Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 13, 2015 | Jun. 30, 2014 | |
Document and Entity Information | |||
Entity Registrant Name | Sientra, Inc. | ||
Entity Central Index Key | 1551693 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | FALSE | ||
Current Fiscal Year End Date | -19 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Public Float | $0 | ||
Entity Common Stock, Shares Outstanding | 14,924,949 | ||
Document Fiscal Year Focus | 2014 | ||
Document Fiscal Period Focus | FY |
Balance_Sheets
Balance Sheets (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $96,729 | $9,722 |
Accounts receivable, net of allowances of $10,330 and $8,543 at December 31, 2014 and 2013, respectively | 5,198 | 6,111 |
Inventories, net | 20,174 | 21,533 |
Prepaid expenses and other current assets | 1,782 | 884 |
Total current assets | 123,883 | 38,250 |
Property and equipment, net | 555 | 254 |
Goodwill | 14,278 | 14,278 |
Other intangible assets, net | 114 | 207 |
Other assets | 248 | 177 |
Total assets | 139,078 | 53,166 |
Current liabilities: | ||
Current portion of long-term debt | 3,757 | |
Accounts payable | 2,589 | 4,768 |
Accrued and other current liabilities | 5,772 | 4,065 |
Customer deposits | 8,614 | 4,908 |
Total current liabilities | 20,732 | 13,741 |
Long-term debt | 21,671 | 15,092 |
Warranty reserve and other long-term liabilities | 1,036 | 550 |
Total liabilities | 43,439 | 29,383 |
Commitments and contingencies (Note 9) | ||
Convertible preferred stock, $0.01 par value - Authorized, issued and outstanding 24,593,087 shares at December 31 2013 (Liquidation preference of $151,000 as of December 31, 2013) | 150,456 | |
Stockholders' equity (deficit): | ||
Preferred Stock, $0.01 par value - Authorized 10,000,000 shares; none issued or outstanding | ||
Common stock, $0.01 par value - Authorized 200,000,000 and 30,200,000 shares; issued 14,985,704 and 279,879 and outstanding 14,912,977 and 207,152 shares at December31 2014 and 2013, respectively | 150 | 3 |
Additional paid-in capital | 229,795 | 1,819 |
Treasury stock, at cost (72,727 shares at December 31, 2014 and 2013) | -260 | -260 |
Accumulated deficit | -134,046 | -128,235 |
Total stockholders' equity (deficit) | 95,639 | -126,673 |
Total liabilities, convertible preferred stock and stockholders' equity (deficit) | $139,078 | $53,166 |
Balance_Sheets_Parenthetical
Balance Sheets (Parenthetical) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Balance Sheets | ||
Accounts receivable, allowances (in dollars) | $10,330 | $8,543 |
Convertible preferred stock, par value (in dollars per share) | $0.01 | |
Convertible preferred stock, shares authorized | 24,593,087 | |
Convertible preferred stock, shares issued | 24,593,087 | |
Convertible preferred stock, shares outstanding | 24,593,087 | |
Liquidation preference (in dollars) | $151,000 | |
Preferred stock, par value (in dollars per share) | $0.01 | |
Preferred stock, shares authorized | 10,000,000 | |
Preferred stock, shares issued | 0 | |
Preferred stock, shares outstanding | 0 | |
Common stock, par value (in dollars per share) | $0.01 | $0.01 |
Common stock, shares authorized | 200,000,000 | 30,200,000 |
Common stock, shares issued | 14,985,704 | 279,879 |
Common stock, shares outstanding | 14,912,977 | 207,152 |
Treasury stock, shares | 72,727 | 72,727 |
Statements_of_Operations
Statements of Operations (USD $) | 12 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Statements of Operations | |||
Net sales | $44,733 | $35,171 | $10,447 |
Cost of goods sold | 11,500 | 8,592 | 2,352 |
Gross profit | 33,233 | 26,579 | 8,095 |
Operating expenses: | |||
Sales and marketing | 23,599 | 22,229 | 17,919 |
Research and development | 4,707 | 4,479 | 3,670 |
General and administrative | 10,712 | 18,078 | 9,938 |
Total operating expenses | 39,018 | 44,786 | 31,527 |
Loss from operations | -5,785 | -18,207 | -23,432 |
Other (expense) income, net: | |||
Interest expense | -2,172 | -872 | |
Other (expense) income, net: | 2,146 | -46 | -1 |
Total other (expense) income, net | -26 | -918 | -1 |
Loss before income taxes | -5,811 | -19,125 | -23,433 |
Net loss | ($5,811) | ($19,125) | ($23,433) |
Basic and diluted net loss per share attributable to common stockholders (in dollars per share) | ($2.28) | ($82.25) | ($85.01) |
Weighted average outstanding common shares used for net loss per share attributable to common stockholders: | |||
Basic and diluted (in shares) | 2,545,371 | 232,512 | 275,642 |
Statements_of_Convertible_Pref
Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (USD $) | Convertible preferred stock | Common stock | Treasury stock | Additional paid-in capital | Accumulated deficit | Total |
In Thousands, except Share data | ||||||
Balance, beginning of year at Dec. 31, 2011 | $85,903 | $3 | $1,107 | ($85,677) | ($84,567) | |
Balance, beginning of year (in shares) at Dec. 31, 2011 | 12,409,397 | 275,036 | ||||
Issuance of Series C convertible preferred stock at $5.335 per share, net of issuance costs of $447 | 64,553 | |||||
Issuance of Series C convertible preferred stock (in shares) | 12,183,690 | |||||
Stock option exercises | 3 | 3 | ||||
Stock option exercises (in shares) | 1,818 | |||||
Employee stock-based compensation expense | 357 | 357 | ||||
Net loss | -23,433 | -23,433 | ||||
Balance, end of year at Dec. 31, 2012 | 150,456 | 3 | 1,467 | -109,110 | -107,640 | |
Balance, end of year (in shares) at Dec. 31, 2012 | 24,593,087 | 276,854 | ||||
Stock option exercises | 10 | 10 | ||||
Stock option exercises (in shares) | 3,025 | |||||
Repurchased common shares | -260 | -260 | ||||
Repurchased common shares (in shares) | 72,727 | |||||
Employee stock-based compensation expense | 342 | 342 | ||||
Net loss | -19,125 | -19,125 | ||||
Balance, end of year at Dec. 31, 2013 | 150,456 | 3 | -260 | 1,819 | -128,235 | -126,673 |
Balance, end of year (in shares) at Dec. 31, 2013 | 24,593,087 | 279,879 | 72,727 | |||
Conversion of convertible preferred stock to common stock | -150,456 | 89 | 150,367 | 150,456 | ||
Conversion of convertible preferred stock to common stock (in shares) | -24,593,087 | 8,942,925 | ||||
Proceeds from IPO, net of costs | 58 | 76,977 | 77,035 | |||
Proceeds from IPO, net of costs (in shares) | 5,750,000 | |||||
Stock option exercises | 38 | 38 | ||||
Stock option exercises (in shares) | 12,900 | |||||
Employee stock-based compensation expense | 594 | 594 | ||||
Net loss | -5,811 | -5,811 | ||||
Balance, end of year at Dec. 31, 2014 | $150 | ($260) | $229,795 | ($134,046) | $95,639 | |
Balance, end of year (in shares) at Dec. 31, 2014 | 14,985,704 | 72,727 |
Statements_of_Convertible_Pref1
Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) (Parenthetical) (USD $) | 12 Months Ended |
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2012 |
Series C preferred stock | |
Value of issued stock (in dollars per share) | $5.34 |
Issuance costs | $447 |
Statements_of_Cash_Flows
Statements of Cash Flows (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Cash flows from operating activities: | |||
Net loss | ($5,811) | ($19,125) | ($23,433) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 275 | 280 | 288 |
Provision for sales return reserve | 1,748 | 3,936 | 4,240 |
Provision for doubtful accounts | 39 | 107 | 140 |
Provision for warranties | 447 | 392 | 123 |
Change in fair value of warrants | 220 | 46 | |
Non cash interest expense | 490 | 179 | |
Stock-based compensation expense | 594 | 342 | 357 |
Changes in assets and liabilities: | |||
Accounts receivable | -873 | -6,804 | -7,636 |
Prepaid expenses, other current assets and other assets | -864 | 195 | -575 |
Inventories | 1,359 | -10,852 | -7,520 |
Accounts payable | -2,266 | 1,904 | 390 |
Accrued and other liabilities | 1,385 | -70 | 2,931 |
Customer deposits | 3,707 | 3,593 | 849 |
Net cash provided by (used in) operating activities | 450 | -25,877 | -29,846 |
Cash flows from investing activities: | |||
Purchase of property and equipment | -439 | -71 | -394 |
Contingent payment related to Silimed acquisition | -18,000 | ||
Net cash used in investing activities | -439 | -18,071 | -394 |
Cash flows from financing activities: | |||
Proceeds from exercise of stock options | 38 | 10 | 3 |
Repurchase of common stock | -260 | ||
Proceeds from issuance of preferred stock, net | 64,553 | ||
Proceeds from issuance of common stock, net of underwriters discount | 80,213 | ||
Proceeds from issuance of long-term debt | 10,000 | 15,000 | |
Deferred financing costs | -148 | -288 | |
Deferred equity issuance costs | -3,107 | ||
Net cash provided by financing activities | 86,996 | 14,462 | 64,556 |
Net increase (decrease) in cash and cash equivalents | 87,007 | -29,486 | 34,316 |
Cash and cash equivalents at: | |||
Beginning of period | 9,722 | 39,208 | 4,892 |
End of period | 96,729 | 9,722 | 39,208 |
Cash paid during the year for: | |||
Interest paid | 1,577 | 641 | |
Supplemental disclosure of noncash investing and financing activities: | |||
Accrual for the resolution of contingent payment related to Silimed acquisition | 18,000 | ||
Accrued equity issuance costs | 71 | ||
Property and equipment in accounts payable | $44 |
Formation_and_Business_of_the_
Formation and Business of the Company | 12 Months Ended |
Dec. 31, 2014 | |
Formation and Business of the Company | |
Formation and Business of the Company | |
1) Formation and Business of the Company | |
(a) Formation | |
Sientra, Inc., or the Company, was incorporated in the State of Delaware on August 29, 2003 under the name Juliet Medical, Inc. and subsequently changed its name to Sientra, Inc. in April 2007. The Company acquired substantially all the assets of Silimed, Inc., or Silimed, on April 4, 2007. The purpose of the acquisition was to acquire the rights to the silicone breast implant clinical trials. Following this acquisition, the Company focused on completing the clinical trials to gain Food and Drug Administration, or FDA, approval to offer its silicone gel breast implants in the United States. | |
In March 2012, Sientra announced it had received approval from the FDA for its portfolio of silicone gel breast implants, and in the second quarter of 2012 the Company began commercialization efforts to sell its products in the United States. The Company, based in Santa Barbara, California, is a medical aesthetics company that focuses on serving board-certified plastic surgeons and offers a portfolio of silicone shaped and round breast implants, tissue expanders, and body contouring products. | |
(b) Reverse Stock Split | |
On October 10, 2014, the board of directors and stockholders approved an amendment to the Company's fourth amended and restated certificate of incorporation, which was filed on October 17, 2014, which effected a 1 for 2.75 reverse stock split of the Company's issued and outstanding shares of common stock. The par value of the common stock was not adjusted as a result of the reverse stock split. All issued and outstanding shares of common stock, stock options and warrants and the related per share amounts contained in the Company's financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Also, as a result of the reverse stock split of the common stock, the conversion ratios for all of the Company's convertible preferred stock have been adjusted such that the preferred stock are now convertible into shares of common stock at a conversion rate of 2.75-to-1 instead of 1-to-1. The number of issued and outstanding shares of preferred stock and their related per share amounts have not been affected by the reverse stock split and therefore have not been adjusted in the Company's financial statements. However, to the extent that the convertible preferred stock are presented on an as converted to common stock basis, such share and per share amounts contained in the Company's financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. | |
(c) Initial Public Offering | |
On November 3, 2014, the Company completed an initial public offering, or IPO, whereby it sold a total of 5,750,000 shares of common stock at $15.00 per share inclusive of 750,000 shares sold to underwriters for the exercise of their option to purchase additional shares. The Company received net proceeds from the IPO of approximately $77,035, after deducting underwriting discounts and commissions and offering expenses of approximately $9,215. These expenses will be recorded against the proceeds received from the IPO. | |
The interest-only period for the tranche D term loan (see Note 4) was extended from August 1, 2015 to August 1, 2016 as a result of having raised at least $50,000 in gross proceeds in the IPO and the completion of the IPO before June 30, 2015. | |
The outstanding shares of convertible preferred stock were converted on a 2.75-to-1 basis into shares of common stock concurrent with the closing of the IPO. All of the outstanding shares of Series A, Series B and Series C preferred stock converted into 8,942,925 shares of common stock. Following the closing of the IPO, there were no shares of preferred stock outstanding. | |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
(2) Summary of Significant Accounting Policies | ||||||||||||||
(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 (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 reserves, 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 stock-based compensation and other equity instruments. | ||||||||||||||
(b) Liquidity | ||||||||||||||
Since inception, the Company has incurred net losses. During the years ended December 31, 2014, 2013, and 2012 the Company incurred net losses of $5,811, $19,125, and $23,433, respectively. The Company provided $450 of cash in operations for the year ended December 31, 2014 and used $25,877 and $29,846 of cash in operations during the years ended December 31, 2013 and 2012, respectively. At December 31, 2014 and 2013 the Company had an accumulated deficit of $134,046 and $128,235, respectively. At December 31, 2014, the Company had cash and cash equivalents of $96,729. The Company's ability to continue to meet its obligations and to achieve its business objectives is dependent upon, amongst other things, generating sufficient revenues. The Company believes that it has the ability to continue as a going concern through at least December 31, 2015. | ||||||||||||||
(c) Cash and Cash Equivalents | ||||||||||||||
The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. Cash equivalents consist primarily of checking accounts. | ||||||||||||||
(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 a financial institution that management believes is creditworthy. The Company is exposed to credit risk in the event of default by this financial institution for cash and cash equivalents in excess of amounts insured by the Federal Deposit Insurance Corporation (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 currently purchases all of its Breast Products from one supplier under an exclusivity contract. The supplier and its production facility are located in Brazil. The Company is exposed to risks of foreign regulations in Brazil that could hinder the Company's ability to import goods, as well as halts or limitations in productions due to events outside of the Company's control occurring at the production facility. 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. Management believes that there is minimal risk of such events occurring. | ||||||||||||||
(e) Fair Value of Financial Instruments | ||||||||||||||
The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and customer deposits are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the common stock warrant liability is discussed in Note 2(f). The fair value of our long-term debt is based on the amount of future cash flows associated with the instrument discounted using our current market rate. At December 31, 2014, the carrying value of the long-term debt was not materially different from the fair value. | ||||||||||||||
(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. | |||||||||||||
The Company's common stock warrant liabilities are carried at fair value determined according to the fair value hierarchy described above. The Company has utilized an option pricing valuation model to determine the fair value of its outstanding common stock warrant liabilities. The inputs to the model include fair value of the common stock related to the warrant, exercise price of the warrant, expected term, expected volatility, risk-free interest rate and dividend yield. Prior to the IPO, the Company determined the fair value per share of the underlying common stock by taking into consideration its most recent sale of its convertible preferred stock as well as additional factors that the Company deems relevant. Subsequent to the IPO, the warrants are valued using the fair value of common stock as of the measurement date. The Company historically has been a private company and lacks company-specific historical and implied volatility information of its stock. Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company has estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends. As several significant inputs are not observable, the overall fair value measurement of the warrants is classified as Level 3. | ||||||||||||||
The following tables present information about the Company's liabilities that are measured at fair value on a recurring basis as of December 31, 2014 and 2013 and indicate the level of the fair value hierarchy utilized to determine such fair value: | ||||||||||||||
Fair Value Measurements as of | ||||||||||||||
December 31, 2014 Using: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Liability for common stock warrants | $ | — | — | 420 | 420 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements as of | ||||||||||||||
December 31, 2013 Using: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Liability for common stock warrants | $ | — | — | 90 | 90 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The following table provides a rollforward of the aggregate fair values of the Company's common stock warrants for which fair value is determined by Level 3 inputs: | ||||||||||||||
Fair value upon issuance during 2013 | $ | 44 | ||||||||||||
Increase in fair value through December 31, 2013 | 46 | |||||||||||||
| | | | | ||||||||||
Balance, January 1, 2014 | 90 | |||||||||||||
Fair value of warrants upon issuance during 2014 | 110 | |||||||||||||
Increase in fair value through December 31, 2014 | 220 | |||||||||||||
| | | | | ||||||||||
Balance, December 31, 2014 | $ | 420 | ||||||||||||
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The company recognized changes in the fair value of these warrants in other (expense) income, net in the statement of operations. | ||||||||||||||
(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 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 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. | ||||||||||||||
(h) Goodwill and Other Intangible Assets | ||||||||||||||
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. The Company's annual test for impairment is performed as of October 1 of each fiscal year. The Company makes a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it is not required to perform the two-step impairment test for that reporting unit. | ||||||||||||||
Under the first step of the test, the Company is required to compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and the second step of the test is not performed. If the results of the first step of the impairment test indicate that the fair value of a reporting unit does not exceed its carrying amount, then the second step of the test is required. The second step of the test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The impairment loss is measured by the excess of the carrying amount of the reporting unit goodwill over the implied fair value of that goodwill. | ||||||||||||||
Management evaluates the Company as a single reporting unit for business and operating purposes as all of the Company's revenue streams are generated by the same underlying products via sales in the United States of America. In addition, the majority of the Company's costs are, by their nature, shared costs that are not specifically identifiable to a geography or product line, but relate to all products. As a result, there is a high degree of interdependency among the Company's net sales and cash flows for the entity and identifiable cash flows for a reporting unit separate from the entity are not meaningful. | ||||||||||||||
Judgments about the recoverability of purchased finite-lived intangible assets are made whenever events or changes in circumstance indicate that impairment may exist. 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. Recoverability of finite-lived intangible assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. The intangible asset is amortized to the statement of operations based on estimated cash flows generated from the intangible over its estimated life. | ||||||||||||||
(i) Impairment of 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 assets 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 of long-lived assets recorded during the years ended December 31, 2014, 2013 and 2012. The Company may record impairment losses in future periods if factors influencing its estimates change. | ||||||||||||||
(j) Revenue Recognition | ||||||||||||||
The Company sells its product directly to customers in markets where it has regulatory approval. The Company offers a six-month return policy and recognizes revenue net of sales discounts and returns in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification 605, Revenue Recognition (ASC 605). ASC 605 requires that six basic criteria must be met before revenue can be recognized when a right of return exists: | ||||||||||||||
• | the seller's price to the buyer is substantially fixed or determinable at the date of sale; | |||||||||||||
• | the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product; | |||||||||||||
• | the buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product; | |||||||||||||
• | the buyer acquiring the product for resale has economic substance apart from that provided by the seller; | |||||||||||||
• | the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and | |||||||||||||
• | the amount of future returns can be reasonably estimated. | |||||||||||||
Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from customers within six months after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Sales return provisions are calculated based upon historical experience with actual returns. 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 Company has established an allowance for sales returns of $10,018 and $8,270 as of December 31, 2014 and 2013, respectively, recorded net against accounts receivable in the balance sheet. | ||||||||||||||
A portion of the Company's revenue is generated from consigned inventory of breast implants maintained at doctor, hospital, and clinic locations. The customer is contractually obligated to maintain a specific level of inventory and to notify the Company upon use. For these products, revenue is recognized at the time the Company is notified by the customer that the product has been implanted. Notification is usually through the replenishing of the inventory and the Company periodically reviews consignment inventories to confirm accuracy of customer reporting. FDA regulations require tracking the sales of all implanted products. | ||||||||||||||
Shipping and handling charges are largely provided to customers free of charge. The associated costs are viewed as part of the Company's marketing programs and are recorded as a component of sales and marketing expense in the statement of operations. For the years ended December 31, 2014, 2013 and 2012 these costs amounted to $1,305, $1,021 and $354, respectively. | ||||||||||||||
In other cases, shipping and handling charges may be invoiced to customers based on the amount of products sold. In such cases, shipping and handling fees collected are recorded as revenue and the related expense as a component of cost of goods sold. | ||||||||||||||
(k) 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. The Company has established an allowance for doubtful accounts of $312 and $273 as of December 31, 2014 and 2013, respectively. | ||||||||||||||
(l) Inventories and Cost of Goods Sold | ||||||||||||||
Inventories represent finished goods that are recorded at the lower of cost or market on a first-in, first-out basis (FIFO). 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. | ||||||||||||||
The Company recognizes the cost of inventory transferred to the customer in cost of goods sold when revenue is recognized. | ||||||||||||||
At December 31, 2014 and 2013, approximately $1,989 and $528, respectively, of the Company's inventory was held on consignment at doctors' offices, clinics, and hospitals. The value and quantity at any one location is not significant. | ||||||||||||||
(m) 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 accounts for uncertain tax position in accordance with 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. | ||||||||||||||
(n) 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 and stock-based compensation expense. | ||||||||||||||
(o) Advertising | ||||||||||||||
Expenses related to advertising are charged to sales and marketing expense as incurred. Advertising costs were $1,548, $801 and $510 for fiscal years 2014, 2013 and 2012, respectively. | ||||||||||||||
(p) Stock-Based Compensation | ||||||||||||||
The Company applies the fair value provisions of ASC 718, Compensation—Stock Compensation (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 and the employee stock purchase plan. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. All option grants valued are being expensed on a straight-line basis over their vesting period. | ||||||||||||||
(q) Product Warranties | ||||||||||||||
The Company offers a limited warranty and a lifetime product replacement program for the Company's silicone gel breast implants. Under the limited warranty program, the Company will reimburse patients for certain out-of-pocket costs related to revision surgeries performed within ten years from the date of implantation in a covered event. Under the lifetime product replacement program, the Company provides no-charge replacement breast implants under a covered event. The programs are available to all patients implanted with the Company's silicone breast implants after April 1, 2012 and are subject to the terms, conditions, claim procedures, limitations and exclusions. Timely completion of a device tracking and warranty enrollment form by the patient's Plastic Surgeon is required to activate the programs and for the patient to be able to receive benefits under either program. | ||||||||||||||
The following table provides a rollforward of the accrued warranties: | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Beginning balance | $ | 515 | $ | 123 | ||||||||||
Payment made during the period | (1 | ) | — | |||||||||||
Changes in accrual related to warranties issued during the period | 509 | 392 | ||||||||||||
Changes in accrual related to pre-existing warranties | (62 | ) | — | |||||||||||
| | | | | | | | |||||||
Ending balance | $ | 961 | $ | 515 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
(r) Deferred Equity Issuance Costs | ||||||||||||||
Deferred equity issuance costs, primarily consisting of legal, accounting and other direct fees and costs relating to the IPO, were capitalized, as incurred, in other current assets prior to the completion of the IPO. Upon completion of the IPO, $3,178 of issuance costs were capitalized, all of which were reclassified to additional-paid-in capital to offset the IPO proceeds. | ||||||||||||||
(s) Segment Information | ||||||||||||||
Management has determined that it has one business activity and operates in one segment as it only reports financial information on an aggregate basis to its Chief Executive Officer, who is the Company's chief operating decision maker. All tangible assets are held in the United States. | ||||||||||||||
(t) Net Loss Per Share | ||||||||||||||
Basic loss per share attributable to common stockholders is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding, to the extent they are dilutive. Potential common shares consist of shares issuable upon the exercise of stock options and warrants (using the treasury stock method), and the weighted average conversion of the convertible preferred stock into shares of common stock (using the if-converted method). Dilutive loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive. | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Net loss | $ | (5,811 | ) | $ | (19,125 | ) | $ | (23,433 | ) | |||||
Weighted average common shares outstanding, basic and diluted | 2,545,371 | 232,512 | 275,642 | |||||||||||
| | | | | | | | | | | ||||
Net loss per share attributable to common stockholders | $ | (2.28 | ) | $ | (82.25 | ) | $ | (85.01 | ) | |||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
The Company excluded the following potentially dilutive securities, outstanding as of December 31, 2014, 2013 and 2012 from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2014, 2013 and 2012 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods. | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Stock options to purchase common stock | 1,613,544 | 1,422,315 | 1,409,047 | |||||||||||
Warrants for the purchase of common stock | 47,710 | 30,670 | — | |||||||||||
Convertible preferred stock (as converted to common stock) | — | 8,942,925 | 8,942,925 | |||||||||||
| | | | | | | | | | | ||||
1,661,254 | 10,395,910 | 10,351,972 | ||||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
(u) Recent Accounting Pronouncements | ||||||||||||||
In May 2014, the FASB issued accounting standard update 2014-09, Revenue from Contracts with Customers. The standard was issued to provide a single framework that replaces existing industry and transaction specific GAAP with a five step analysis of transactions to determine when and how revenue is recognized. This accounting standard update is expected to be effective for the Company beginning in fiscal year 2018. The Company is currently assessing the impact that the standard will have on the financial statements upon adoption of the guidance. | ||||||||||||||
In August 2014, the FASB issued accounting standard update 2014-15, Presentation of Financial Statement—Going Concern. The standard was issued to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. This accounting standard updated will be effective for the Company beginning in fiscal year 2016. The Company anticipates there will be no impact on its financial statement upon adoption of this guidance. | ||||||||||||||
Balance_Sheet_Components
Balance Sheet Components | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Components | ||||||||
Balance Sheet Components | ||||||||
(3) Balance Sheet Components | ||||||||
Property and equipment, net consist of the following: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Leasehold improvements | $ | 69 | $ | 19 | ||||
Computer equipment | 138 | 183 | ||||||
Software | 166 | 85 | ||||||
Office equipment | 167 | 128 | ||||||
Furniture and fixtures | 636 | 456 | ||||||
| | | | | | | | |
1,176 | 871 | |||||||
Less accumulated depreciation | (621 | ) | (617 | ) | ||||
| | | | | | | | |
$ | 555 | $ | 254 | |||||
| | | | | | | | |
| | | | | | | | |
Depreciation expense for the years ended December 31, 2014, 2013 and 2012 was $182, $148 and $109 respectively. | ||||||||
Accrued and other current liabilities consist of the following: | ||||||||
December 31 | ||||||||
2014 | 2013 | |||||||
Accrued clinical trial and research and development expenses | $ | 109 | $ | 166 | ||||
Audit, consulting and legal fees | 72 | 124 | ||||||
Payroll and related expenses | 2,497 | 1,890 | ||||||
Accrued commission | 1,969 | 1,563 | ||||||
Warrant liability | 420 | 90 | ||||||
Other | 705 | 232 | ||||||
| | | | | | | | |
$ | 5,772 | $ | 4,065 | |||||
| | | | | | | | |
| | | | | | | | |
Longterm_Debt
Long-term Debt | 12 Months Ended |
Dec. 31, 2014 | |
Long-term Debt | |
Long-term Debt | |
(4) Long-term Debt | |
On January 17, 2013, the Company entered into a Loan and Security Agreement, or the Original Term Loan Agreement, with Oxford providing for a $15,000 term loan facility consisting of original term loans of (i) a $7,500 tranche A term loan, (ii) a $2,500 tranche B term loan and (iii) a $5,000 tranche C term loan, maturing on February 1, 2017. The term loan facility is collateralized by a first-priority security interest in substantially all of the Company's assets. Borrowings under the term loan facility bear interest at a rate equal to 8.4% per annum and the Original Term Loan Agreement provides for interest-only payments through June 30, 2015. The term loans include an additional lump sum payment of $975 due on February 1, 2017. | |
On June 30, 2014, the Company entered into the Amended and Restated Loan and Security Agreement, or the Amended Term Loan Agreement, with Oxford, under which the interest-only period for the original term loans was extended to August 1, 2015 and raised an additional $10,000 in a fourth tranche (tranche D) maturing on January 1, 2019. The term loans are collateralized by a first-priority security interest in substantially all of the Company's assets. The term loans bear interest at a rate equal to 8.4% per annum. The interest-only period for the tranche A, B and C term loans ends on August 1, 2015 and the interest-only period for the tranche D term loan ends on the same date, but was extended another year to August 1, 2016 as the Company raised at least $50,000 in gross proceeds as part of the IPO (see Note 1). The tranche D term loan includes an additional lump sum payment of $650 due on January 1, 2019. | |
The Amended Term Loan Agreement contains various negative and affirmative covenants, including certain restrictive covenants that limit the Company's ability to transfer or dispose of certain assets, engage in new lines of business, change the composition of Company management, merge with or acquire other companies, incur additional debt, create new liens and encumbrances, pay dividends or subordinated debt and enter into material transactions with affiliates, among others. The Amended Term Loan Agreement also contains financial reporting requirements. | |
The aggregate maturities of long-term debt as of December 31, 2014 are: $3,757 in 2015, $11,094 in 2016, $5,558 in 2017, $4,223 in 2018 and $368 in 2019. | |
In connection with the Original Term Loan Agreement and the Amended Term Loan Agreement, the Company issued to Oxford (i) seven-year warrants in January 2013 to purchase shares of the Company's common stock with a value equal to 3.0% of the tranche A, B and C term loans amounts and (ii) seven-year warrants in June 2014 to purchase shares of the Company's common stock with a value equal to 2.5% of the tranche D term loan amount. The warrants have an exercise price per share equal to the lesser of (i) the Series C preferred stock conversion price of $14.671 per share or (ii) the price per share in a subsequent qualified round of financing where gross proceeds are greater than $10,000. | |
Acquisition_of_Silimed_Inc
Acquisition of Silimed, Inc. | 12 Months Ended |
Dec. 31, 2014 | |
Acquisition of Silimed, Inc. | |
Acquisition of Silimed, Inc. | |
(5) Acquisition of Silimed, Inc. | |
On April 4, 2007, the Company acquired substantially all of the assets of Silimed, a privately held Texas-based company engaged in the development and sale of medical devices including breast implants, under the terms of an Asset Purchase Agreement, or the APA. The consideration paid by the Company to Silimed was $29,850 in cash and 90,909 shares of the Company's common stock. The transaction also specified a series of contingent payments with a total potential value of $70,000. As the net assets acquired exceeded the purchase price, and since the contingencies were not resolved, the purchase price allocation included a deferred credit (negative goodwill) of $4,298. | |
On May 16, 2013, the Company, Grader Street (formerly, Silimed, Inc.) and Grader Street's founder reached a confidential agreement in which the Company agreed to pay Grader Street a gross amount of $18,000 and to release all claims that the Company had against Grader Street and its founder. In return, Grader Street and its founder also released all claims, including all future contingent payments, under the APA. In addition, under the terms of the agreement, the Company paid $260 to repurchase all 72,727 shares (of the original 90,909 shares issued) currently held by Grader Street's founder. | |
Accordingly, the excess fair value of the settlement payment and the release of $576 in other assets related to claims against Grader Street over the $4,298 deferred credit were recognized as additional cost of the asset acquisition as of December 31, 2013. | |
Goodwill_and_Other_Intangible_
Goodwill and Other Intangible Assets | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Goodwill and Other Intangible Assets | ||||||||
Goodwill and Other Intangible Assets | ||||||||
(6) Goodwill and Other Intangible Assets | ||||||||
(a) Goodwill | ||||||||
The carrying amount of goodwill was $14,278 for all periods presented. The Company has determined that it has one reporting unit and has chosen October 1 as the date for its annual impairment test. The Company performed the annual impairment test of goodwill for 2014 and 2013 and determined that goodwill was not impaired. | ||||||||
(b) Other Intangible Assets | ||||||||
The Company recorded approximately $1,713 of intangible assets in connection with the acquisition of Silimed. The components of the Company's intangible assets are as follows: | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Acquired FDA non-gel product approval | $ | 1,713 | $ | 1,713 | ||||
Less accumulated amortization | (1,599 | ) | (1,506 | ) | ||||
| | | | | | | | |
$ | 114 | $ | 207 | |||||
| | | | | | | | |
| | | | | | | | |
Amortization expense for intangible assets for the years ended December 31, 2014, 2013 and 2012 was $93, $132 and $179 respectively, and is recorded in general and administrative expense in the statement of operations. The remaining amortization period as of December 31, 2014 is 3 years. The following table summarizes the estimated amortization expense relating to the Company's intangible assets as of December 31, 2014: | ||||||||
2015 | $ | 61 | ||||||
2016 | 37 | |||||||
2017 | 16 | |||||||
| | | | | ||||
$ | 114 | |||||||
| | | | | ||||
Income_Taxes
Income Taxes | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Income Taxes | |||||||||||
(7) Income Taxes | |||||||||||
Actual income tax expense differs from that obtained by applying the statutory federal income tax rate of 34% to income before income taxes as follows: | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Tax at federal statutory rate | $ | (1,976 | ) | $ | (6,502 | ) | $ | (7,967 | ) | ||
State, net of federal benefit | (260 | ) | (576 | ) | (774 | ) | |||||
Permanent items | 580 | 339 | 255 | ||||||||
Research and development credits | (216 | ) | (232 | ) | (186 | ) | |||||
Benefit state rate change | (941 | ) | — | — | |||||||
Other | 495 | 15 | 98 | ||||||||
Change in valuation allowance | 2,318 | 6,956 | 8,574 | ||||||||
| | | | | | | | | | | |
$ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets are as follows: | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Net operating loss carryforwards | $ | 39,372 | $ | 37,278 | |||||||
Research and development credits | 2,230 | 2,014 | |||||||||
Depreciation | 36 | 31 | |||||||||
Accruals and reserves | 5,035 | 3,706 | |||||||||
Intangibles | 5,732 | 7,058 | |||||||||
| | | | | | | | ||||
52,405 | 50,087 | ||||||||||
Less valuation allowance | (52,405 | ) | (50,087 | ) | |||||||
| | | | | | | | ||||
Total deferred tax assets | $ | — | $ | — | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
The Company has established a full valuation allowance against its net deferred tax assets due to the uncertainty surrounding realization of such assets. | |||||||||||
As of December 31, 2014, the Company had net operating loss carryforwards of approximately $101,172 and $91,474 available to reduce future taxable income, if any, for federal and state income tax purposes, respectively. The federal net operating loss carryforward begins expiring in 2027, and the state net operating loss carryforwards begin expiring in 2017. It is possible that we will not generate taxable income in time to use these NOLs before their expiration. In addition, under Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, if a corporation undergoes an "ownership change" (generally defined as a greater than 50% change, be value, in its equity ownership over a three year period), the corporation's ability to use its pre-change NOL carryforwards and other pre-change tax attributes to offset its post-change income may be limited. We have not performed a detailed analysis to determine whether an ownership change under Section 382 of the Code has previously occurred. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards to offset U.S. federal taxable income may become subject to limitations, which could potentially result in increased future tax liability to us. Until such analysis is completed, we cannot be sure that the full amount of the existing federal NOLs will be available to us, even if we do generate taxable income before their expiration. | |||||||||||
As of December 31, 2014, the Company had research and development credit carryforwards of approximately $1,799 and $1,762 available to reduce future taxable income, if any, for federal and California state income tax purposes, respectively. The federal credit carryforwards begin expiring in 2027 and the state credits carryforward indefinitely. | |||||||||||
At December 31, 2014, the Company had unrecognized tax benefits of approximately $732 associated with the research and development credits. The Company does not anticipate that total unrecognized net tax benefits will significantly change over the next twelve months. | |||||||||||
A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows: | |||||||||||
Ending balance at December 31, 2012 | $ | 594 | |||||||||
Additions based on tax positions taken in the current year | 77 | ||||||||||
| | | | | |||||||
Ending balance at December 31, 2013 | 671 | ||||||||||
Additions based on tax positions taken in the current year | 61 | ||||||||||
| | | | | |||||||
Ending balance at December 31, 2014 | $ | 732 | |||||||||
| | | | | |||||||
| | | | | |||||||
It is the Company's policy to include penalties and interest expense related to income taxes as a component of other expense and interest expense, respectively, as necessary. There was no interest expense or penalties related to unrecognized tax benefits recorded through December 31, 2014. | |||||||||||
The Company files U.S. federal and state income tax returns in jurisdictions with varying statute of limitations. The years that may be subject to examination will vary by jurisdiction. The Company's tax years 2010 to 2014 will remain open for examination by the federal and state tax authorities. | |||||||||||
Stockholders_Equity_Deficit
Stockholders' Equity (Deficit) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||
(8) Stockholders' Equity (Deficit) | |||||||||||||||
(a) Authorized Stock | |||||||||||||||
The Company's Amended and Restated Certificate of Incorporation, effective upon the completion of the IPO, authorizes the Company to issue 210,000,000 shares of common and preferred stock, consisting of 200,000,000 shares of common stock with $0.01 par value and 10,000,000 shares of preferred stock with $0.01 par value. As of December 31, 2014, the Company has no preferred stock issued or outstanding. | |||||||||||||||
Prior to the IPO, the Company was authorized to issue 30,200,000 shares of common stock with $0.01 par value and 24,593,087 shares of preferred stock with $0.01 par value. | |||||||||||||||
(b) Convertible Preferred Stock | |||||||||||||||
Prior to completion of the IPO, under the Company's Certificate of Incorporation, as amended, the Company's convertible preferred stock was issued in three series: A, B and C. The outstanding shares of convertible preferred stock were converted on a 2.75-to-1 basis into shares of common stock concurrent with the closing of the IPO. All of the outstanding shares of Series A, Series B and Series C preferred stock converted into 8,942,925 shares of common stock. | |||||||||||||||
At December 31, 2013, the Company's convertible preferred stock consists of the following: | |||||||||||||||
Series | Shares | Outstanding | Proceeds | Liquidation | Issuance | ||||||||||
authorized | net of | value | date | ||||||||||||
issuance | |||||||||||||||
costs | |||||||||||||||
A | 1,000,000 | 1,000,000 | $ | 994 | 1,000 | Oct-06 | |||||||||
B | 11,409,397 | 11,409,397 | 84,909 | 85,000 | April 2007 and October 2008 | ||||||||||
C | 12,183,690 | 12,183,690 | 64,553 | 65,000 | Mar-12 | ||||||||||
| | | | | | | | | | | | | | | |
24,593,087 | 24,593,087 | $ | 150,456 | 151,000 | |||||||||||
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
As of December 31, 2013, the holders of convertible preferred stock have various rights and preferences as follows: | |||||||||||||||
(c) Voting Rights | |||||||||||||||
The holder of each share of Series A, Series B and Series C convertible preferred stock are entitled to the number of votes equal to the number of shares of the common stock into which each share of the preferred stock could be converted on the record date. The holders of shares of preferred stock have voting rights and powers equal to the voting rights and powers of holders of common stock. | |||||||||||||||
(d) Dividends | |||||||||||||||
The holders of convertible preferred stock are entitled to receive noncumulative dividends, when and if declared by the Board of Directors, out of any assets legally available, prior to and in preference to any declaration or payment of dividends on the common stock of the Company. | |||||||||||||||
(e) Liquidation Preference | |||||||||||||||
In the event of any corporate reorganization, liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, the holders of Series A, Series B and Series C are entitled to receive an amount of $1.00, $7.45 and $5.335 per share, respectively (adjusted to reflect stock dividends, stock splits, and recapitalization), plus any accrued but unpaid dividends. Holders of Series C are entitled to be paid first prior to payment of holders of Series A and Series B. Thereafter, the holders of Series B are entitled to be paid prior to payment of holders of Series A. The remaining assets, if any, shall be distributed among common stockholders. | |||||||||||||||
As of December 31, 2013, the carrying value of the preferred stock has not been adjusted to its liquidation redemption value as an event that would trigger liquidation redemption is not considered probable. | |||||||||||||||
(f) Conversion Rights | |||||||||||||||
Each share of convertible preferred stock, at the option of the holder, is convertible at any time into the number of shares of common stock (adjusted to reflect stock dividends, stock splits and recapitalization) that results from dividing the original issue price by the conversion price in effect at the time of the conversion. The initial per share conversion price of the Series A, Series B and C convertible preferred stock is $2.75, $20.49 and $14.671 per share, respectively, and subject to adjustment in accordance with antidilution provisions contained in the Company's Articles of Incorporation. | |||||||||||||||
If not previously converted at the option of the holder, the conversion of the convertible preferred stock is automatic and will be converted at the then applicable conversion prices upon the earlier of any of the following events: (i) affirmative election of the holders of at least 65% of the then outstanding shares of the convertible preferred stock on an as-if converted basis, or (ii) the closing of a firm commitment underwritten public offering based on an effective registration statement under the Securities Act of 1933 for the issuance of common stock. The per-share price must be at least 200% of the Series C purchase price resulting in the aggregate proceeds raised from the offering of at least greater than $35,000 or (iii) consent of holders of at least 65% of the then outstanding shares of the convertible preferred stock, on an as-if converted basis, in connection with any mandatory conversion, as prescribed in the Certificate of Incorporation, in which the current fair market value of the Company's Common Stock exceeds the Series C purchase price or (iv) upon the consent of the holders of at least 65% of the then outstanding shares of the convertible preferred stock, on an as-if converted basis, including the consent of all stockholders that hold in excess of 19% of the then outstanding shares of the preferred stock of the Company. | |||||||||||||||
(g) Stock Option Plan | |||||||||||||||
In April 2007, the Company adopted the 2007 Equity Incentive Plan, or 2007 Plan. The 2007 Plan provides for the granting of stock options to employees, directors and consultants of the Company. Options granted under the 2007 Plan may either be incentive stock options or nonstatutory stock options. Incentive stock options, or ISO, may be granted only to Company employees. Nonstatutory stock options, or NSO, may be granted to all eligible recipients. A total of 1,690,448 shares of the Company's common stock were reserved for issuance for the 2007 Plan. | |||||||||||||||
Options under the 2007 Plan may be granted for periods of up to ten years as determined by the Board of Directors, provided, however, that (i) the exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a more than 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. An NSO has no such exercise price limitations. The options generally vest on a straight-lined basis over the requisite service period of four years for the award. The vesting provisions of individual options may vary but provide for vesting of at least 25% per year. | |||||||||||||||
As of December 31, 2014, pursuant to the 2007 Plan, there were 1,631,922 shares of common stock reserved and no shares of common stock available for future grants. | |||||||||||||||
Our board of directors adopted our 2014 Equity Incentive Plan, or 2014 Plan, in July 2014, and our stockholders approved the 2014 Plan in October 2014. The 2014 Plan became effective upon completion of the IPO, at which time the Company ceased making awards under the 2007 Plan. Under the 2014 Plan, the Company may issue ISO, NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards and other forms of stock awards, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of us and our affiliates. ISOs may be granted only to employees. A total of 1,027,500 shares of common stock were initially reserved for issuance under the 2014 Plan, subject to certain annual increases. | |||||||||||||||
Options under the 2014 Plan may be granted for periods of up to ten years as determined by the Board of Directors, provided, however, that (i) the exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a more than 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant and the option is not exercisable after the expiration of five years from the date of grant. An NSO has no such exercise price limitations. The options generally vest on a straight-lined basis over the requisite service period of four years for the award. The vesting provisions of individual options may vary but provide for vesting of at least 25% per year. | |||||||||||||||
As of December 31, 2014, pursuant to the 2014 Plan, there were 1,027,500 shares of common stock reserved and 986,138 shares of common stock available for future grants. | |||||||||||||||
The following summarizes all option activity under the 2007 and 2014 Plan: | |||||||||||||||
Option Shares | Weighted | Weighted | |||||||||||||
average | average | ||||||||||||||
exercise price | remaining | ||||||||||||||
contractual | |||||||||||||||
term(years) | |||||||||||||||
Balances at December 31, 2012 | 1,409,047 | $ | 2.67 | ||||||||||||
Granted | 26,356 | 3.8 | |||||||||||||
Exercised | (3,025 | ) | 3.41 | ||||||||||||
Forfeited | (10,063 | ) | 3.93 | ||||||||||||
| | | | | | | | | | | |||||
Balances at December 31, 2013 | 1,422,315 | $ | 2.67 | 5.76 | |||||||||||
Granted | 266,069 | 12.72 | |||||||||||||
Exercised | (12,900 | ) | 2.99 | ||||||||||||
Forfeited | (20,578 | ) | 5.55 | ||||||||||||
Balances at December 31, 2014 | 1,654,906 | $ | 4.25 | 5.48 | |||||||||||
| | | | | | | | | | | |||||
| | | | | | | | | | | |||||
Vested and expected to vest at December 31, 2014 | 1,654,906 | $ | 4.25 | 5.48 | |||||||||||
| | | | | | | | | | | |||||
| | | | | | | | | | | |||||
Vested and exercisable at December 31, 2014 | 1,245,505 | $ | 2.54 | 4.42 | |||||||||||
| | | | | | | | | | | |||||
| | | | | | | | | | | |||||
The weighted average grant date fair value of stock options granted to employees and directors during the years ended December 31, 2014 and 2013 was $6.82 and $1.90 per share, respectively. Stock-based compensation expense for the years ended December 31, 2014, 2013 and 2012 was $560, $342 and $357, respectively. Tax benefits arising from the disposition of certain shares issued upon exercise of stock options within two years of the date of grant or within one year of the date of exercise by the option holder, or Disqualifying Dispositions, provide the Company with a tax deduction equal to the difference between the exercise price and the fair market value of the stock on the date of exercise. When realized, those excess windfall tax benefits are credited to additional paid-in capital. As of December 31, 2014 and 2013, there were total unrecognized compensation costs of $1,898 and $723, respectively, related to these stock options. The expense is recorded within the operating expense captions in the statement of operations based on the employees receiving the awards. As of December 31, 2014, these costs are expected to be recognized over a weighted average period of 2.84 years. | |||||||||||||||
The aggregate intrinsic value of stock options is calculated as the difference between the exercise price of the stock options and the fair value of the Company's common stock for those stock options that had exercise prices lower than the fair value of the Company's common stock. The aggregate intrinsic value of stock options exercised was $176 and $1 during the years ended December 31, 2014 and 2013, respectively. | |||||||||||||||
The Company estimated the fair value of stock options using the Black-Scholes option valuation model. The fair value of employee stock options is being amortized on a straight-line basis over the requisite service period of the awards. The fair value of employee stock options was estimated using the following assumptions: | |||||||||||||||
Year ended December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Expected term (in years) | 5.77 to 6.08 | 6.08 | |||||||||||||
Expected volatility | 52% to 57% | 56% | |||||||||||||
Risk-free interest rate | 1.71% to 2.00% | 1.00% to 1.76% | |||||||||||||
Dividend yield | — | — | |||||||||||||
The expected term of employee stock options, risk-free interest rate and volatility represents the weighted average, based on grant date period, which the stock options are expected to remain outstanding. The Company utilized the simplified method to estimate the expected term of the options pursuant to ASC Subtopic 718-10 for all option grants to employees. The expected volatility is based upon historical volatilities of an index of a peer group because it is not practicable to make a reasonable estimate of the Company's volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected term of the option. The dividend yield assumption is based on the Company's history and expectation of dividend payouts. The Company has never declared or paid any cash dividends on its common stock, and the Company does not anticipate paying any cash dividends in the foreseeable future. | |||||||||||||||
As stock-based compensation expense recognized in the Company's statement of operations is based on awards ultimately expected to vest, the amount has been reduced for estimated forfeitures. Forfeitures were estimated based on the Company's historical experience and future expectations. | |||||||||||||||
For purposes of financial accounting for stock-based compensation, the Company has determined the fair values of its options based in part on the work of a third-party valuation specialist. The determination of stock-based compensation is inherently uncertain and subjective and involves the application of valuation models and assumptions requiring the use of judgment. If the Company had made different assumptions, its stock-based compensation expense, and its net loss could have been significantly different. | |||||||||||||||
(h) Employee Stock Purchase Plan | |||||||||||||||
The Company's board of directors adopted the 2014 Employee Stock Purchase Plan, or ESPP, in July 2014, and the stockholders approved the ESPP in October 2014. The ESPP allows eligible employees to purchase shares of the Company's common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides offering periods not to exceed 27 months, and each offering period will include purchase periods, which will be the approximately six-month period commencing with one exercise date and ending with the next exercise date, except that the first offering period commenced on the first trading day following the effective date of the Company's registration statement. Employees are able to purchase shares at 85% of the lower of the fair market value of the Company's common stock on the first trading day of the offering period or on the exercise date. The number of shares available for sale under the 2014 Employee Stock Purchase Plan will be increased annually on the first day of each fiscal year, equal to the lesser of i) 1% of the total outstanding shares of the Company's common stock as of the last day of the immediately preceding fiscal year; ii) 3,000,000 shares of common stock, or iii) such lesser amount as determined by the Board of Directors. | |||||||||||||||
At December 31, 2014, no purchase has been made and 255,500 shares were available for future issuance under the ESPP. In 2014, the Company recorded $34 of stock-based expense related to the ESPP. | |||||||||||||||
The Company estimated the fair value of employee stock purchase rights using the Black-Scholes model. The fair value of employee stock purchase right is being amortized on a straight-line basis over the requisite service period. The fair value of employee stock purchase right was estimated using the following assumptions: | |||||||||||||||
Year ended | |||||||||||||||
December 31, 2014 | |||||||||||||||
Expected term (in years) | 0.63 to 2.14 | ||||||||||||||
Expected volatility | 43% to 44% | ||||||||||||||
Risk-free interest rate | 0.08% to 0.49% | ||||||||||||||
Dividend yield | — | ||||||||||||||
Commitments_and_Contingencies
Commitments and Contingencies | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | |||||
Commitments and Contingencies | |||||
(9) Commitments and Contingencies | |||||
(a) Operating Lease Commitment | |||||
In August 2013, the Company entered into a four month warehouse lease in Santa Barbara, California, commencing on September 1, 2013. This operating lease is used for additional general office, warehouse, and research and development. This lease was renewed on December 10, 2013 for an additional six months, and was renewed again in June 2014 for an additional 12 months. | |||||
In March 2014, the Company entered into a 68 month lease agreement in Santa Barbara, California. The operating lease is for general office use only and commenced on July 1, 2014. | |||||
The terms of the facility lease provide for rental payments on a graduated scale. The Company recognizes rent expense on a straight-line basis over the lease term. Rent expense for the years ended December 31, 2014, 2013 and 2012 was $424, $359 and $376, respectively. | |||||
As of December 31, 2014, future minimum lease payments under all non-cancelable operating leases are as follows: | |||||
Years ending December 31: | |||||
2015 | $ | 500 | |||
2016 | 400 | ||||
2017 | 403 | ||||
2018 | 415 | ||||
2019 and thereafter | 499 | ||||
| | | | | |
$ | 2,217 | ||||
| | | | | |
| | | | | |
(b) Contingencies | |||||
The Company is subject to claims and assessments from time to time in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual as of December 31, 2014. | |||||
On March 27, 2012, Mentor Worldwide LLC (Mentor), a wholly owned subsidiary of Johnson & Johnson, filed thirteen lawsuits against fifteen employees of the Company (all former Mentor employees) and, on June 8, 2012, filed a fourteenth lawsuit against the Company and an additional employee. In general, these fourteen lawsuits alleged that the former employees of Mentor breached their confidentiality and non-compete agreements when they resigned in favor of employment with the Company; misappropriated confidential Mentor information and trade secrets; and breached their respective duties of loyalty. Although not a party to thirteen employee lawsuits, the Company provided for the defense of its employees in the lawsuits. In the employee lawsuits, all of Mentor's claims for Preliminary Injunctive Relief were denied. Following that, some of the employee lawsuits were dismissed with prejudice and others dismissed without prejudice. On October 3, 2013, the last of the thirteen employee lawsuits was dismissed. | |||||
In the sole lawsuit against the Company, the Company and its employee prevailed at trial with verdicts of "no liability" rendered by the jury and judge. Final judgment in this case was entered on October 3, 2013 with the plaintiff ordered to reimburse defendants for certain court costs, and in 2014, Mentor waived its right to appeal. | |||||
In 2012, the Company filed a claim with the Hartford Insurance Company (Hartford) for reimbursement of legal costs incurred in connection with litigation with Mentor. The Company holds a D&O insurance policy with Hartford, and the Company and Hartford settled the matter in May 2014. The Company received settlement payments from Hartford of $2,358 and $351 for the years ended December 31, 2014 and 2013, respectively. | |||||
Summary_of_Quarterly_Financial
Summary of Quarterly Financial Information (Unaudited) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Quarterly Financial Information (Unaudited) | ||||||||||||||
Summary of Quarterly Financial Information (Unaudited) | ||||||||||||||
(10) Summary of Quarterly Financial Information (Unaudited) | ||||||||||||||
The following tables set forth our unaudited quarterly statements of operations data in dollars and as a percentage of revenue and our key metrics for each of the eight quarters ended December 31, 2014. We have prepared the quarterly data on a consistent basis with the audited financial statements included in this report. In the opinion of management, the financial information reflects all necessary adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of this data. This information should be read in conjunction with the audited financial statements and related notes included elsewhere in this report. The results of historical periods are not necessarily indicative of the results of operations for a full year or any future period. | ||||||||||||||
Quarter Ended | ||||||||||||||
2014 | March 31 | June 30 | September 30 | December 31 | ||||||||||
Net sales | $ | 10,228 | $ | 11,719 | $ | 10,670 | $ | 12,116 | ||||||
Gross profit | 7,654 | 8,838 | 7,838 | 8,903 | ||||||||||
Net loss | (953 | ) | (209 | ) | (1,452 | ) | (3,197 | ) | ||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (4.59 | ) | $ | (1.00 | ) | $ | (6.94 | ) | $ | (0.34 | ) | ||
Quarter Ended | ||||||||||||||
2013 | March 31 | June 30 | September 30 | December 31 | ||||||||||
Net sales | $ | 8,461 | $ | 9,479 | $ | 7,981 | $ | 9,250 | ||||||
Gross profit | 6,486 | 7,070 | 6,013 | 7,010 | ||||||||||
Net loss | (4,112 | ) | (5,463 | ) | (6,475 | ) | (3,075 | ) | ||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (14.85 | ) | $ | (22.65 | ) | $ | (31.45 | ) | $ | (14.85 | ) | ||
Schedule_II_Valuation_And_Qual
Schedule II - Valuation And Qualifying Accounts | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Schedule II - Valuation And Qualifying Accounts | ||||||||||||||
Schedule II - Valuation And Qualifying Accounts | ||||||||||||||
Sientra, Inc. | ||||||||||||||
Schedule II—Valuation and Qualifying Accounts | ||||||||||||||
December 31, 2014, 2013 and 2012 | ||||||||||||||
(In thousands) | ||||||||||||||
Balance at | Additions | Deductions(1) | Balance at | |||||||||||
beginning of | charged to | end of | ||||||||||||
period | costs and | period | ||||||||||||
expenses | ||||||||||||||
Year ended December 31, 2012 Allowance for sales returns | $ | 95 | $ | 27,884 | $ | (23,645 | ) | $ | 4,334 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Year ended December 31, 2013 Allowance for sales returns | $ | 4,334 | $ | 93,768 | $ | (89,832 | ) | $ | 8,270 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Year ended December 31, 2014 Allowance for sales returns | $ | 8,270 | $ | 110,033 | $ | (108,285 | ) | $ | 10,018 | |||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
-1 | Amounts represent actual sales returns. | |||||||||||||
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
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 (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 reserves, 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 stock-based compensation and other equity instruments. | ||||||||||||||
Liquidity | ||||||||||||||
(b) Liquidity | ||||||||||||||
Since inception, the Company has incurred net losses. During the years ended December 31, 2014, 2013, and 2012 the Company incurred net losses of $5,811, $19,125, and $23,433, respectively. The Company provided $450 of cash in operations for the year ended December 31, 2014 and used $25,877 and $29,846 of cash in operations during the years ended December 31, 2013 and 2012, respectively. At December 31, 2014 and 2013 the Company had an accumulated deficit of $134,046 and $128,235, respectively. At December 31, 2014, the Company had cash and cash equivalents of $96,729. The Company's ability to continue to meet its obligations and to achieve its business objectives is dependent upon, amongst other things, generating sufficient revenues. The Company believes that it has the ability to continue as a going concern through at least December 31, 2015. | ||||||||||||||
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 to be cash equivalents. Cash equivalents consist primarily of checking 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 a financial institution that management believes is creditworthy. The Company is exposed to credit risk in the event of default by this financial institution for cash and cash equivalents in excess of amounts insured by the Federal Deposit Insurance Corporation (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 currently purchases all of its Breast Products from one supplier under an exclusivity contract. The supplier and its production facility are located in Brazil. The Company is exposed to risks of foreign regulations in Brazil that could hinder the Company's ability to import goods, as well as halts or limitations in productions due to events outside of the Company's control occurring at the production facility. 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. Management believes that there is minimal risk of such events occurring. | ||||||||||||||
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, and customer deposits are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the common stock warrant liability is discussed in Note 2(f). The fair value of our long-term debt is based on the amount of future cash flows associated with the instrument discounted using our current market rate. At December 31, 2014, the carrying value of the long-term debt was not materially different from the fair value. | ||||||||||||||
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. | |||||||||||||
The Company's common stock warrant liabilities are carried at fair value determined according to the fair value hierarchy described above. The Company has utilized an option pricing valuation model to determine the fair value of its outstanding common stock warrant liabilities. The inputs to the model include fair value of the common stock related to the warrant, exercise price of the warrant, expected term, expected volatility, risk-free interest rate and dividend yield. Prior to the IPO, the Company determined the fair value per share of the underlying common stock by taking into consideration its most recent sale of its convertible preferred stock as well as additional factors that the Company deems relevant. Subsequent to the IPO, the warrants are valued using the fair value of common stock as of the measurement date. The Company historically has been a private company and lacks company-specific historical and implied volatility information of its stock. Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company has estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends. As several significant inputs are not observable, the overall fair value measurement of the warrants is classified as Level 3. | ||||||||||||||
The following tables present information about the Company's liabilities that are measured at fair value on a recurring basis as of December 31, 2014 and 2013 and indicate the level of the fair value hierarchy utilized to determine such fair value: | ||||||||||||||
Fair Value Measurements as of | ||||||||||||||
December 31, 2014 Using: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Liability for common stock warrants | $ | — | — | 420 | 420 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements as of | ||||||||||||||
December 31, 2013 Using: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Liability for common stock warrants | $ | — | — | 90 | 90 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
The following table provides a rollforward of the aggregate fair values of the Company's common stock warrants for which fair value is determined by Level 3 inputs: | ||||||||||||||
Fair value upon issuance during 2013 | $ | 44 | ||||||||||||
Increase in fair value through December 31, 2013 | 46 | |||||||||||||
| | | | | ||||||||||
Balance, January 1, 2014 | 90 | |||||||||||||
Fair value of warrants upon issuance during 2014 | 110 | |||||||||||||
Increase in fair value through December 31, 2014 | 220 | |||||||||||||
| | | | | ||||||||||
Balance, December 31, 2014 | $ | 420 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
The company recognized changes in the fair value of these warrants in other (expense) income, net in the statement of operations. | ||||||||||||||
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 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 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. | ||||||||||||||
Goodwill and Other Intangible Assets | ||||||||||||||
(h) Goodwill and Other Intangible Assets | ||||||||||||||
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. The Company's annual test for impairment is performed as of October 1 of each fiscal year. The Company makes a qualitative assessment of whether it is more likely than not that a reporting unit's fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it is not required to perform the two-step impairment test for that reporting unit. | ||||||||||||||
Under the first step of the test, the Company is required to compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and the second step of the test is not performed. If the results of the first step of the impairment test indicate that the fair value of a reporting unit does not exceed its carrying amount, then the second step of the test is required. The second step of the test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The impairment loss is measured by the excess of the carrying amount of the reporting unit goodwill over the implied fair value of that goodwill. | ||||||||||||||
Management evaluates the Company as a single reporting unit for business and operating purposes as all of the Company's revenue streams are generated by the same underlying products via sales in the United States of America. In addition, the majority of the Company's costs are, by their nature, shared costs that are not specifically identifiable to a geography or product line, but relate to all products. As a result, there is a high degree of interdependency among the Company's net sales and cash flows for the entity and identifiable cash flows for a reporting unit separate from the entity are not meaningful. | ||||||||||||||
Judgments about the recoverability of purchased finite-lived intangible assets are made whenever events or changes in circumstance indicate that impairment may exist. 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. Recoverability of finite-lived intangible assets is measured by comparison of the carrying amount of the asset to the future undiscounted cash flows the asset is expected to generate. The intangible asset is amortized to the statement of operations based on estimated cash flows generated from the intangible over its estimated life. | ||||||||||||||
Impairment of Long-Lived Assets | ||||||||||||||
(i) Impairment of 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 assets 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 of long-lived assets recorded during the years ended December 31, 2014, 2013 and 2012. The Company may record impairment losses in future periods if factors influencing its estimates change. | ||||||||||||||
Revenue Recognition | ||||||||||||||
(j) Revenue Recognition | ||||||||||||||
The Company sells its product directly to customers in markets where it has regulatory approval. The Company offers a six-month return policy and recognizes revenue net of sales discounts and returns in accordance with the Financial Accounting Standards Board, or FASB, Accounting Standards Codification 605, Revenue Recognition (ASC 605). ASC 605 requires that six basic criteria must be met before revenue can be recognized when a right of return exists: | ||||||||||||||
• | the seller's price to the buyer is substantially fixed or determinable at the date of sale; | |||||||||||||
• | the buyer has paid the seller, or the buyer is obligated to pay the seller and the obligation is not contingent on resale of the product; | |||||||||||||
• | the buyer's obligation to the seller would not be changed in the event of theft or physical destruction or damage of the product; | |||||||||||||
• | the buyer acquiring the product for resale has economic substance apart from that provided by the seller; | |||||||||||||
• | the seller does not have significant obligations for future performance to directly bring about resale of the product by the buyer; and | |||||||||||||
• | the amount of future returns can be reasonably estimated. | |||||||||||||
Appropriate reserves are established for anticipated sales returns based on historical experience, recent gross sales and any notification of pending returns. The Company recognizes revenue when title to the product and risk of loss transfer to customers, provided there are no remaining performance obligations required of the Company or any written matters requiring customer acceptance. The Company allows for the return of product from customers within six months after the original sale and records estimated sales returns as a reduction of sales in the same period revenue is recognized. Sales return provisions are calculated based upon historical experience with actual returns. 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 Company has established an allowance for sales returns of $10,018 and $8,270 as of December 31, 2014 and 2013, respectively, recorded net against accounts receivable in the balance sheet. | ||||||||||||||
A portion of the Company's revenue is generated from consigned inventory of breast implants maintained at doctor, hospital, and clinic locations. The customer is contractually obligated to maintain a specific level of inventory and to notify the Company upon use. For these products, revenue is recognized at the time the Company is notified by the customer that the product has been implanted. Notification is usually through the replenishing of the inventory and the Company periodically reviews consignment inventories to confirm accuracy of customer reporting. FDA regulations require tracking the sales of all implanted products. | ||||||||||||||
Shipping and handling charges are largely provided to customers free of charge. The associated costs are viewed as part of the Company's marketing programs and are recorded as a component of sales and marketing expense in the statement of operations. For the years ended December 31, 2014, 2013 and 2012 these costs amounted to $1,305, $1,021 and $354, respectively. | ||||||||||||||
In other cases, shipping and handling charges may be invoiced to customers based on the amount of products sold. In such cases, shipping and handling fees collected are recorded as revenue and the related expense as a component of cost of goods sold. | ||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts | ||||||||||||||
(k) 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. The Company has established an allowance for doubtful accounts of $312 and $273 as of December 31, 2014 and 2013, respectively. | ||||||||||||||
Inventories and Cost of Goods Sold | ||||||||||||||
(l) Inventories and Cost of Goods Sold | ||||||||||||||
Inventories represent finished goods that are recorded at the lower of cost or market on a first-in, first-out basis (FIFO). 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. | ||||||||||||||
The Company recognizes the cost of inventory transferred to the customer in cost of goods sold when revenue is recognized. | ||||||||||||||
At December 31, 2014 and 2013, approximately $1,989 and $528, respectively, of the Company's inventory was held on consignment at doctors' offices, clinics, and hospitals. The value and quantity at any one location is not significant. | ||||||||||||||
Income Taxes | ||||||||||||||
(m) 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 accounts for uncertain tax position in accordance with 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 | ||||||||||||||
(n) 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 and stock-based compensation expense. | ||||||||||||||
Advertising | ||||||||||||||
(o) Advertising | ||||||||||||||
Expenses related to advertising are charged to sales and marketing expense as incurred. Advertising costs were $1,548, $801 and $510 for fiscal years 2014, 2013 and 2012, respectively. | ||||||||||||||
Stock-Based Compensation | ||||||||||||||
(p) Stock-Based Compensation | ||||||||||||||
The Company applies the fair value provisions of ASC 718, Compensation—Stock Compensation (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 and the employee stock purchase plan. ASC 718 requires companies to estimate the fair value of share-based payment awards on the date of grant using an option-pricing model. All option grants valued are being expensed on a straight-line basis over their vesting period. | ||||||||||||||
Product Warranties | ||||||||||||||
(q) Product Warranties | ||||||||||||||
The Company offers a limited warranty and a lifetime product replacement program for the Company's silicone gel breast implants. Under the limited warranty program, the Company will reimburse patients for certain out-of-pocket costs related to revision surgeries performed within ten years from the date of implantation in a covered event. Under the lifetime product replacement program, the Company provides no-charge replacement breast implants under a covered event. The programs are available to all patients implanted with the Company's silicone breast implants after April 1, 2012 and are subject to the terms, conditions, claim procedures, limitations and exclusions. Timely completion of a device tracking and warranty enrollment form by the patient's Plastic Surgeon is required to activate the programs and for the patient to be able to receive benefits under either program. | ||||||||||||||
The following table provides a rollforward of the accrued warranties: | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Beginning balance | $ | 515 | $ | 123 | ||||||||||
Payment made during the period | (1 | ) | — | |||||||||||
Changes in accrual related to warranties issued during the period | 509 | 392 | ||||||||||||
Changes in accrual related to pre-existing warranties | (62 | ) | — | |||||||||||
| | | | | | | | |||||||
Ending balance | $ | 961 | $ | 515 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Deferred Equity Issuance Costs | ||||||||||||||
(r) Deferred Equity Issuance Costs | ||||||||||||||
Deferred equity issuance costs, primarily consisting of legal, accounting and other direct fees and costs relating to the IPO, were capitalized, as incurred, in other current assets prior to the completion of the IPO. Upon completion of the IPO, $3,178 of issuance costs were capitalized, all of which were reclassified to additional-paid-in capital to offset the IPO proceeds. | ||||||||||||||
Segment Information | ||||||||||||||
(s) Segment Information | ||||||||||||||
Management has determined that it has one business activity and operates in one segment as it only reports financial information on an aggregate basis to its Chief Executive Officer, who is the Company's chief operating decision maker. All tangible assets are held in the United States. | ||||||||||||||
Net Loss Per Share | ||||||||||||||
(t) Net Loss Per Share | ||||||||||||||
Basic loss per share attributable to common stockholders is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding, to the extent they are dilutive. Potential common shares consist of shares issuable upon the exercise of stock options and warrants (using the treasury stock method), and the weighted average conversion of the convertible preferred stock into shares of common stock (using the if-converted method). Dilutive loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive. | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Net loss | $ | (5,811 | ) | $ | (19,125 | ) | $ | (23,433 | ) | |||||
Weighted average common shares outstanding, basic and diluted | 2,545,371 | 232,512 | 275,642 | |||||||||||
| | | | | | | | | | | ||||
Net loss per share attributable to common stockholders | $ | (2.28 | ) | $ | (82.25 | ) | $ | (85.01 | ) | |||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
The Company excluded the following potentially dilutive securities, outstanding as of December 31, 2014, 2013 and 2012 from the computation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2014, 2013 and 2012 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods. | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Stock options to purchase common stock | 1,613,544 | 1,422,315 | 1,409,047 | |||||||||||
Warrants for the purchase of common stock | 47,710 | 30,670 | — | |||||||||||
Convertible preferred stock (as converted to common stock) | — | 8,942,925 | 8,942,925 | |||||||||||
| | | | | | | | | | | ||||
1,661,254 | 10,395,910 | 10,351,972 | ||||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Recent Accounting Pronouncements | ||||||||||||||
(u) Recent Accounting Pronouncements | ||||||||||||||
In May 2014, the FASB issued accounting standard update 2014-09, Revenue from Contracts with Customers. The standard was issued to provide a single framework that replaces existing industry and transaction specific GAAP with a five step analysis of transactions to determine when and how revenue is recognized. This accounting standard update is expected to be effective for the Company beginning in fiscal year 2018. The Company is currently assessing the impact that the standard will have on the financial statements upon adoption of the guidance. | ||||||||||||||
In August 2014, the FASB issued accounting standard update 2014-15, Presentation of Financial Statement—Going Concern. The standard was issued to provide guidance about management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern and to provide related footnote disclosures. This accounting standard updated will be effective for the Company beginning in fiscal year 2016. The Company anticipates there will be no impact on its financial statement upon adoption of this guidance. | ||||||||||||||
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Significant Accounting Policies | ||||||||||||||
Schedule of Company's liabilities that are measured at fair value on a recurring basis | ||||||||||||||
Fair Value Measurements as of | ||||||||||||||
December 31, 2014 Using: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Liability for common stock warrants | $ | — | — | 420 | 420 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Fair Value Measurements as of | ||||||||||||||
December 31, 2013 Using: | ||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||
Liabilities: | ||||||||||||||
Liability for common stock warrants | $ | — | — | 90 | 90 | |||||||||
| | | | | | | | | | | | | | |
| | | | | | | | | | | | | | |
Schedule of aggregate fair values of the Company's common stock warrants for which fair value is determined by Level 3 inputs | ||||||||||||||
Fair value upon issuance during 2013 | $ | 44 | ||||||||||||
Increase in fair value through December 31, 2013 | 46 | |||||||||||||
| | | | | ||||||||||
Balance, January 1, 2014 | 90 | |||||||||||||
Fair value of warrants upon issuance during 2014 | 110 | |||||||||||||
Increase in fair value through December 31, 2014 | 220 | |||||||||||||
| | | | | ||||||||||
Balance, December 31, 2014 | $ | 420 | ||||||||||||
| | | | | ||||||||||
| | | | | ||||||||||
Schedule of rollforward of the accrued warranties | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | |||||||||||||
Beginning balance | $ | 515 | $ | 123 | ||||||||||
Payment made during the period | (1 | ) | — | |||||||||||
Changes in accrual related to warranties issued during the period | 509 | 392 | ||||||||||||
Changes in accrual related to pre-existing warranties | (62 | ) | — | |||||||||||
| | | | | | | | |||||||
Ending balance | $ | 961 | $ | 515 | ||||||||||
| | | | | | | | |||||||
| | | | | | | | |||||||
Schedule of net loss per share, basic and diluted | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Net loss | $ | (5,811 | ) | $ | (19,125 | ) | $ | (23,433 | ) | |||||
Weighted average common shares outstanding, basic and diluted | 2,545,371 | 232,512 | 275,642 | |||||||||||
| | | | | | | | | | | ||||
Net loss per share attributable to common stockholders | $ | (2.28 | ) | $ | (82.25 | ) | $ | (85.01 | ) | |||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Schedule of potentially dilutive securities excluded from the computation of diluted net loss per share attributable to common stockholders | ||||||||||||||
December 31, | ||||||||||||||
2014 | 2013 | 2012 | ||||||||||||
Stock options to purchase common stock | 1,613,544 | 1,422,315 | 1,409,047 | |||||||||||
Warrants for the purchase of common stock | 47,710 | 30,670 | — | |||||||||||
Convertible preferred stock (as converted to common stock) | — | 8,942,925 | 8,942,925 | |||||||||||
| | | | | | | | | | | ||||
1,661,254 | 10,395,910 | 10,351,972 | ||||||||||||
| | | | | | | | | | | ||||
| | | | | | | | | | | ||||
Balance_Sheet_Components_Table
Balance Sheet Components (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Balance Sheet Components | ||||||||
Schedule of property and equipment, net | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Leasehold improvements | $ | 69 | $ | 19 | ||||
Computer equipment | 138 | 183 | ||||||
Software | 166 | 85 | ||||||
Office equipment | 167 | 128 | ||||||
Furniture and fixtures | 636 | 456 | ||||||
| | | | | | | | |
1,176 | 871 | |||||||
Less accumulated depreciation | (621 | ) | (617 | ) | ||||
| | | | | | | | |
$ | 555 | $ | 254 | |||||
| | | | | | | | |
| | | | | | | | |
Schedule of accrued and other current liabilities | ||||||||
December 31 | ||||||||
2014 | 2013 | |||||||
Accrued clinical trial and research and development expenses | $ | 109 | $ | 166 | ||||
Audit, consulting and legal fees | 72 | 124 | ||||||
Payroll and related expenses | 2,497 | 1,890 | ||||||
Accrued commission | 1,969 | 1,563 | ||||||
Warrant liability | 420 | 90 | ||||||
Other | 705 | 232 | ||||||
| | | | | | | | |
$ | 5,772 | $ | 4,065 | |||||
| | | | | | | | |
| | | | | | | | |
Goodwill_and_Other_Intangible_1
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended | |||||||
Dec. 31, 2014 | ||||||||
Goodwill and Other Intangible Assets | ||||||||
Schedule of intangible assets | ||||||||
December 31, | ||||||||
2014 | 2013 | |||||||
Acquired FDA non-gel product approval | $ | 1,713 | $ | 1,713 | ||||
Less accumulated amortization | (1,599 | ) | (1,506 | ) | ||||
| | | | | | | | |
$ | 114 | $ | 207 | |||||
| | | | | | | | |
| | | | | | | | |
Summary of estimated amortization expense | ||||||||
2015 | $ | 61 | ||||||
2016 | 37 | |||||||
2017 | 16 | |||||||
| | | | | ||||
$ | 114 | |||||||
| | | | | ||||
Income_Taxes_Tables
Income Taxes (Tables) | 12 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Income Taxes | |||||||||||
Schedule of reconciliation of actual income tax expense obtained by applying the statutory federal income tax rate | |||||||||||
Year Ended December 31, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Tax at federal statutory rate | $ | (1,976 | ) | $ | (6,502 | ) | $ | (7,967 | ) | ||
State, net of federal benefit | (260 | ) | (576 | ) | (774 | ) | |||||
Permanent items | 580 | 339 | 255 | ||||||||
Research and development credits | (216 | ) | (232 | ) | (186 | ) | |||||
Benefit state rate change | (941 | ) | — | — | |||||||
Other | 495 | 15 | 98 | ||||||||
Change in valuation allowance | 2,318 | 6,956 | 8,574 | ||||||||
| | | | | | | | | | | |
$ | — | $ | — | $ | — | ||||||
| | | | | | | | | | | |
| | | | | | | | | | | |
Schedule of tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Net operating loss carryforwards | $ | 39,372 | $ | 37,278 | |||||||
Research and development credits | 2,230 | 2,014 | |||||||||
Depreciation | 36 | 31 | |||||||||
Accruals and reserves | 5,035 | 3,706 | |||||||||
Intangibles | 5,732 | 7,058 | |||||||||
| | | | | | | | ||||
52,405 | 50,087 | ||||||||||
Less valuation allowance | (52,405 | ) | (50,087 | ) | |||||||
| | | | | | | | ||||
Total deferred tax assets | $ | — | $ | — | |||||||
| | | | | | | | ||||
| | | | | | | | ||||
Schedule of reconciliation of the beginning and ending amount of unrecognized tax benefits | |||||||||||
Ending balance at December 31, 2012 | $ | 594 | |||||||||
Additions based on tax positions taken in the current year | 77 | ||||||||||
| | | | | |||||||
Ending balance at December 31, 2013 | 671 | ||||||||||
Additions based on tax positions taken in the current year | 61 | ||||||||||
| | | | | |||||||
Ending balance at December 31, 2014 | $ | 732 | |||||||||
| | | | | |||||||
| | | | | |||||||
Stockholders_Deficit_Tables
Stockholders' Deficit (Tables) | 12 Months Ended | ||||||||||||||
Dec. 31, 2014 | |||||||||||||||
Schedule of convertible preferred stock | |||||||||||||||
Series | Shares | Outstanding | Proceeds | Liquidation | Issuance | ||||||||||
authorized | net of | value | date | ||||||||||||
issuance | |||||||||||||||
costs | |||||||||||||||
A | 1,000,000 | 1,000,000 | $ | 994 | 1,000 | Oct-06 | |||||||||
B | 11,409,397 | 11,409,397 | 84,909 | 85,000 | April 2007 and October 2008 | ||||||||||
C | 12,183,690 | 12,183,690 | 64,553 | 65,000 | Mar-12 | ||||||||||
| | | | | | | | | | | | | | | |
24,593,087 | 24,593,087 | $ | 150,456 | 151,000 | |||||||||||
| | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | |
Summary of option activity | |||||||||||||||
Option Shares | Weighted | Weighted | |||||||||||||
average | average | ||||||||||||||
exercise price | remaining | ||||||||||||||
contractual | |||||||||||||||
term(years) | |||||||||||||||
Balances at December 31, 2012 | 1,409,047 | $ | 2.67 | ||||||||||||
Granted | 26,356 | 3.8 | |||||||||||||
Exercised | (3,025 | ) | 3.41 | ||||||||||||
Forfeited | (10,063 | ) | 3.93 | ||||||||||||
| | | | | | | | | | | |||||
Balances at December 31, 2013 | 1,422,315 | $ | 2.67 | 5.76 | |||||||||||
Granted | 266,069 | 12.72 | |||||||||||||
Exercised | (12,900 | ) | 2.99 | ||||||||||||
Forfeited | (20,578 | ) | 5.55 | ||||||||||||
Balances at December 31, 2014 | 1,654,906 | $ | 4.25 | 5.48 | |||||||||||
| | | | | | | | | | | |||||
| | | | | | | | | | | |||||
Vested and expected to vest at December 31, 2014 | 1,654,906 | $ | 4.25 | 5.48 | |||||||||||
| | | | | | | | | | | |||||
| | | | | | | | | | | |||||
Vested and exercisable at December 31, 2014 | 1,245,505 | $ | 2.54 | 4.42 | |||||||||||
| | | | | | | | | | | |||||
| | | | | | | | | | | |||||
Stock options | |||||||||||||||
Schedule of fair value of employee stock options estimated using Black-Scholes option valuation model | |||||||||||||||
Year ended December 31, | |||||||||||||||
2014 | 2013 | ||||||||||||||
Expected term (in years) | 5.77 to 6.08 | 6.08 | |||||||||||||
Expected volatility | 52% to 57% | 56% | |||||||||||||
Risk-free interest rate | 1.71% to 2.00% | 1.00% to 1.76% | |||||||||||||
Dividend yield | — | — | |||||||||||||
2014 Employee Stock Purchase Plan | |||||||||||||||
Schedule of fair value of employee stock options estimated using Black-Scholes option valuation model | |||||||||||||||
Year ended | |||||||||||||||
December 31, 2014 | |||||||||||||||
Expected term (in years) | 0.63 to 2.14 | ||||||||||||||
Expected volatility | 43% to 44% | ||||||||||||||
Risk-free interest rate | 0.08% to 0.49% | ||||||||||||||
Dividend yield | — | ||||||||||||||
Commitments_and_Contingencies_
Commitments and Contingencies (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Commitments and Contingencies | |||||
Schedule of future minimum lease payments under non-cancelable operating leases | |||||
Years ending December 31: | |||||
2015 | $ | 500 | |||
2016 | 400 | ||||
2017 | 403 | ||||
2018 | 415 | ||||
2019 and thereafter | 499 | ||||
| | | | | |
$ | 2,217 | ||||
| | | | | |
| | | | | |
Summary_of_Quarterly_Financial1
Summary of Quarterly Financial Information (Unaudited) (Tables) | 12 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Summary of Quarterly Financial Information (Unaudited) | ||||||||||||||
Summary of Quarterly Financial Information (Unaudited) | ||||||||||||||
Quarter Ended | ||||||||||||||
2014 | March 31 | June 30 | September 30 | December 31 | ||||||||||
Net sales | $ | 10,228 | $ | 11,719 | $ | 10,670 | $ | 12,116 | ||||||
Gross profit | 7,654 | 8,838 | 7,838 | 8,903 | ||||||||||
Net loss | (953 | ) | (209 | ) | (1,452 | ) | (3,197 | ) | ||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (4.59 | ) | $ | (1.00 | ) | $ | (6.94 | ) | $ | (0.34 | ) | ||
Quarter Ended | ||||||||||||||
2013 | March 31 | June 30 | September 30 | December 31 | ||||||||||
Net sales | $ | 8,461 | $ | 9,479 | $ | 7,981 | $ | 9,250 | ||||||
Gross profit | 6,486 | 7,070 | 6,013 | 7,010 | ||||||||||
Net loss | (4,112 | ) | (5,463 | ) | (6,475 | ) | (3,075 | ) | ||||||
Net loss per share: | ||||||||||||||
Basic and diluted | $ | (14.85 | ) | $ | (22.65 | ) | $ | (31.45 | ) | $ | (14.85 | ) | ||
Formation_and_Business_of_the_1
Formation and Business of the Company (Details) (USD $) | 12 Months Ended | 0 Months Ended | |||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Nov. 03, 2014 | Oct. 10, 2014 | Dec. 31, 2013 | Jun. 30, 2014 |
Payment of underwriting discounts and commissions and offering expenses | $3,107 | ||||
Convertible preferred stock, shares outstanding | 0 | 24,593,087 | |||
Tranche D term loan | |||||
Threshold amount of gross proceeds in IPO to determine extended interest period of debt instruments | 50,000 | ||||
Tranche D term loan | IPO | |||||
Threshold amount of gross proceeds in IPO to determine extended interest period of debt instruments | 50,000 | ||||
Common stock | |||||
Conversion rate | 0.364 | ||||
Shares issued on conversion of Series A, Series B and Series C preferred stock | 8,942,925 | ||||
Common stock | IPO | |||||
Shares issued | 5,750,000 | ||||
Initial public offering price (in dollars per share) | 15 | ||||
Net proceeds after deducting underwriting discounts and commissions and offering expenses | 77,035 | ||||
Payment of underwriting discounts and commissions and offering expenses | 9,215 | ||||
Common stock | Over allotment option exercised by underwriters | |||||
Shares issued | 750,000 | ||||
Preferred Stock | |||||
Conversion rate | 2.75 | ||||
Convertible preferred stock | |||||
Conversion rate | 2.75 |
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Details) (USD $) | 3 Months Ended | 12 Months Ended | ||||||||||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 |
item | ||||||||||||
Summary of Significant Accounting Policies | ||||||||||||
Net loss | $3,197 | $1,452 | $209 | $953 | $3,075 | $6,475 | $5,463 | $4,112 | $5,811 | $19,125 | $23,433 | |
Net cash provided by (used in) operations | 450 | -25,877 | -29,846 | |||||||||
Accumulated deficit | 134,046 | 128,235 | 134,046 | 128,235 | ||||||||
Cash and cash equivalents | $96,729 | $9,722 | $96,729 | $9,722 | $39,208 | $4,892 | ||||||
Concentration of Credit and Supplier Risks | ||||||||||||
Number of suppliers of Breast Products | 1 |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Details 2) (Warrants, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Fair Value Measurements | ||
Estimated dividend yield | 0.00% | |
Fair values of the Company's common stock warrants determined by Level 3 inputs | ||
Balance at beginning of the period | $90 | |
Fair value of warrants upon issuance | 110 | 44 |
Increase in fair value | 220 | 46 |
Balance at the end of the period | 420 | 90 |
Recurring | ||
Fair Value Measurements | ||
Liabilities | 420 | 90 |
Level 3 | Recurring | ||
Fair Value Measurements | ||
Liabilities | $420 | $90 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Details 3) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment | |||
Estimated useful life of asset | 3 years | ||
Impairment of long-lived assets | $0 | $0 | $0 |
Revenue Recognition | |||
Period for sales return | 6 months | ||
Allowance for sales returns | 10,018 | 8,270 | |
Shipping and handling charges | 1,305 | 1,021 | 354 |
Allowance for doubtful accounts | 312 | 273 | |
Inventory held on consignment at doctors' offices, clinics, and hospitals | 1,989 | 528 | |
Advertising costs | $1,548 | $801 | $510 |
Summary_of_Significant_Account6
Summary of Significant Accounting Policies (Details 4) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
item | ||
Product Warranties | ||
Period to claim reimbursement under limited warranty program | 10 years | |
Beginning balance | $515 | $123 |
Payment made during the period | -1 | |
Changes in accrual related to warranties issued during the period | 509 | 392 |
Changes in accrual related to pre-existing warranties | -62 | |
Ending balance | 961 | 515 |
Deferred Equity Issuance Costs | ||
Deferred equity issuance costs | $3,178 | |
Segment Information | ||
Number of reporting unit | 1 | |
Number of segments | 1 |
Summary_of_Significant_Account7
Summary of Significant Accounting Policies (Details 5) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Net loss per share | |||||||||||
Net loss | ($5,811) | ($19,125) | ($23,433) | ||||||||
Weighted average common shares outstanding, basic and diluted | 2,545,371 | 232,512 | 275,642 | ||||||||
Net loss per share attributable to common stockholders | ($0.34) | ($6.94) | ($1) | ($4.59) | ($14.85) | ($31.45) | ($22.65) | ($14.85) | ($2.28) | ($82.25) | ($85.01) |
Potentially dilutive securities | |||||||||||
Potentially dilutive securities | 1,661,254 | 10,395,910 | 10,351,972 | ||||||||
Stock options to purchase common stock | |||||||||||
Potentially dilutive securities | |||||||||||
Potentially dilutive securities | 1,613,544 | 1,422,315 | 1,409,047 | ||||||||
Warrants | |||||||||||
Potentially dilutive securities | |||||||||||
Potentially dilutive securities | 47,710 | 30,670 | |||||||||
Convertible preferred stock | |||||||||||
Potentially dilutive securities | |||||||||||
Potentially dilutive securities | 8,942,925 | 8,942,925 |
Balance_Sheet_Components_Detai
Balance Sheet Components (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property and equipment, net | |||
Property and equipment, gross | $1,176 | $871 | |
Less accumulated depreciation | -621 | -617 | |
Property and equipment, net | 555 | 254 | |
Depreciation expense | 182 | 148 | 109 |
Leasehold improvements | |||
Property and equipment, net | |||
Property and equipment, gross | 69 | 19 | |
Computer equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 138 | 183 | |
Software | |||
Property and equipment, net | |||
Property and equipment, gross | 166 | 85 | |
Office equipment | |||
Property and equipment, net | |||
Property and equipment, gross | 167 | 128 | |
Furniture and fixtures | |||
Property and equipment, net | |||
Property and equipment, gross | $636 | $456 |
Balance_Sheet_Components_Detai1
Balance Sheet Components (Details 2) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Accrued and other current liabilities | ||
Accrued clinical trial and research and development expenses | $109 | $166 |
Audit, consulting and legal fees | 72 | 124 |
Payroll and related expenses | 2,497 | 1,890 |
Accrued commission | 1,969 | 1,563 |
Warrant liability | 420 | 90 |
Other | 705 | 232 |
Total | $5,772 | $4,065 |
Longterm_Debt_Details
Long-term Debt (Details) (USD $) | 12 Months Ended | 1 Months Ended | ||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2013 | Jun. 30, 2014 | Jan. 17, 2013 | Jan. 31, 2014 |
Aggregate maturities of long-term debt | ||||||
2015 | $3,757 | |||||
2016 | 11,094 | |||||
2017 | 5,558 | |||||
2018 | 4,223 | |||||
2019 | 368 | |||||
Warrants | ||||||
Changes in the fair value of warrants | 220 | 46 | ||||
Term loan agreement | ||||||
Long-term Debt | ||||||
Face amount | 15,000 | |||||
Interest rate (as a percent) | 8.40% | |||||
Additional lump sum payment | 975 | |||||
Term loan agreement | Warrants | ||||||
Warrants | ||||||
Term of warrants | 7 years | |||||
Minimum gross proceeds to calculate exercise price of warrants | 10,000 | |||||
Tranche A term loan | ||||||
Long-term Debt | ||||||
Face amount | 7,500 | |||||
Tranche A term loan | Warrants | ||||||
Warrants | ||||||
Value of common stock that can be purchased as a percentage of term loan | 3.00% | |||||
Tranche B term loan | ||||||
Long-term Debt | ||||||
Face amount | 2,500 | |||||
Tranche B term loan | Warrants | ||||||
Warrants | ||||||
Value of common stock that can be purchased as a percentage of term loan | 3.00% | |||||
Tranche C term loan | ||||||
Long-term Debt | ||||||
Face amount | 5,000 | |||||
Tranche C term loan | Warrants | ||||||
Warrants | ||||||
Value of common stock that can be purchased as a percentage of term loan | 3.00% | |||||
Share price (in dollars per share) | $14.67 | |||||
Tranche D term loan | ||||||
Long-term Debt | ||||||
Face amount | 10,000 | |||||
Interest rate (as a percent) | 8.40% | |||||
Additional lump sum payment | 650 | |||||
Threshold amount of gross proceeds in IPO to determine extended interest period of debt instruments | 50,000 | |||||
Tranche D term loan | Warrants | ||||||
Warrants | ||||||
Term of warrants | 7 years | |||||
Value of common stock that can be purchased as a percentage of term loan | 2.50% |
Acquisition_of_Silimed_Inc_Det
Acquisition of Silimed, Inc. (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Apr. 04, 2007 | 16-May-13 | Dec. 31, 2014 |
Acquisition of Silimed, Inc. | ||||
Deferred credit (negative goodwill) | $14,278 | $14,278 | ||
Repurchase price | 260 | |||
Silimed | ||||
Acquisition of Silimed, Inc. | ||||
Cash consideration | 29,850 | |||
Common stock issued as consideration (in shares) | 90,909 | |||
Contingent consideration | 70,000 | |||
Deferred credit (negative goodwill) | -4,298 | |||
Release in other assets related to claims against acquiree recognized as additional cost of the asset acquisition | 576 | |||
Silimed | Grader Street founder | ||||
Acquisition of Silimed, Inc. | ||||
Cash consideration | 18,000 | |||
Repurchase price | $260 | |||
Repurchased common shares (in shares) | 72,727 |
Goodwill_and_Other_Intangible_2
Goodwill and Other Intangible Assets (Details) (USD $) | 12 Months Ended | |||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 04, 2007 |
item | ||||
Goodwill and intangible assets | ||||
Goodwill | $14,278 | $14,278 | ||
Number of reporting unit | 1 | |||
Other intangible assets | ||||
Less accumulated amortization | -1,599 | -1,506 | ||
Intangible assets, net | 114 | 207 | ||
Amortization expense | 93 | 132 | 179 | |
Remaining amortization period | 3 years | |||
Estimated amortization expense | ||||
2015 | 61 | |||
2016 | 37 | |||
2017 | 16 | |||
Intangible assets, net | 114 | 207 | ||
Silimed | ||||
Goodwill and intangible assets | ||||
Goodwill | -4,298 | |||
Silimed | Acquired FDA non-gel product approval | ||||
Other intangible assets | ||||
Intangible assets, gross | $1,713 | $1,713 |
Income_Taxes_Details
Income Taxes (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Income Taxes | |||
Statutory federal income tax rate (as a percent) | 34.00% | ||
Reconciliation of actual income tax expense obtained by applying the statutory federal income tax rate | |||
Tax at federal statutory rate | ($1,976) | ($6,502) | ($7,967) |
State, net of federal benefit | -260 | -576 | -774 |
Permanent items | 580 | 339 | 255 |
Research and development credits | -216 | -232 | -186 |
Benefit state rate change | -941 | ||
Other | 495 | 15 | 98 |
Change in valuation allowance | 2,318 | 6,956 | 8,574 |
Deferred tax assets: | |||
Net operating loss carryforwards | 39,372 | 37,278 | |
Research and development credits | 2,230 | 2,014 | |
Depreciation | 36 | 31 | |
Accruals and reserves | 5,035 | 3,706 | |
Intangibles | 5,732 | 7,058 | |
Gross deferred tax assets | 52,405 | 50,087 | |
Less valuation allowance | -52,405 | -50,087 | |
Federal | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | 101,172 | ||
California | |||
Operating loss carryforwards | |||
Net operating loss carryforwards | $91,474 |
Income_Taxes_Details_2
Income Taxes (Details 2) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at beginning of the period | $671 | $594 |
Additions based on tax positions taken in the current year | 61 | 77 |
Balance at end of the period | 732 | 671 |
Interest expense or penalties related to unrecognized tax benefits | 0 | |
Research and development | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Balance at end of the period | 732 | |
Research and development | Federal | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Tax credit carryforwards | 1,799 | |
Research and development | California | ||
Reconciliation of the beginning and ending amount of unrecognized tax benefits | ||
Tax credit carryforwards | $1,762 |
Stockholders_Equity_Deficit_De
Stockholders' Equity (Deficit) (Details) (USD $) | 12 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2013 | Dec. 31, 2012 | Nov. 03, 2014 | Dec. 31, 2014 |
item | ||||
Stockholders' Equity (Deficit) | ||||
Number of series in convertible preferred stock | 3 | |||
Stock other disclosures | ||||
Shares authorized | 210,000,000 | |||
Common stock, shares authorized | 30,200,000 | 200,000,000 | 200,000,000 | |
Common stock, par value (in dollars per share) | $0.01 | 0.01 | $0.01 | |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 | ||
Preferred stock, par value (in dollars per share) | 0.01 | $0.01 | ||
Preferred stock, shares issued | 0 | |||
Preferred stock, shares outstanding | 0 | |||
Convertible preferred stock, par value (in dollars per share) | $0.01 | |||
Shares authorized | 24,593,087 | |||
Outstanding (in shares) | 24,593,087 | 0 | ||
Proceeds net of issuance costs | $64,553 | |||
Liquidation value | 151,000 | |||
Common stock | ||||
Stock other disclosures | ||||
Shares issued on conversion of Series A, Series B and Series C preferred stock | 8,942,925 | |||
Convertible preferred stock | ||||
Stock other disclosures | ||||
Conversion rate | 2.75 | |||
Shares authorized | 24,593,087 | |||
Outstanding (in shares) | 24,593,087 | |||
Proceeds net of issuance costs | 150,456 | |||
Liquidation value | 151,000 | |||
Conversion Rights | ||||
Minimum percentage of the then outstanding shares of the convertible preferred stock under affirmative election event, as the threshold trigger of the automatic conversion of the convertible preferred stock | 65.00% | |||
Minimum percentage of the then outstanding shares of the convertible preferred stock under consent of holders event, as the threshold trigger of the automatic conversion of the convertible preferred stock | 65.00% | |||
Minimum percentage of the then outstanding shares of the convertible preferred stock under consent of holders event, including the consent of all stockholders holding in excess of 19% of the then outstanding shares of the preferred stock, as the threshold trigger of the automatic conversion of the convertible preferred stock | 65.00% | |||
Minimum percentage of the then outstanding shares of the preferred stock under consent of holders event, as the threshold trigger of the automatic conversion of the convertible preferred stock | 19.00% | |||
Series A preferred stock | ||||
Stock other disclosures | ||||
Shares authorized | 1,000,000 | |||
Outstanding (in shares) | 1,000,000 | |||
Proceeds net of issuance costs | 994 | |||
Liquidation value | 1,000 | |||
Liquidation preference (in dollars per share) | $1 | |||
Conversion Rights | ||||
Initial conversion price (in dollars per share) | $2.75 | |||
Series B preferred stock | ||||
Stock other disclosures | ||||
Shares authorized | 11,409,397 | |||
Outstanding (in shares) | 11,409,397 | |||
Proceeds net of issuance costs | 84,909 | |||
Liquidation value | 85,000 | |||
Liquidation preference (in dollars per share) | $7.45 | |||
Conversion Rights | ||||
Initial conversion price (in dollars per share) | $20.49 | |||
Series C preferred stock | ||||
Stock other disclosures | ||||
Shares authorized | 12,183,690 | |||
Outstanding (in shares) | 12,183,690 | |||
Proceeds net of issuance costs | 64,553 | |||
Liquidation value | 65,000 | |||
Liquidation preference (in dollars per share) | $5.34 | |||
Conversion Rights | ||||
Initial conversion price (in dollars per share) | $14.67 | |||
Common stock price, as minimum percentage of purchase price of convertible preferred stock, as the threshold trigger of the automatic conversion of the convertible preferred stock | 200.00% | |||
Minimum amount of proceeds raised from public offering, as the threshold trigger of the automatic conversion of the convertible preferred stock | $35,000 |
Stockholders_Equity_Deficit_De1
Stockholders' Equity (Deficit) (Details 2) (USD $) | 12 Months Ended | 1 Months Ended | 0 Months Ended | ||
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Apr. 30, 2007 | Nov. 03, 2014 |
Additional information | |||||
Tax effected amount of gross unrealized net operating loss carryforwards | $39,372 | $37,278 | |||
Stock options | |||||
Number of options | |||||
Balance at the beginning of period (in shares) | 1,422,315 | 1,409,047 | |||
Options granted (in shares) | 266,069 | 26,356 | |||
Options exercised (in shares) | -12,900 | -3,025 | |||
Options forfeited (in shares) | -20,578 | -10,063 | |||
Balance at the end of the period (in shares) | 1,654,906 | 1,422,315 | 1,409,047 | ||
Number of options vested and expected to vest (in shares) | 1,654,906 | ||||
Number of options vested and exercisable (in shares) | 1,245,505 | ||||
Weighted average exercise price | |||||
Balance at the beginning of period (in dollars per share) | $2.67 | $2.67 | |||
Options granted (in dollars per share) | $12.72 | $3.80 | |||
Options exercised (in dollars per share) | $2.99 | $3.41 | |||
Options forfeited (in dollars per share) | $5.55 | $3.93 | |||
Balance at the end of period (in dollars per share) | $4.25 | $2.67 | $2.67 | ||
Weighted average exercise price, vested and expected to vest (in dollars per share) | $4.25 | ||||
Weighted average exercise price, vested and exercisable (in dollars per share) | $2.54 | ||||
Weighted average remaining contractual term | 5 years 5 months 23 days | 5 years 9 months 4 days | |||
Weighted average remaining contractual term, vested and expected to vest | 5 years 5 months 23 days | ||||
Weighted average remaining contractual term, vested and exercisable | 4 years 5 months 1 day | ||||
Additional information | |||||
Weighted average grant date fair value (in dollars per share) | $6.82 | $1.90 | |||
Stock-based compensation expense | 560 | 342 | 357 | ||
Number of years from the date of grant after which tax benefits can be availed | 2 years | ||||
Number of years from the date of exercise after which tax benefits can be availed | 1 year | ||||
Unrecognized compensation costs (in dollars) | 1,898 | 723 | |||
Weighted average period over which unrecognized compensation costs are expected to be recognized | 2 years 10 months 2 days | ||||
Aggregate intrinsic value (in dollars) | $176 | $1 | |||
Assumptions used to estimate the fair value of stock options | |||||
Expected term (in years) | 6 years 29 days | ||||
Expected volatility, minimum (as a percent) | 52.00% | ||||
Expected volatility, maximum (as a percent) | 57.00% | ||||
Expected volatility (as a percent) | 56.00% | ||||
Risk-free interest rate, minimum (as a percent) | 1.71% | 1.00% | |||
Risk-free interest rate, maximum (as a percent) | 2.00% | 1.76% | |||
Stock options | Minimum | |||||
Assumptions used to estimate the fair value of stock options | |||||
Expected term (in years) | 5 years 9 months 7 days | ||||
Stock options | Maximum | |||||
Assumptions used to estimate the fair value of stock options | |||||
Expected term (in years) | 6 years 29 days | ||||
2007 Plan | |||||
Stockholders' Equity (Deficit) | |||||
Common stock reserved for issuance (in shares) | 1,631,922 | 1,690,448 | |||
Vesting period | 4 years | ||||
Number of shares available for future grants | 0 | ||||
2007 Plan | Minimum | |||||
Stockholders' Equity (Deficit) | |||||
Vesting percentage | 25.00% | ||||
2007 Plan | Maximum | |||||
Stockholders' Equity (Deficit) | |||||
Grant period of stock awards | 10 years | ||||
2014 Plan | |||||
Stockholders' Equity (Deficit) | |||||
Common stock reserved for issuance (in shares) | 1,027,500 | 1,027,500 | |||
Vesting period | 4 years | ||||
Number of shares available for future grants | 986,138 | ||||
Expiration period | 5 years | ||||
2014 Plan | Minimum | |||||
Stockholders' Equity (Deficit) | |||||
Vesting percentage | 25.00% | ||||
2014 Plan | Maximum | |||||
Stockholders' Equity (Deficit) | |||||
Grant period of stock awards | 10 years | ||||
Incentive stock options | Minimum | |||||
Stockholders' Equity (Deficit) | |||||
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant | 100.00% | 100.00% | |||
Incentive stock options | Minimum | Shareholder owning more than 10% voting power | |||||
Stockholders' Equity (Deficit) | |||||
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant | 110.00% | 110.00% | |||
Percentage of voting power owned by shareholder | 10.00% | 10.00% |
Stockholders_Equity_Deficit_De2
Stockholders' Equity (Deficit) (Details 3) (2014 Employee Stock Purchase Plan, USD $) | 1 Months Ended | 12 Months Ended |
In Thousands, except Share data, unless otherwise specified | Oct. 31, 2014 | Dec. 31, 2014 |
Stockholders' Equity (Deficit) | ||
Discount rate on the value of shares through payroll deductions (as a percent) | 15.00% | |
Vesting period | 27 months | |
Expiration period of each offering | 6 months | |
Rate of purchase price of stock on fair value (as a percent) | 85.00% | |
Purchases under the award | 0 | |
Number of shares available for future issuance | 255,500 | |
Stock-based compensation expense | $34 | |
Assumptions used to estimate the fair value of stock options | ||
Expected volatility, minimum (as a percent) | 43.00% | |
Expected volatility, maximum (as a percent) | 44.00% | |
Risk-free interest rate, minimum (as a percent) | 0.08% | |
Risk-free interest rate, maximum (as a percent) | 0.49% | |
Minimum | ||
Assumptions used to estimate the fair value of stock options | ||
Expected term (in years) | 7 months 17 days | |
Maximum | ||
Stockholders' Equity (Deficit) | ||
Rate of increase in the number of shares available for grant every year on outstanding common stock (as a percent) | 1.00% | |
Increase in the number of shares available for grant every year | 3,000,000 | |
Assumptions used to estimate the fair value of stock options | ||
Expected term (in years) | 2 years 1 month 21 days |
Commitments_and_Contingencies_1
Commitments and Contingencies (Details) (USD $) | 0 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | ||||||
In Thousands, unless otherwise specified | Dec. 10, 2013 | Jun. 30, 2014 | Mar. 31, 2014 | Aug. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 | Oct. 03, 2013 | Jun. 08, 2012 | Mar. 27, 2012 |
item | item | item | ||||||||
Commitments and contingencies | ||||||||||
Lease contract term | 68 months | 4 months | ||||||||
Lease renewal term | 6 months | 12 months | ||||||||
Operating Leases | ||||||||||
Rent expense | $424 | $359 | $376 | |||||||
Future minimum lease payments | ||||||||||
2015 | 500 | |||||||||
2016 | 400 | |||||||||
2017 | 403 | |||||||||
2018 | 415 | |||||||||
2019 and thereafter | 499 | |||||||||
Total | 2,217 | |||||||||
Contingencies | ||||||||||
Contingent liabilities | 0 | |||||||||
Mentor litigation | ||||||||||
Contingencies | ||||||||||
Number of lawsuits filed | 14 | 13 | ||||||||
Number of employees against which lawsuits is filed | 15 | |||||||||
Number of lawsuits dismissed | 13 | |||||||||
Settlement payments received | $2,358 | $351 |
Summary_of_Quarterly_Fincancia
Summary of Quarterly Fincancial Information (Unaudited) (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Dec. 31, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Summary of Quarterly Financial Information (Unaudited) | |||||||||||
Net sales | $12,116 | $10,670 | $11,719 | $10,228 | $9,250 | $7,981 | $9,479 | $8,461 | $44,733 | $35,171 | $10,447 |
Gross profit | 8,903 | 7,838 | 8,838 | 7,654 | 7,010 | 6,013 | 7,070 | 6,486 | 33,233 | 26,579 | 8,095 |
Net loss | ($3,197) | ($1,452) | ($209) | ($953) | ($3,075) | ($6,475) | ($5,463) | ($4,112) | ($5,811) | ($19,125) | ($23,433) |
Net loss per share: | |||||||||||
Basic and diluted | ($0.34) | ($6.94) | ($1) | ($4.59) | ($14.85) | ($31.45) | ($22.65) | ($14.85) | ($2.28) | ($82.25) | ($85.01) |
Schedule_II_Valuation_And_Qual1
Schedule II - Valuation And Qualifying Accounts (Details) (Allowance for sale returns, USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Allowance for sale returns | |||
Valuation and Qualifying Accounts | |||
Balance at beginning of period | $8,270 | $4,334 | $95 |
Additions charged to costs and expenses | 110,033 | 93,768 | 27,884 |
Deductions | -108,285 | -89,832 | -23,645 |
Balance at end of period | $10,018 | $8,270 | $4,334 |