Basic and diluted net loss per share
Continuing operations $ ( 10.22 ) $ ( 10.96 ) $ ( 13.36 )
Discontinued operations - 0.01 ( 4.55 )
Basic and diluted net loss per share $ ( 10.22 ) $ ( 10.95 ) $ ( 17.91 ) The Company excluded the following potentially dilutive securities, outstanding as of December 31, 2022, 2021 and 2020 from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2022, 2021 and 2020 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.
December 31,
2022 2021 2020
Stock issuable upon conversion of warrants 3,999,999 — —
Stock issuable upon conversion of convertible note 4,118,182 1,463,415 1,199,187
Stock options to purchase common stock 88,104 161,689 100,860
Unvested RSUs 392,436 178,960 113,545
8,598,721 1,804,064 1,413,592 The Company uses the if-converted method for calculating any potential dilutive effects of the convertible note. The Company did not adjust the net loss for the year ended December 31, 2022 to eliminate any interest expense or gain/loss for the derivative liability related to the note in the computation of diluted loss per share, as the effects would be anti-dilutive. |
| Recent Accounting Pronouncements | (u) Recent Accounting Pronouncements Recently Adopted Accounting Standards In August 2020, the FASB issued ASU 2020-06, Debt—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. The amendment eliminates certain accounting models and simplifies the accounting for convertible instruments and enhances disclosures for convertible instruments and earnings per share. The amendments are effective for public entities excluding smaller reporting companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2023 including interim periods within those fiscal years and early adoption is permitted. The Company adopted this guidance effective January 1, 2023 under the modified retrospective adoption approach and there was no material impact on its consolidated financial statements from the adoption. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes . The amendment removes certain exceptions for recognizing deferred taxes for investments, performing intraperiod allocation, and calculating income taxes in interim periods. The amendment also adds guidance to reduce complexity in certain areas, including recognizing deferred taxes for tax goodwill and allocating taxes to members of a consolidated group. The ASU is effective for annual and interim periods in fiscal years beginning after December 15, 2020. Early adoption was permitted. The Company adopted the applicable amendments within ASU 2019-12 in the first quarter of 2021 and there was no material impact on its consolidated financial statements from the adoption. Recently Issued Accounting Standards In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848)-Facilitation of the Effects of Reference Rate Reform on Financial Reporting . The amendment provides optional expedients and exceptions for contract modifications that replace a reference rate affected by reference rate reform. The amendments are effective for all entities as of March 12, 2020 through December 31, 2022, and entities may elect to apply the ASU as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020, up to the date that the financial statements are available to be issued. The Company is currently evaluating the impact the election of the optional expedient will have on the consolidated financial statements. |
| Risks and Uncertainties | (v) Risks and Uncertainties The COVID-19 pandemic and its related macroeconomic effects significantly impacted our business and results of operations in fiscal years 2020, 2021 and 2022. At the height of the pandemic and as an aesthetics company, the surgical procedures involving our breast products were susceptible to local and national government restrictions, such as social distancing, vaccination requirements, “shelter in place” orders and business closures, due to the economic and logistical impacts these measures have on consumer demand as well as the practitioners’ ability to administer such procedures. Hospitals across the U.S. have experienced periodic shortages of staff and postponement of certain non-emergency procedures due to the impact of COVID-19. The inability or limited ability to perform such non-emergency procedures significantly harmed our revenues since the second quarter of 2020 and continued to harm our revenues during the year ended December 31, 2022. During the first quarter of 2022, the Omicron variant had a pronounced impact on hospital capacity, resources, and procedure volumes, especially in the United States. While many states have lifted certain restrictions on non-emergency procedures, the pandemic continues to evolve and its impact on our business will depend on the spread of any variants, vaccination rates, and our ability to perform non-emergency procedures involving the Company’s products. We continue to monitor and assess new information related to the COVID-19 pandemic, the actions taken to contain or treat COVID-19, as well as the economic impact on local, regional, national and international customers and markets. In addition to the impacts described above, the global economy, including the financial and credit markets, has recently experienced extreme volatility and disruptions, including increases to inflation rates, rising interest rates, declines in consumer confidence, declines in economic growth, and uncertainty about economic stability. The severity and duration of the impact of these conditions on our business cannot be predicted. The estimates used for, but not limited to, determining the collectability of accounts receivable, fair value of long-lived assets and goodwill, and sales returns liability required could be impacted by the pandemic. While the full impact and duration of COVID-19 is unknown at this time, we have made appropriate estimates based on the facts and circumstances available as of the reporting date. These estimates may change as new events occur and additional information is obtained |
| Reclassifications | (w) Reclassifications Certain reclassifications have been made to prior year amounts to conform to the current year presentation, including those related to the reverse stock split, right of use assets, and lease liabilities. |
