Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 09, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2021 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-39565 | |
Entity Registrant Name | The Beauty Health Company | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 85-1908962 | |
Entity Address, Address Line One | 2165 Spring Street | |
Entity Address, City or Town | Long Beach | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 90806 | |
City Area Code | 800 | |
Local Phone Number | 603-4996 | |
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | |
Trading Symbol | SKIN | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 149,639,553 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Central Index Key | 0001818093 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 718,622 | $ 9,486 |
Accounts receivable, net of allowances for doubtful accounts of $2,677 and $2,032 at September 30, 2021 and December 31, 2020, respectively | 38,386 | 18,576 |
Prepaid expenses | 7,745 | 3,220 |
Income tax receivable | 4,947 | 4,611 |
Inventories | 28,105 | 23,202 |
Total current assets | 797,805 | 59,095 |
Property and equipment, net | 12,070 | 9,191 |
Intangible assets, net | 59,349 | 50,935 |
Goodwill | 122,865 | 98,531 |
Deferred tax assets, net | 1,028 | 270 |
Other assets | 4,758 | 4,813 |
Total assets | 997,875 | 222,835 |
Current liabilities: | ||
Accounts payable | 18,118 | 18,485 |
Accrued payroll-related expenses | 21,274 | 9,475 |
Other accrued expenses | 7,896 | 2,458 |
Income tax payable | 2,180 | 0 |
Current portion of long-term debt due to related parties | 0 | 512 |
Total current liabilities | 49,468 | 30,930 |
Other long-term liabilities | 1,755 | 1,854 |
Long-term debt due to related parties, net of current portion | 0 | 216,024 |
Deferred tax liabilities, net | 2,676 | 3,987 |
Warrant liabilities | 357,173 | 0 |
Convertible senior notes, net | 728,858 | 0 |
Total liabilities | 1,139,930 | 252,795 |
Commitments (Note 12) | ||
Stockholders’ equity (deficit) | ||
Class A Common Stock, $0.0001 par value; 320,000,000 shares authorized; 133,490,012 and 35,501,743 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively | 14 | 4 |
Preferred Stock, $0.0001 par value; 1,000,000 shares authorized; no shares issued and outstanding at September 30, 2021 and December 31, 2020 | 0 | 0 |
Additional paid-in capital | 260,908 | 13,952 |
Note receivable from stockholder | 0 | (554) |
Accumulated other comprehensive (loss) income | (1,576) | 242 |
Accumulated deficit | (401,401) | (43,604) |
Total stockholders’ deficit | (142,055) | (29,960) |
Total liabilities and stockholders’ deficit | $ 997,875 | $ 222,835 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowances for doubtful accounts | $ 2,677 | $ 2,032 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 |
Common stock, shares issued (in shares) | 133,490,012 | 35,501,743 |
Common stock, shares outstanding (in shares) | 133,490,012 | 35,501,743 |
Preferred stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Income Statement [Abstract] | ||||
Net sales | $ 68,147 | $ 34,560 | $ 182,197 | $ 81,212 |
Cost of sales | 22,072 | 13,603 | 57,131 | 37,050 |
Gross profit | 46,075 | 20,957 | 125,066 | 44,162 |
Operating expenses: | ||||
Selling and marketing | 30,451 | 10,541 | 74,530 | 34,425 |
Research and development | 1,880 | 577 | 6,320 | 2,549 |
General and administrative | 19,200 | 7,054 | 73,643 | 19,659 |
Total operating expenses | 51,531 | 18,172 | 154,493 | 56,633 |
(Loss) income from operations | (5,456) | 2,785 | (29,427) | (12,471) |
Other (income) expense: | ||||
Interest expense, net | 530 | 5,629 | 8,289 | 15,447 |
Other (income) expense, net | (24) | (23) | 4,290 | (84) |
Change in fair value of Warrant liabilities | 199,306 | 0 | 271,333 | 0 |
Change in fair value of Earn-out Shares liability | 10,575 | 0 | 47,100 | 0 |
Foreign currency loss (gain), net | 431 | (14) | 663 | 108 |
Total other expense | 210,818 | 5,592 | 331,675 | 15,471 |
Loss before provision for income taxes | (216,274) | (2,807) | (361,102) | (27,942) |
Income tax benefit | (1,129) | (593) | (3,305) | (6,260) |
Net loss | (215,145) | (2,214) | (357,797) | (21,682) |
Comprehensive loss, net of tax: | ||||
Foreign currency translation adjustments | (1,537) | 108 | (1,818) | 20 |
Comprehensive loss | $ (216,682) | $ (2,106) | $ (359,615) | $ (21,662) |
Basic loss per share (in dollars per share) | $ (1.63) | $ (0.06) | $ (4.10) | $ (0.64) |
Diluted loss per share (in dollars per share) | $ (1.63) | $ (0.06) | $ (4.10) | $ (0.64) |
Weighted-average common shares outstanding, basic (in shares) | 132,306,346 | 35,392,316 | 87,219,681 | 33,870,903 |
Weighted-average common shares outstanding, diluted (in shares) | 132,306,346 | 35,392,316 | 87,219,681 | 33,870,903 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) - USD ($) $ in Thousands | Total | Previously reported | Retroactive application of recapitalization | Legacy Common Stock | Legacy Common StockPreviously reported | Legacy Common StockRetroactive application of recapitalization | Legacy Preferred Stock | Legacy Preferred StockPreviously reported | Legacy Preferred StockRetroactive application of recapitalization | Common Stock | Common StockPreviously reported | Common StockRetroactive application of recapitalization | Additional Paid-in Capital | Additional Paid-in CapitalPreviously reported | Additional Paid-in CapitalRetroactive application of recapitalization | Note Receivable from Stockholder | Note Receivable from StockholderPreviously reported | Note Receivable from StockholderRetroactive application of recapitalization | Accumulated other Comprehensive Income (Loss) | Accumulated other Comprehensive Income (Loss)Previously reported | Accumulated other Comprehensive Income (Loss)Retroactive application of recapitalization | Accumulated Deficit | Accumulated DeficitPreviously reported | Accumulated DeficitRetroactive application of recapitalization |
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 49,205 | (49,205) | 0 | 935 | (935) | 32,136,203 | 0 | 32,136,203 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | $ (1,208) | $ (1,208) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 3 | $ 0 | $ 3 | $ 13,744 | $ 13,747 | $ (3) | $ (554) | $ (554) | $ 0 | $ 28 | $ 28 | $ 0 | $ (14,429) | $ (14,429) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Stock-based compensation | 26 | 26 | ||||||||||||||||||||||
Net loss | (9,070) | (9,070) | ||||||||||||||||||||||
Foreign currency translation adjustments | (72) | (72) | ||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2020 | 32,136,203 | |||||||||||||||||||||||
Ending balance at Mar. 31, 2020 | (10,324) | $ 3 | 13,770 | (554) | (44) | (23,499) | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2019 | 0 | 49,205 | (49,205) | 0 | 935 | (935) | 32,136,203 | 0 | 32,136,203 | |||||||||||||||
Beginning balance at Dec. 31, 2019 | (1,208) | $ (1,208) | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 3 | $ 0 | $ 3 | 13,744 | $ 13,747 | $ (3) | (554) | $ (554) | $ 0 | 28 | $ 28 | $ 0 | (14,429) | $ (14,429) | $ 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Net loss | (21,682) | |||||||||||||||||||||||
Foreign currency translation adjustments | 20 | |||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 35,618,649 | |||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | (22,543) | $ 4 | 14,069 | (554) | 48 | (36,110) | ||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2020 | 32,136,203 | |||||||||||||||||||||||
Beginning balance at Mar. 31, 2020 | (10,324) | $ 3 | 13,770 | (554) | (44) | (23,499) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Stock-based compensation | 224 | 224 | ||||||||||||||||||||||
Net loss | (10,397) | (10,397) | ||||||||||||||||||||||
Foreign currency translation adjustments | (16) | (16) | ||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2020 | 32,136,203 | |||||||||||||||||||||||
Ending balance at Jun. 30, 2020 | (20,513) | $ 3 | 13,994 | (554) | (60) | (33,896) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Issuance of Shares (in shares) | 3,482,446 | |||||||||||||||||||||||
Issuance of Shares | 0 | $ 1 | (1) | |||||||||||||||||||||
Stock-based compensation | 76 | 76 | ||||||||||||||||||||||
Net loss | (2,214) | (2,214) | ||||||||||||||||||||||
Foreign currency translation adjustments | 108 | 108 | ||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2020 | 35,618,649 | |||||||||||||||||||||||
Ending balance at Sep. 30, 2020 | (22,543) | $ 4 | 14,069 | (554) | 48 | (36,110) | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 35,501,743 | |||||||||||||||||||||||
Beginning balance at Dec. 31, 2020 | (29,960) | $ 4 | 13,952 | (554) | 242 | (43,604) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Stock-based compensation | 34 | 34 | ||||||||||||||||||||||
Net loss | (3,274) | (3,274) | ||||||||||||||||||||||
Foreign currency translation adjustments | (5) | (5) | ||||||||||||||||||||||
Ending balance (in shares) at Mar. 31, 2021 | 35,501,743 | |||||||||||||||||||||||
Ending balance at Mar. 31, 2021 | (33,205) | $ 4 | 13,986 | (554) | 237 | (46,878) | ||||||||||||||||||
Beginning balance (in shares) at Dec. 31, 2020 | 35,501,743 | |||||||||||||||||||||||
Beginning balance at Dec. 31, 2020 | (29,960) | $ 4 | 13,952 | (554) | 242 | (43,604) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Net loss | (357,797) | |||||||||||||||||||||||
Foreign currency translation adjustments | (1,818) | |||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 133,490,012 | |||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | (142,055) | $ 14 | 260,908 | 0 | (1,576) | (401,401) | ||||||||||||||||||
Beginning balance (in shares) at Mar. 31, 2021 | 35,501,743 | |||||||||||||||||||||||
Beginning balance at Mar. 31, 2021 | (33,205) | $ 4 | 13,986 | (554) | 237 | (46,878) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Reverse recapitalization transaction, net (in shares) | 89,827,310 | |||||||||||||||||||||||
Reverse recapitalization transaction, net | 183,864 | $ 9 | 183,301 | 554 | ||||||||||||||||||||
Stock issued, acquisition (in shares) | 110,726 | |||||||||||||||||||||||
Issuance of Class A Common Stock in connection with business acquisition | 1,557 | 1,557 | ||||||||||||||||||||||
Stock-based compensation | 3,508 | 3,508 | ||||||||||||||||||||||
Net loss | (139,378) | (139,378) | ||||||||||||||||||||||
Foreign currency translation adjustments | (276) | (276) | ||||||||||||||||||||||
Ending balance (in shares) at Jun. 30, 2021 | 125,439,779 | |||||||||||||||||||||||
Ending balance at Jun. 30, 2021 | 16,070 | $ 13 | 202,352 | 0 | (39) | (186,256) | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||||||
Stock issued, acquisition (in shares) | 479,373 | |||||||||||||||||||||||
Issuance of Class A Common Stock in connection with business acquisition | 7,784 | 7,784 | ||||||||||||||||||||||
Issuance of Shares (in shares) | 7,500,000 | |||||||||||||||||||||||
Issuance of Shares | $ 136,575 | $ 1 | 136,574 | |||||||||||||||||||||
Reverse recapitalization transaction, net (in shares) | 70,860 | 70,860 | ||||||||||||||||||||||
Reverse recapitalization transaction, net | $ (734) | (734) | ||||||||||||||||||||||
Purchase of capped calls related to Convertible Senior Notes | (90,150) | (90,150) | ||||||||||||||||||||||
Stock-based compensation | 5,082 | 5,082 | ||||||||||||||||||||||
Net loss | (215,145) | (215,145) | ||||||||||||||||||||||
Foreign currency translation adjustments | (1,537) | (1,537) | ||||||||||||||||||||||
Ending balance (in shares) at Sep. 30, 2021 | 133,490,012 | |||||||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ (142,055) | $ 14 | $ 260,908 | $ 0 | $ (1,576) | $ (401,401) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (357,797) | $ (21,682) |
Adjustments to reconcile net loss to net cash from operating | ||
Depreciation of property and equipment | 2,446 | 1,441 |
Amortization of capitalized software | 956 | 802 |
Provision for doubtful accounts | 758 | 1,899 |
Amortization of intangible assets | 8,384 | 8,665 |
Amortization of other assets | 99 | 99 |
Amortization of deferred financing costs | 3,005 | 1,055 |
Stock-based compensation | 8,624 | 326 |
Amortization of unfavorable lease terms | 0 | (36) |
Write-off of unfavorable lease | 0 | (384) |
(Gain) Loss on sale and disposal of assets | 0 | (23) |
In-kind interest that compounds into debt | 4,130 | 3,938 |
Deferred income taxes | (5,330) | (952) |
Fair value adjustment of Earn-out Shares liability | 47,100 | 0 |
Fair value adjustment of Warrant liabilities | 271,333 | 0 |
Debt prepayment expense | 2,014 | 0 |
Changes in operating assets and liabilities: | ||
Accounts receivables | (17,290) | 4,055 |
Prepaid expense and other current assets | (4,503) | 230 |
Income taxes receivable | (336) | (5,118) |
Inventory | (2,499) | (1,140) |
Other assets | (2,009) | (224) |
Accounts payable | (8,048) | (1,398) |
Accrued payroll and other expenses | 15,624 | (1,823) |
Other long-term liabilities | (100) | 913 |
Income taxes payable | 1,799 | (2,668) |
Net cash used in operating activities | (31,640) | (12,025) |
Cash flows used in investing activities: | ||
Cash paid for business acquisition, net of cash acquired | (22,896) | 0 |
Repayment of notes receivables from shareholders | 781 | 0 |
Capital expenditures for intangible assets | (2,229) | (108) |
Capital expenditures for property and equipment | (4,857) | (2,589) |
Net cash used in investing activities | (29,201) | (2,697) |
Cash flows from financing activities: | ||
Proceeds from issuance of convertible senior notes | 750,000 | 0 |
Purchase of capped calls related to convertible senior notes | (90,150) | 0 |
Proceeds from revolving facility | 5,000 | 6,500 |
Repayment of revolving facility | (5,000) | (15,000) |
Proceeds from term loan | 0 | 30,000 |
Payment of debt issuance costs | (21,341) | (77) |
Repayment of term loan | (225,486) | (1,329) |
Proceeds from Business Combination, net of transaction costs (See Note 3) | 357,802 | 0 |
Deferred payment for acquisition | 0 | (901) |
Net cash from financing activities | 770,825 | 19,193 |
Net increase in cash and cash equivalents | 709,984 | 4,471 |
Effect of foreign currency translation on cash | (848) | 70 |
Cash and cash equivalents, beginning of period | 9,486 | 7,307 |
Cash and cash equivalents, end of period | 718,622 | 11,848 |
Supplemental disclosures of cash flow information and non-cash investing and financing activities: | ||
Cash paid for interest | 10,249 | 10,432 |
Cash paid for income taxes | 188 | 2,399 |
Issuance of Earn-out shares | 136,575 | 0 |
Trade receivables due from seller | 6,623 | 0 |
Notes payable to seller | 2,153 | 0 |
Change in deferred tax liability due to reverse recapitalization | 90 | 0 |
Capital expenditures included in accounts payable | $ 512 | $ 739 |
Description of Business
Description of Business | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business The Beauty Health Company, formerly known as Vesper Healthcare Acquisition Corp. (the “Company” or “BeautyHealth”), was incorporated in Delaware on July 8, 2020. The Company was originally formed for the purpose of entering into a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On May 4, 2021 (the “Closing Date”), the Company consummated the previously announced business combination pursuant to that certain Agreement and Plan of Merger, dated December 8, 2020 (the “Merger Agreement”), by and among Vesper Healthcare Acquisition Corp. (“Vesper Healthcare”), Hydrate Merger Sub I, Inc. (“Merger Sub I”), Hydrate Merger Sub II, LLC (“Merger Sub II”), LCP Edge Intermediate, Inc., the indirect parent of Edge Systems LLC d/b/a The HydraFacial Company (“HydraFacial”), and LCP Edge Holdco, LLC (“LCP,” or “Former Parent,” and, in its capacity as the stockholders’ representative, the “Stockholders’ Representative”), which provided for: (a) the merger of Merger Sub I with and into HydraFacial, with HydraFacial continuing as the surviving corporation (the “First Merger”), and (b) immediately following the First Merger and as part of the same overall transaction as the First Merger, the merger of HydraFacial with and into Merger Sub II, with Merger Sub II continuing as the surviving entity (the “Second Merger” and, together with the First Merger, the “Mergers” and, together with the other transactions contemplated by the Merger Agreement, the “Business Combination”). As a result of the First Merger, the Company owns 100% of the outstanding common stock of HydraFacial and each share of common stock and preferred stock of HydraFacial has been cancelled and converted into the right to receive a portion of the consideration payable in connection with the Mergers. As a result of the Second Merger, the Company owns 100% of the outstanding interests in Merger Sub II. In connection with the closing of the Business Combination (the “Closing”), the Company owns, directly or indirectly, 100% of the stock of HydraFacial and its subsidiaries and the stockholders of HydraFacial as of immediately prior to the effective time of the First Merger (the “HydraFacial Stockholders”) hold a portion of the Company’s Class A Common Stock, par value $0.0001 per share (the “Class A Common Stock”). In connection with the Closing, the Company changed its name from “Vesper Healthcare Acquisition Corp.” to “The Beauty Health Company”. Following the Closing, on May 6, 2021, the Company’s Class A Common Stock and publicly traded warrants were listed on the Nasdaq Capital Market (“Nasdaq”) under the symbols, “SKIN” and “SKINW”, respectively. The transactions set forth in the Merger Agreement constitute a “Business Combination” as contemplated by Vesper Healthcare’s Second Amended and Restated Certificate of Incorporation. Unless the context otherwise requires, in this Quarterly Report on Form 10-Q, the “Company” refers to Vesper Healthcare Acquisition Corp. prior to the closing of the Business Combination and to the combined company and its subsidiaries following the Closing and “HydraFacial” refers to the business of LCP Edge Intermediate, Inc. and its subsidiaries prior to the Closing and the business of the combined company and its subsidiaries following the Closing. BeautyHealth is a category-creating beauty health company focused on bringing innovative products to market. The Company and its subsidiaries design, develop, manufacture, market, and sell aesthetic technologies and products. The Company’s flagship brand, HydraFacial, is a non-invasive and approachable beauty health platform and ecosystem. HydraFacial uses a unique delivery system to cleanse, extract, and hydrate with their patented hydradermabrasion technology and super serums that are made with nourishing ingredients. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of presentation and consolidation The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, the Company is treated as the “acquired” company for financial reporting purposes and HydraFacial is treated as the accounting acquirer. This determination was primarily based on the following: • the stockholders of LCP Edge Intermediate, Inc., the indirect parent of Edge Systems LLC d/b/a The HydraFacial Company as of immediately prior to the effective time of the First Merger (the “HydraFacial Stockholders”) considered in the aggregate have the largest minority interest of the voting power in the combined entity after taking into account actual redemptions; • the operations of HydraFacial prior to the acquisition comprise the only ongoing operations of the post-combination company; • senior management of HydraFacial comprises the senior management of the post-combination company; • the relative size and valuation of HydraFacial compared to the Company; and • pursuant to that certain Investor Rights Agreement, dated as of May 4, 2021, by and between the Company and HydraFacial, HydraFacial was given the right to designate certain initial members of the board of directors of the Company immediately after giving effect to the transactions contemplated by the Merger Agreement. Consideration was also given to the fact that the Company paid a purchase price consisting of a combination of cash and equity consideration and its shareholders may have a significant amount of voting power, should the Company’s public stockholders be considered in the aggregate. However, based on the aforementioned factors of management, board representation, largest minority shareholder as noted above, and the continuation of the HydraFacial business as well as its size, it was determined that accounting for the Business Combination as a reverse recapitalization was appropriate. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of HydraFacial with the acquisition being treated as the equivalent of HydraFacial issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded. In connection with the Business Combination each share of HydraFacial common stock outstanding immediately prior to the Business Combination converted into the right to receive 653.109 shares (the “Exchange Ratio”) of Class A Common Stock of the Company. The recapitalization of the number of shares of Common Stock attributable to HydraFacial is reflected retroactively to the earliest period presented based upon the Exchange Ratio and is utilized for calculating earnings per share in all prior periods presented. The interim Condensed Consolidated Financial Statements in this report on Form 10-Q are presented in accordance with GAAP and include the Company’s consolidated domestic and international subsidiaries. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. Accordingly, the interim Condensed Consolidated Financial Statements in this report on Form 10-Q and the accompanying footnotes should be read in conjunction with the audited consolidated financial statements of BeautyHealth and HydraFacial as of and for the year ended December 31, 2020 presented in the Company’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission (“SEC” or “Commission”) on July 19, 2021. Except as described elsewhere in this Note 2, there have been no material changes to the Company’s significant accounting policies as described in HydraFacial’s Consolidated Financial Statements as of and for the year ended December 31, 2020. In the opinion of management, all adjustments, of a normal recurring nature, considered necessary for a fair presentation have been included in the Condensed Consolidated Financial Statements in this report on Form 10-Q. The Company believes that the disclosures provided herein are adequate to prevent the information presented from being misleading. However, the results of operations for the three and nine months ended September 30, 2021 are not necessarily indicative of the results of operations to be expected for the full year ending December 31, 2021. Use of estimates and assumptions in preparing consolidated financial statements In preparing its consolidated financial statements in conformity with GAAP, the Company makes assumptions, estimates, and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. On an ongoing basis, the Company evaluates its estimates, including, among others, those related to revenue related reserves, allowance for doubtful accounts, the realizability of inventory, fair value measurements including common stock, warrant liabilities and earn-out shares liability valuations, useful lives of property and equipment, goodwill and finite-lived intangible assets, accounting for income taxes, stock-based compensation expense and commitments and contingencies. The Company’s estimates are based on historical experience and on its future expectations that are believed to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from its current estimates and those differences may be material. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, as amended (the “Sarbanes-Oxley Act”), reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. The Company will lose its emerging growth company status on December 31, 2021, at which point, it will qualify as a large accelerated filer based on its market capitalization as of June 30, 2021, according to Rule 12b-2 of the Exchange Act. As a result, the Company will adopt all accounting pronouncements currently deferred under the emerging growth company election according to public company standards at December 31, 2021 on the Company’s annual report on Form 10-K for the year ended December 31, 2021. The adoption dates for the new accounting pronouncements disclosed below have been presented as such. Cash and Cash Equivalents All highly liquid investments, including credit card receivables due from banks, with original maturities of 90 days or less at date of purchase, are reported at fair value and are considered to be cash equivalents. Convertible Senior Notes On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144 under the Securities Act of 1933, as amended. The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Company accounts for the Notes under Accounting Standards Codification (“ASC”) ASC 470-20 - Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity's Own Equity (“ASU 2020-06”), which the Company early adopted in the first quarter of 2021 concurrent with the issuance of the Notes. The Company records the Notes in “Long-term liabilities” at face value net of issuance costs. If any of the conditions to the convertibility of the Notes is satisfied, or the Notes become due within one year, then the Company may be required under applicable accounting standards to reclassify the carrying value of the Notes as a current, rather than a long-term, liability. Refer to Note 9 - Long-term Debt for further detail. Capped Call Transactions Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the Notes, and generally reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the capped call transactions. The Company determined that the freestanding capped call option contracts qualify as equity under the accounting guidance on indexation and equity classification, and recognized the contract by recording an entry to “Additional paid-in capital” (“APIC”) in stockholders’ equity in its Condensed Consolidated Balance Sheet. The Company also determined that the capped call option contracts meet the definition of a derivative under ASC 815 - Derivatives and Hedging (“ASC 815”), but are not required to be accounted for as a derivative as they meet the scope exception outlined in ASC 815. The capped call options are recorded in APIC and not remeasured. Issuance Costs Issuance costs related to our Notes offering were capitalized and offset against proceeds from the Notes. Issuance costs consist of legal and other costs related to the issuance of the Notes and are amortized to interest expense over the term of the Notes. Refer to Note 9 - Long-term Debt for further detail. Warrant Liabilities During October 2020, in connection with Vesper Healthcare Acquisition Corp’s initial public offering, the Company issued 15,333,333 warrants (the “Public Warrants”) to purchase shares of the Company’s common stock at $11.50 per share. Simultaneously, with the consummation of Vesper Healthcare Acquisition Corp’s initial public offering, the Company issued 9,333,333 warrants (the “Private Placement Warrants” and, together with the Public Warrants, the “Public and Private Placement Warrants”) to purchase shares of the Company’s common stock at $11.50 per share, to BLS Investor Group LLC (the “Sponsor”). All of the Public and Private Placement Warrants were outstanding as of September 30, 2021. Subsequent to September 30, 2021, the Company delivered a Notice of Redemption (the “Notice of Redemption”) calling for the redemption of all of its outstanding Public Warrants to purchase shares of the Company’s Class A Common Stock, par value $0.0001 per share. Refer to Note 18 - Subsequent Events for further detail. The Company classifies the Public and Private Placement Warrants as liabilities on its Condensed Consolidated Balance Sheets as these instruments are precluded from being indexed to our own stock given the terms allow for a settlement adjustment that does not meet the scope of the fixed-for-fixed exception in ASC 815, Derivatives and Hedging . In certain events outside of the Company’s control, the Public Warrant and Private Placement Warrant holders are entitled to receive cash while in certain scenarios the holders of the Company’s common stock are not entitled to receive cash or may receive less than 100% of any proceeds in cash, which precludes these instruments from being classified within equity pursuant to ASC 815-40. The Public and Private Placement Warrants were initially recorded at fair value on the date of the Business Combination and are subsequently adjusted to fair value at each subsequent reporting date. Changes in the fair value of these instruments are recognized within change in fair value of warrant liabilities in the Company’s Condensed Consolidated Statements of Comprehensive Loss . Earn-out Shares Liability In addition to the consideration paid at the closing of the Business Combination, the former stockholders of HydraFacial received contingent consideration in the form of an aggregate of 7.5 million shares of the Company’s Class A Common Stock (the “Earn-out Shares”) as a result of the Company’s completion of the acquisitions of four target businesses, as contemplated by the Merger Agreement, in June and July 2021 that were identified by HydraFacial. With the closing of these four distributor acquisitions in Australia, France, Germany and Mexico, the 7.5 million Earn-out Shares were earned and subsequently issued on July 15, 2021. The Company accounted for the Earn-out Shares liability as contingent consideration and recorded an Earn-out Shares liability for the Earn-out Shares in accordance with ASC 480 – Distinguishing Liabilities from Equity . The liability was included as part of the consideration transferred in the Business Combination and was recorded at its then current fair value. The Earn-out Shares liability was recorded at fair value and remeasured at the end of each reporting period, with the corresponding gain or loss recorded in the Company’s Condensed Consolidated Statements of Comprehensive Loss as a component of Other (income) expense, net. Fair Value of Financial Instruments The fair value of the Notes that are recorded at historical cost was $833 million as of September 30, 2021, and was determined using the last trade price in active markets. With the exception of the Company’s Notes, the fair value of the Company’s assets and liabilities that are recorded at historical amounts and that qualify as financial instruments under ASC 820, Fair Value Measurement , approximates the carrying amounts represented in the Company’s Condensed Consolidated Balance Sheets, primarily due to their short-term nature. Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (ASU 2018-15), which requires implementation costs incurred by customers in cloud computing arrangements (i.e. hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the non-cancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2018-15 on January 1, 2021 and the guidance did not have a material impact on its Condensed Consolidated Financial Statements. In December 2019, FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted ASU 2019-12 on January 1, 2021, which did not have a material impact on its Condensed Consolidated Financial Statements. In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The amendments eliminate two of the three accounting models that require separate accounting for convertible features of debt securities, simplify the contract settlement assessment for equity classification, require the use of the if-converted method for all convertible instruments in the diluted earnings per share calculation and expand disclosure requirements. The amendments are effective for our annual and interim reporting periods beginning after December 15, 2021, with early adoption permitted for reporting periods beginning after December 15, 2020. The guidance can be applied on a full retrospective basis to all periods presented or a modified retrospective basis with a cumulative effect adjustment to the opening balance of retained earnings during the period of adoption. The Company adopted ASU 2020-06 on January 1, 2021. There were no changes to the Company’s previously issued financial statements since the Company had no existing convertible notes prior to issuance of the Notes. With the adoption of ASU 2020-06, the Company recorded the issuance of the Notes at their face value net of issuance costs in long-term liabilities and the value of the capped call options in APIC. Accounting Pronouncements Not Yet Adopted In February 2016, FASB issued ASU 2016–02, Leases (Topic 842 ). ASU 2016–02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The Company will adopt this guidance on December 31, 2021 and expects to recognize approximately $17 million to $21 million of operating lease liabilities and related right-of-use assets on the Company’s Condensed Consolidated Balance Sheets upon adoption. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business Combinations | Business Combinations Business Combination - Reverse Recapitalization The closing of the Business Combination occurred on May 4, 2021. In connection with the Business Combination: • Certain accredited investors (the “PIPE Investors”) entered into subscription agreements (the “PIPE Subscription Agreements”) pursuant to which the PIPE Investors agreed to purchase 35,000,000 shares (the “PIPE Shares”) of the Company’s Class A Common Stock at a purchase price per share of $10.00 and an aggregate purchase price of $350,000,000 (the “PIPE Investment”). The PIPE Investment was consummated substantially concurrently with the Closing of the Business Combination. • Prior to the Business Combination, the Company issued an aggregate of 11,500,000 shares of the Company’s Class B Common Stock (the “Founder Shares”) to the Sponsor for an aggregate purchase price of $25,000 in cash. All outstanding Founder Shares were automatically converted into shares of the Company’s Class A Common Stock on a one-for-one basis at the Closing and will continue to be subject to the transfer restrictions applicable to such shares of Founder Shares. • In connection with the Closing, holders of 2,672,690 shares of the Company’s Class A Common Stock exercised their rights for the Company to redeem their respective shares for cash at an approximate price of $10.00 per share, for an aggregate of approximately $26,737,737, which was paid to such holders at Closing. • Immediately after giving effect to the Merger and the PIPE Investment, there were 125,329,053 shares of the Company’s Class A Common Stock issued and outstanding. • The aggregate gross cash consideration received by the Company in connection with the Business Combination was $783 million, which consisted of proceeds of $350 million from the PIPE Investment, plus approximately $433 million of cash from the Company’s trust account that held the proceeds from the Company’s initial public offering (the “Trust Account”). The aggregate gross cash consideration received was reduced by $368 million, which consisted of cash payments made to the former shareholders of HydraFacial, and further reduced by an additional $57 million for the payment of direct transaction costs incurred by HydraFacial and the Company which were reflected as a reduction of proceeds. The Company used the net proceeds to repay all of its outstanding indebtedness at the Closing. The remainder of the consideration paid to the HydraFacial Stockholders consisted of 35,501,743 newly issued shares of Class A Common Stock (the “Stock Consideration”). The net cash received from the Business Combination was subject to a working capital adjustment of $0.7 million. The Company also issued 70,860 shares related to the working capital adjustment. The following table reconciles the elements of the Business Combination to the Company’s Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the nine months ended September 30, 2021: (in thousands) Recapitalization Cash in, trust net of redemptions $ 433,382 Cash - PIPE 350,000 Less: Cash paid out to Former Parent (367,870) Less: transaction costs and advisory fees (56,976) Less: Cash paid out from net working capital adjustment related to acquisitions $ (734) Net Cash Received from Business Combination $ 357,802 The number of shares of Class A Common Stock issued following the consummation of the Business Combination: Number of Shares Class A common stock outstanding prior to Business Combination 46,000,000 Less: Redemption of Vesper Class A Common Stock (2,672,690) Class A common stock of Vesper 43,327,310 Founder shares (Vesper Class B Common Stock) 11,500,000 PIPE Shares 35,000,000 Business Combination and PIPE shares 89,827,310 Legacy HydraFacial shares (1) 35,501,743 Working capital adjustment Class A Common Stock issued 70,860 Total Shares of Class A Common Stock after Business Combination 125,399,913 _______________ (1) The number of Legacy HydraFacial shares was determined from the 54,358 shares of HydraFacial common stock outstanding immediately prior to the closing of the Business Combination multiplied by the Exchange Ratio of 653.109. Business Acquisitions On June 4, 2021, the Company acquired High Tech Laser, Australia Pty Ltd (“HTL”), a distributor of the Company’s products in Australia. On July 1, 2021, the Company acquired Wigmore Medical France (“Wigmore”), Ecomedic GmbH (“Ecomedic”) and Sistemas Dermatologicos Internacionales (“Sidermica”), distributors of the Company’s products in France, Germany and Mexico, respectively. Through these acquisitions, the Company plans to directly sell to the respective markets and improve services for its products. The Company applied the acquisition method of accounting and established a new basis of accounting on the dates of the respective acquisitions. The assets acquired by the Company are accordingly measured at their estimated fair values as of the acquisition date. The goodwill arising from the acquisitions consists largely of the business reputation of the acquired company in the marketplace and its assembled workforce. The goodwill is not deductible for income tax purposes. The transaction costs for the acquisitions totaled $0.8 million. The following table summarizes the consideration and estimated preliminary fair values assigned to the assets acquired and liabilities assumed at the dates of acquisition for the Wigmore, Ecomedic and Sidermica acquisitions and summarizes the HTL acquisition after measurement period adjustments. (in thousands) HTL Wigmore Ecomedic Sidermica Consideration paid: Cash, net of cash acquired $ 4,920 $ 1,757 $ 11,338 $ 4,881 Class A Common Stock issued (1) 1,557 456 6,513 815 Contingent consideration — 535 — — Trade receivables due from seller 1,027 2,336 1,679 1,581 Notes payable to seller — — 2,153 — $ 7,504 $ 5,084 $ 21,683 $ 7,277 Identifiable assets acquired and liabilities assumed Accounts receivable $ 1,110 $ 2,079 $ 15 $ 1,657 Non-compete agreement 100 72 588 100 Customer relationships 2,696 3,312 5,487 2,700 Inventory and other assets 354 341 1,262 454 Accounts payable (45) (456) (772) — Deferred tax liabilities, net (675) (842) (1,834) — Accrued and other liabilities (802) (317) (340) — Total identifiable net assets 2,738 4,189 4,406 4,911 Goodwill $ 4,766 $ 895 $ 17,277 $ 2,366 ___________ {1} Class A Common Stock issued as consideration for the acquisitions was 110,726, 28,157, 401,021 and 50,195 shares for HTL, Wigmore, Ecomedic and Sidermica, respectively. Intangible assets acquired included customer relationships and non-compete agreements. The valuation of the acquired intangible asset was estimated by performing projections of discounted cash flows, whereby revenues and costs associated with each intangible asset are forecasted to derive expected cash flow which is discounted to present value at discount rates commensurate with perceived risk. The valuation and projection process is inherently subjective and relies on significant unobservable inputs (Level 3 inputs). The weighted average amortization period of customer relationship was 5 years, while the non-compete agreements are amortized over 3 years. The Company is currently in the process of finalizing the preliminary fair value allocations, and expects this to be completed prior to December 31, 2021. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition The Company has determined that each of its products is distinct and represents a separate performance obligation. The customer can benefit from each product on its own or together with other resources that are readily available to the customer. The products are separately identifiable from other promises in the contract. Control over the Company’s products generally transfers to the customer upon shipment of the products from the Company’s warehouse facility. Therefore, revenue associated with product purchases is recognized at a point in time upon shipment to the intended customer. Disaggregated Revenue The Company generates revenue through manufacturing and selling HydraFacial and Perk Delivery Systems (collectively, the “Delivery Systems”). In conjunction with the sale of Delivery Systems, the Company also sells consumable single- and multi-use serum solutions, tips and boosters (the “Consumables”) that are used when customers provide a hydradermabrasion facial experience for their customers using a Delivery System. The Consumables are sold by the Company and are available for purchase separately from the purchase of a Delivery System. The Company’s revenue disaggregated by major product line consists of the following for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Net Sales Delivery Systems $ 36,182 $ 15,925 $ 96,798 $ 35,981 Consumables 31,965 18,635 85,399 45,231 Total net sales $ 68,147 $ 34,560 $ 182,197 $ 81,212 See Note 16 for revenue disaggregated by geographical region. |
Balance Sheet Components
Balance Sheet Components | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Balance Sheet Components | Balance Sheet Components Inventories consist of the following as of the periods indicated: (in thousands) September 30, 2021 December 31, 2020 Raw materials $ 11,693 $ 9,335 Finished goods 16,412 13,867 Total inventories $ 28,105 $ 23,202 Accrued payroll-related expenses consist of the following as of the periods indicated: (in thousands) September 30, 2021 December 31, 2020 Accrued compensation $ 10,561 $ 3,535 Accrued payroll taxes 1,218 1,388 Accrued benefits 1,881 1,132 Accrued sales commissions 7,614 3,420 Total accrued payroll-related expenses $ 21,274 $ 9,475 Other accrued expenses consist of the following as of the periods indicated: (in thousands) September 30, 2021 December 31, 2020 Sales tax payable $ 2,867 $ 1,538 Notes payable to seller (Note 3) 2,154 — Other 2,875 920 Total other accrued expenses $ 7,896 $ 2,458 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities: Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability. The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. There were no transfers of financial instruments between valuation levels during the nine months ended September 30, 2021. Fair Value Measurements on a Recurring Basis (in thousands) Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money Market Funds $ 637,989 $ — $ — $ 637,989 Liabilities Warrant Liability - Public Warrants $ 222,027 $ — $ — $ 222,027 Warrant Liability - Private Placement Warrants $ — $ 135,146 $ — $ 135,146 Money Market Funds The Company’s investment in money market funds that are classified as cash equivalents hold underlying investments with a weighted average maturity of 90 days or less and are recognized at fair value. The valuations of these securities are based on quoted prices in active markets for identical assets, when available, or pricing models whereby all significant inputs are observable or can be derived from or corroborated by observable market data. The Company reviews security pricing and assesses liquidity on a quarterly basis. As of September 30, 2021 , the Company’s U.S. portfolio had no material exposure to money market funds with a fluctuating net asset value. Warrant Liabilities The Public Warrants and Private Placement Warrants (collectively, the “Warrants”) were accounted for as liabilities in accordance with ASC 815-40 and are presented within Warrant liabilities on the Company’s Condensed Consolidated Balance Sheets. The Warrants are measured at fair value at inception and on a recurring basis, with changes in fair value presented within Change in fair value of Warrants in the Company’s Condensed Consolidated Statements of Comprehensive Loss . The Public Warrant Liability associated with the Public Warrants as of September 30, 2021 is classified as a Level 1 fair value measurement due to the use of an observable market quote in an active market. The Private Placement Warrant Liability associated with the Private Placement Warrants as of September 30, 2021 is classified as a Level 2 fair value measurement. Because the transfer of the Private Placement Warrants to anyone outside of the Sponsor of Vesper would result in the Private Placement Warrants having substantially the same terms as the Public Warrants, management determined that the fair value of each Private Placement Warrant is the same as that of a Public Warrant, with an insignificant adjustment for short-term marketability restrictions. Accordingly, the Private Warrants are classified as Level 2 financial instruments. Subsequent to September 30, 2021, the Company delivered a Notice of Redemption calling for the redemption of all of its outstanding Public Warrants to purchase shares of the Company’s Class A Common Stock, par value $0.0001 per share. Refer to Note 18 |
Property and Equipment, net
Property and Equipment, net | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, net | Property and Equipment, net Property and equipment consist of the following as of the periods indicated: (in thousands) Useful life (years) September 30, 2021 December 31, 2020 Furniture and fixtures 2-7 $ 4,305 $ 3,265 Computers and equipment 3-5 4,161 3,502 Autos and trucks 5 1,127 413 Tooling 5 1,304 1,150 Leasehold improvements Shorter of remaining lease 4,640 4,097 Total property and equipment 15,537 12,427 Less: accumulated depreciation and amortization (6,689) (4,407) Construction in progress 3,222 1,171 Property and equipment, net $ 12,070 $ 9,191 Depreciation expense was $1.0 million and $0.7 million for the three months ended September 30, 2021 and 2020, respectively. Depreciation expense was $2.4 million and $1.4 million for the nine months ended September 30, 2021 and 2020, respectively. Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Cost of sales $ 339 $ 304 $ 965 $ 384 General and administrative 689 373 1,481 1,057 Total depreciation expense $ 1,028 $ 677 $ 2,446 $ 1,441 |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of September 30, 2021 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 9,920 $ (3,273) $ 6,647 15 Non-compete agreement 834 (72) 762 3 Customer relationships 19,691 (3,543) 16,148 5-10 Developed technology 70,900 (42,835) 28,065 8 Patents 1,713 (208) 1,505 3-19 Capitalized software 8,846 (2,624) 6,222 3-5 Total intangible assets $ 111,904 $ (52,555) $ 59,349 The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2020 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 9,480 $ (2,765) $ 6,715 15 Customer relationships 6,003 (2,263) 3,740 5-10 Developed technology 70,900 (36,189) 34,711 8 Patents 1,423 (158) 1,265 4-19 Capitalized software 6,172 (1,668) 4,504 3-5 Total intangible assets $ 93,978 $ (43,043) $ 50,935 Amortization expense for the three months ended September 30, 2021 and 2020 was $3.5 million and $3.1 million, respectively. Amortization expense for the nine months ended September 30, 2021 and 2020 was $9.4 million and $9.5 million, respectively. Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Cost of sales $ 2,233 $ 2,391 $ 6,697 $ 7,740 Selling and marketing 770 — 1,193 — General and administrative 500 677 1,464 1,727 Total amortization expense $ 3,503 $ 3,068 $ 9,354 $ 9,467 The changes in the carrying value of goodwill are as follows: Nine Months Ended September 30, (in thousands) 2021 2020 Beginning balance $ 98,531 $ 98,520 Business acquisitions 25,304 — Foreign currency translation impact (970) (10) Ending balance $ 122,865 $ 98,510 |
Long-term Debt
Long-term Debt | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Long-term Debt | Long-term Debt Convertible Senior Notes On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”). The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee. Pursuant to the purchase agreement between the Company and the initial purchasers of the Notes, the Company granted the initial purchasers an option to purchase, for settlement within a period of 13 days from, and including, the date the Notes were first issued, up to an additional $100 million principal amount of Notes. The Notes issued on September 14, 2021 include the $100 million principal amount of Notes issued pursuant to the full exercise by the initial purchasers of such option. The Notes are the Company’s senior, unsecured obligations and are (i) equal in right of payment with the Company’s existing and future senior, unsecured indebtedness; (ii) senior in right of payment to the Company’s existing and future indebtedness that is expressly subordinated to the Notes; (iii) effectively subordinated to the Company’s existing and future secured indebtedness, to the extent of the value of the collateral securing that indebtedness; and (iv) structurally subordinated to all existing and future indebtedness and other liabilities, including trade payables, and (to the extent the Company is not a holder thereof) preferred equity, if any, of the Company’s subsidiaries. The Notes accrue interest at a rate of 1.25% per annum, payable semi-annually in arrears on April 1 and October 1 of each year, beginning on April 1, 2022. The Notes mature on October 1, 2026, unless earlier repurchased, redeemed or converted. Before April 1, 2026, noteholders have the right to convert their Notes only upon the occurrence of certain events. From and after April 1, 2026, noteholders may convert their Notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. The Company will settle conversions by paying or delivering, as applicable, cash, shares of its common stock or a combination of cash and shares of its common stock, at the Company’s election. The initial conversion rate is 31.4859 shares of common stock per $1,000 principal amount of Notes, which represents an initial conversion price of approximately $31.76 per share of common stock. The conversion rate and conversion price will be subject to customary adjustments upon the occurrence of certain events. In addition, if certain corporate events that constitute a “Make-Whole Fundamental Change” (as defined in the Indenture) occur, then the conversion rate will, in certain circumstances, be increased for a specified period of time. The Notes are redeemable, in whole or in part (subject to certain limitations described below), at the Company’s option at any time, and from time to time, on or after October 6, 2024, and on or before the 40th scheduled trading day immediately before the maturity date, but only if certain liquidity conditions are satisfied and the last reported sale price per share of the Company’s common stock exceeds 130% of the conversion price on (i) each of at least 20 trading days, whether or not consecutive, during the 30 consecutive trading days ending on, and including, the trading day immediately before the date the Company sends the related redemption notice; and (ii) the trading day immediately before the date the Company sends such notice. However, the Company may not redeem less than all of the outstanding notes unless at least $100.0 million aggregate principal amount of notes are outstanding and not called for redemption as of the time the Company sends the related redemption notice. The redemption price will be a cash amount equal to the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. In addition, calling any Note for redemption will constitute a Make-Whole Fundamental Change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note will be increased in certain circumstances if it is converted after it is called for redemption. If certain corporate events that constitute a “Fundamental Change” (as defined in the Indenture) occur, then, subject to a limited exception for certain cash mergers, noteholders may require the Company to repurchase their Notes at a cash repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the fundamental change repurchase date. The definition of Fundamental Change includes certain business combination transactions involving the Company and certain de-listing events with respect to the Company’s common stock. The Notes have customary provisions relating to the occurrence of “Events of Default” (as defined in the Indenture), which include the following: (i) certain payment defaults on the Notes (which, in the case of a default in the payment of interest on the Notes, will be subject to a 30-day cure period); (ii) the Company’s failure to send certain notices under the Indenture within specified periods of time; (iii) the Company’s failure to convert a Note upon the exercise of the conversion right with respect to such Note, subject to a three business-day cure period; (iv) the Company’s failure to comply with certain covenants in the Indenture relating to the Company’s ability to consolidate with or merge with or into, or sell, lease or otherwise transfer, in one transaction or a series of transactions, all or substantially all of the assets of the Company and its subsidiaries, taken as a whole, to another person; (v) a default by the Company in its other obligations or agreements under the Indenture or the Notes if such default is not cured or waived within 60 days after notice is given in accordance with the Indenture; (vi) certain defaults by the Company or any of its subsidiaries with respect to indebtedness for money borrowed of at least $45,000,000; (vii) the rendering of certain judgments against the Company or any of its significant subsidiaries for the payment of at least $45,000,000, where such judgments are not discharged or stayed within 60 days after the date on which the right to appeal has expired or on which all rights to appeal have been extinguished and (viii) certain events of bankruptcy, insolvency and reorganization involving the Company or any of its significant subsidiaries. If an Event of Default involving bankruptcy, insolvency or reorganization events with respect to the Company (and not solely with respect to a significant subsidiary of the Company) occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding will immediately become due and payable without any further action or notice by any person. If any other Event of Default occurs and is continuing, then, the Trustee, by notice to the Company, or noteholders of at least 25% of the aggregate principal amount of Notes then outstanding, by notice to the Company and the Trustee, may declare the principal amount of, and all accrued and unpaid interest on, all of the Notes then outstanding to become due and payable immediately. However, notwithstanding the foregoing, the Company may elect, at its option, that the sole remedy for an Event of Default relating to certain failures by the Company to comply with certain reporting covenants in the Indenture consists exclusively of the right of the noteholders to receive special interest on the Notes for up to 180 days at a specified rate per annum not exceeding 1.00% on the principal amount of the Notes. The Notes were issued to the initial purchasers of such Notes in transactions not involving any public offering in reliance upon Section 4(a)(2) of the Securities Act. The Notes were resold by the initial purchasers to persons whom the initial purchasers reasonably believe are “qualified institutional buyers,” as defined in, and in accordance with, Rule 144A under the Securities Act. The total amount of debt issuance costs of $21.3 million was recorded as a reduction to “Convertible senior notes, net” in the Company’s Condensed Consolidated Balance Sheets and are being amortized as interest expense over the term of the Notes using the effective interest method. During the three and nine months ended September 30, 2021, the Company recognized $0.2 million in interest expense related to the amortization of the debt issuance costs related to the Notes. There was no such expense related to the Notes in the three and nine months ended September 30, 2020. The following is a summary of the Company’s Notes as of September 30, 2021: Fair Value (in thousands) Principal Amount Unamortized Issuance Costs Net Carrying Amount Level 1.25% Convertible Notes due 2026 $ 750,000 $ 21,142 $ 728,858 $ 832,988 Level 2 The Notes are carried at face value less the unamortized debt issuance costs on the Company’s Condensed Consolidated Balance Sheets. As of September 30, 2021, the estimated fair value of the Notes was approximately $833 million. The estimated fair value of the Notes was determined based on the actual bid price of the Notes on September 30, 2021, the last business day of the period, or Level 2 Inputs. As of September 30, 2021, the remaining life of the Notes is approximately 5.0 years. Capped Call Transactions On September 9, 2021, in connection with the pricing of the offering of Notes, the Company entered into privately negotiated capped call transactions (the “Base Capped Call Transactions”) with Bank of Montreal, Credit Suisse Capital LLC, Deutsche Bank AG, London Branch, Goldman Sachs & Co. LLC, JPMorgan Chase Bank, National Association, Mizuho Markets Americas LLC and Wells Fargo Bank, National Association (the “Option Counterparties”). In addition, on September 10, 2021, in connection with the initial purchasers’ exercise of their option to purchase additional Notes, the Company entered into additional capped call transactions (the “Additional Capped Call Transactions,” and, together with the Base Capped Call Transactions, the “Capped Call Transactions”) with each of the Option Counterparties. The Capped Call Transactions cover, subject to customary anti-dilution adjustments, the aggregate number of shares of the Company’s common stock that initially underlie the Notes, and are expected generally to reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the Capped Call Transactions. The cap price of the Capped Call Transactions is initially $47.94, which represents a premium of 100% over the last reported sale price of the Company’s common stock on September 9, 2021. The cost of the Capped Call Transactions was approximately $90.2 million. The Capped Call Transactions are separate transactions, each between the Company and the applicable Option Counterparty, and are not part of the terms of the Notes and do not affect any holder’s rights under the Notes or the Indenture. Holders of the Notes will not have any rights with respect to the Capped Call Transactions. Business Combination In connection with the Closing of the Business Combination, all of HydraFacial’s existing debt under its credit facilities were repaid and its credit facilities were extinguished. T he related write-off of the deferred financing costs totaled $2.3 million and prepayment penalties totaled $2.0 million. Both are included in the Other expense (income), net on the Company’s Condensed Consolidated Statements of Comprehensive Loss. Defer red financing costs expense for the nine months ended September 30, 2021 amounted to $0.5 million for the existing debt prior to the Business Combination while issuance costs for the Notes amounted to $0.2 million . Defer |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The income tax benefit for the three months and nine months ended September 30, 2021 is $1.1 million and $3.3 million, respectively, and the income tax benefit for the three and nine months ended September 30, 2020 is $0.6 million and $6.3 million, respectively. The effective tax rate for the three and nine months ended September 30, 2021 is 0.53% and 0.92%, respectively, which is lower than the federal statutory rate of 21.0% primarily due to the increase in valuation allowance and non-deductible expenses related to stock-based compensation, transaction costs and meals and entertainment. The effective tax rate for the three and nine months ended September 30, 2020 is 21.1% and 22.4%, respectively, which is greater than the federal statutory rate of 21.0% primarily due to state taxes based on apportioned income, research and development credits, and the net operating loss carryback applied to the 2017 tax year which benefited the tax rate. The increased benefit was partially offset by decreases in the rate for foreign taxes based on local country statutory rates, increase in valuation allowance and non-deductible expenses related to stock-based compensation and meals and entertainment. The Company has established a valuation allowance against a portion of its remaining deferred tax assets because it is more likely than not that certain deferred tax assets will not be realized. In determining whether deferred tax assets are realizable, the Company considered numerous factors including historical profitability, the amount of future taxable income and the existence of taxable temporary differences that can be used to realize deferred tax assets. Additionally, the Company follows an accounting standard addressing the accounting for uncertainty in income taxes that prescribes rules for recognition, measurement and classification in the financial statements of tax positions taken or expected to be taken in a tax return. The Company has gross unrecognized tax benefits of $0.1 million for the nine months ended September 30, 2021. The Company did not have any gross unrecognized tax benefits for the three months ended September 30, 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property (“QIP”). The Company believes it will be able to obtain federal tax refunds by carrying back its net operating loss for the year ended December 31, 2020. The net operating loss will be increased due to the changes in QIP and favorable interest expense limitation changes. The anticipated impact to the effective tax rate is an income tax benefit of approximately $0.2 million for the year ended December 31, 2020. The Company estimates the net operating loss carryback will result in a federal refund of approximately $4.5 million. Additionally, the favorable interest expense limitations will reduce its 2019 federal tax payable by approximately $1.2 million. On March 11, 2021 the United States enacted the American Rescue Plan Act of 2021 (“American Rescue Plan”). The American Rescue Plan includes various income and payroll tax measures. The Company does not expect a material impact of the American Rescue Plan on the Company’s Condensed Consolidated Financial Statements and related disclosures. On December 27, 2020, the United States enacted the Consolidated Appropriations Act which extended many of the benefits of the CARES Act that were scheduled to expire. The Company does not expect a material impact of Consolidated Appropriations Act on the Company’s Condensed Consolidated Financial Statements and related disclosures. On June 29, 2020, the State of California passed Assembly Bill 85 which suspends the California net operating loss deduction for the 2020-2022 tax years and the research and development credit usage for the same period (for credit usages in excess of $5.0 million). These suspensions were considered in preparation of the year ended December 31, 2020 and three months ended September 30, 2021 of the Company’s Condensed Consolidated Financial Statements. |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Equity-Based Compensation | Equity-Based Compensation Stock-based Compensation Expense Compensation expense attributable to net stock-based compensation was $5.1 million and $8.6 million for the three and nine months ended September 30, 2021, respectively. Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Cost of sales 70 — 222 — Selling and marketing 1,064 51 1,413 116 Research and development 70 — 103 — General and administrative 3,878 25 6,886 210 Stock-based compensation expense $ 5,082 $ 76 $ 8,624 $ 326 Equity Incentive Award Plans In December 2016, HydraFacial established its 2016 Equity Incentive Award Plan (the “2016 Plan”), the purpose of which was to provide incentives to selected officers and employees, to secure and retain their services, and to strengthen their commitment to HydraFacial. The 2016 Plan provided for grants of time vesting (“Time Vesting Options”) and performance-based equity awards (“Performance Vesting Options”) to Company employees (together the “Options”). The vesting of these Options varies based on whether such Time Vesting Options or Performance Vesting Options as described in the grant agreements. During May 2020, HydraFacial canceled 1,295 of the Time Vesting Options and 4,440 of the Performance Vesting Options outstanding under the 2016 Plan and replaced these awards with 1,295 of new time vested incentive units and 4,440 of performance based incentive units for certain members of management . All of the time vesting units and performance vesting units immediately vested upon the consummation of the Business Combination. As a result of the accelerated vesting on options and performance units from the consummation of the Business Combination, the Company recognized $1.4 million in stock compensation expense. At the Company’s special meeting of stockholders held on April 29, 2021, the stockholders approved The Beauty Health Company 2021 Incentive Award Plan (the “2021 Plan”), which became effective upon the consummation of the Business Combination. The aggregate number of shares of the Company’s Class A Common Stock that may be issued pursuant to awards granted under the 2021 Plan will be the sum of (i) 14,839,640 and (ii) an annual increase on January 1 of each calendar year (commencing with January 1, 2022 and ending on and including January 1, 2031) equal to a number of shares equal to 4% of the aggregate shares outstanding as of December 31 of the immediately preceding calendar year (or such lesser number of shares as is determined by the Company’s Board of Directors), subject to adjustment by the plan administrator in the event of certain changes in our corporate structure, as described below. The maximum number of shares that may be granted with respect to incentive stock options (“ISOs”) under the 2021 Plan is equal to 7,500,000. Employee Stock Purchase Plan At the Company’s special meeting of stockholders held on April 29, 2021, the stockholders approved T he Beauty Health Company 2021 Employee Stock Purchase Plan (the “ESPP”), which became effective upon the consummation of the Business Combination. The aggregate number of shares of the Company’s Class A Common Stock that may be issued pursuant to rights granted under the ESPP will be 2,000,000. In addition, on the first day of each calendar year beginning on January 1, 2022 and ending on (and including) January 1, 2031, the number of shares available for issuance under the ESPP will be increased by a number of shares equal to the lesser of (1) one percent (1%) of the shares outstanding (on an as-converted basis) on the final day of the immediately preceding calendar year, and (2) such smaller number of shares as determined by the Company’s Board of Directors. Under the current ESPP, eligible employees can have up to 10% of their earnings withheld, up to certain maximums, to be used to purchase shares of the Company’s Class A Common Stock at certain plan-defined dates. The price of the Company’s Class A Common Stock purchased under the ESPP for the offering periods is equal to 85% of the lesser of the fair market value of a share of common stock of the Company on the beginning or the end of the offering period. As of September 30, 2021, there were no shares of the Company’s Class A Common Stock that were purchased under the current ESPP. The Company is currently going through its first offering period which ends May 19, 2022. The Company recognized an immaterial amount of compensation expense related to the ESPP for the three and nine months ended September 30, 2021. Stock Options Following the closing of the Business Combination, the Company granted stock options to certain employees. During the nine month period ended September 30, 2021, the Company granted 9,399,200 options with a weighted average exercise price of $13.90. There were no exercises and 149,000 forfeitures of stock options during the nine month period ended September 30, 2021. Restricted Stock Units On September 10, 2021, the Company granted 409,743 restricted stock units (“RSUs”) to certain employees. The RSUs granted to our employees are eligible to vest over four years, subject to continued employment on each vesting date. The grants had a fair value of $26.16 on the grant date. Performance-based restricted stock units (“PSUs”) PSUs are granted to certain executives, with respect to shares reserved under the 2021 Plan. The PSUs are subject to both a service condition and market condition. Following the end of the four-year service period for the PSUs, the recipients of PSUs who remain employed will vest in, and be issued a number of shares of the Company's Class A Common Stock, ranging from 0% to 375% of the number of PSUs granted, to be determined based upon the performance of the Company's Class A Common Stock over a three-year period. During the nine month period ended September 30, 2021, the Company granted 310,000 PSUs with a weighted-average grant date fair value of $8.25 per unit. There were no exercises and forfeitures during the nine month period ended September 30, 2021. As of September 30, 2021, all 310,000 units were outstanding. The fair value of PSU awards is recognized on a straight-line basis over their measurement period as compensation expense, and is not subject to reversal even if the market condition is not achieved. The fair value of PSUs was determined using a Monte Carlo simulation with the following assumptions: Input 2021 Grants Risk-free interest rate 0.50% - 0.65% Expected volatility of the Company’s Class A Common Stock 55.0% |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and ContingenciesFrom time to time the Company may be involved in claims, legal actions and governmental proceedings that arise from its business operations. As of September 30, 2021 and December 31, 2020, the Company was not a party to any legal proceedings or threatened legal proceedings, the adverse outcome of which, individually or in the aggregate, that it believes would have a material adverse effect on its business, financial condition or results of operations. |
Concentrations
Concentrations | 9 Months Ended |
Sep. 30, 2021 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations As of September 30, 2021, the Company had no customers that accounted for 10% or more of the Accounts receivable balance. As of December 31, 2020, the Company had one customer that accounted for 10% or more of the Accounts receivable balance. This customer accounted for 10.5%, or $1.9 million, of the Accounts receivable balance. |
Related-Party Transactions
Related-Party Transactions | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Related-Party Transactions | Related-Party Transactions Registration Rights Agreement In connection with the consummation of the Business Combination, on May 4, 2021, the Company entered into that certain Amended and Restated Registration Rights Agreement (the “Registration Rights Agreement”) with BLS Investor Group LLC and the HydraFacial Stockholders. Pursuant to the terms of the Registration Rights Agreement, (i) any outstanding share of Class A Common Stock or any other equity security (including the Private Placement Warrants and including shares of Class A Common Stock issued or issuable upon the exercise of any other equity security) of the Company held by the Sponsor or the HydraFacial Stockholders (together, the “Restricted Stockholders”) as of the date of the Registration Rights Agreement or thereafter acquired by a Restricted Stockholder (including the shares of Class A Common Stock issued upon conversion of the 11,500,000 Founder Shares that were owned by the Sponsor and converted to shares of Class A Common Stock prior in connection with the Business Combination and upon exercise of any Private Placement Warrants) and shares of Class A Common Stock issued as Earn-out Shares to the HydraFacial Stockholders and (ii) any other equity security of the Company issued or issuable with respect to any such share of Common Stock by way of a stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise will be entitled to registration rights. The Registration Rights Agreement provides that the Company will, within 60 days after the consummation of the Business Combination, file with the SEC a shelf registration statement registering the resale of the shares of Common Stock held by the Restricted Stockholders and will use its reasonable best efforts to have such registration statement declared effective as soon as practicable after the filing thereof, but in no event later than 60 days following the filing deadline. The Company filed such registration statement on July 19, 2021 and it was declared effective by the SEC on July 26, 2021. The HydraFacial Stockholders are entitled to make up to an aggregate of two demands for registration, excluding short form demands, that the Company register shares of Common Stock held by these parties. In addition, the Restricted Stockholders have certain “piggy-back” registration rights. The Company will bear the expenses incurred in connection with the filing of any registration statements filed pursuant to the terms of the Registration Rights Agreement. The Company and the Restricted Stockholders agree in the Registration Rights Agreement to provide customary indemnification in connection with any offerings of Common Stock effected pursuant to the terms of the Registration Rights Agreement. Pursuant to the Registration Rights Agreement, the Sponsor agreed to restrictions on the transfer of their securities issued in the Company’s initial public offering, which (i) in the case of the Founder Shares is one year after the completion of the Business Combination unless (A) the closing price of the Common Stock equals or exceeds $12.00 per share for 20 days out of any 30-trading-day period commencing at least 150 days following the Closing of the Business Combination or (B) the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of the Company’s stockholders having the right to exchange their shares of Common Stock for cash, securities or other property, and (ii) in the case of the Private Placement Warrants and the respective Class A Common Stock underlying the Private Placement Warrants is 30 days after the completion of the Business Combination. The Sponsor and its permitted transferees will also be required, subject to the terms and conditions in the Registration Rights Agreement, not to transfer their Private Placement Warrants (as defined in the Registration Rights Agreement) or shares of Common Stock issuable upon the exercise thereof for 30 days following the Closing. Lock-Up Agreement In connection with the consummation of the Business Combination, on May 4, 2021, the Company, the Sponsor and the HydraFacial Stockholders entered into a Lock-Up Agreement, pursuant to which the HydraFacial Stockholders agreed, subject to certain exceptions, not to sell, transfer to another or otherwise dispose of, in whole or in part, the Common Stock held by the HydraFacial Stockholders during the period commencing from the closing of the Business Combination and through the earlier of (i) the 180-day anniversary of the date of the closing of the Business Combination and (ii) the date after the closing of the Business Combination on which the Company consummates certain transactions involving a change of control of the Company Investor Rights Agreement In connection with the consummation of the Business Combination, on May 4, 2021, the Company and LCP Edge Holdco, LLC entered into that certain Investor Rights Agreement (the “Investor Rights Agreement”). Pursuant to the Investor Rights Agreement, LCP has the right to designate a number of directors for appointment or election to the Company’s board of directors as follows: (i) one director for so long as LCP holds at least 10% of the outstanding Class A Common Stock, (ii) two directors for so long as LCP holds at least 15% of the outstanding Class A Common Stock, and (iii) three directors for so long as LCP holds at least 40% of the outstanding Class A Common Stock. Pursuant to the Investor Rights Agreement, for so long as LCP holds at least 10% of the outstanding Class A Common Stock, LCP will be entitled to have at least one of its designees represented on the compensation committee and nominating committee and corporate governance committee of the Company’s board of directors. Amended and Restated Management Services Agreement HydraFacial entered into a Management Services Agreement, dated December 1, 2016 with Linden Capital Partners III LP (“Linden Capital Partners III”) and DW Management Services, L.L.C. (“DW Management Services”) pursuant to which the parties receive quarterly monitoring fees of the greater of (a) $125,000 and (b) 1.25% of Last Twelve Months EBITDA multiplied by the quotient of (x) the aggregate capital invested by the investors of DW Healthcare Partners IV (B), L.P. (“DWHP Investors”) into LCP and/or its subsidiaries as of such date, divided by (y) the sum of (i) the aggregate capital invested by the DWHP Investors into LCP and/or its subsidiaries, plus (ii) the aggregate capital invested by Linden Capital Partners III into LCP and/or its subsidiaries as of the date of payment. In addition, the management services agreement provides for other fees in relation to services that may be provided in connection with equity and/or debt financing, acquisition of any other business, company, product line or enterprise, or divestiture of any division, business, and product or material assets. The fees vary between 1% and 2% of the related transaction amount. Linden Capital Partners III also received a transaction fee upon the consummation of the Business Combination. In connection with the consummation of the Business Combination, HydraFacial and Linden Capital Partners III amended the Management Services Agreement such that Linden Capital Partners III will continue to provide advisory services to HydraFacial related to mergers and acquisitions. As consideration for such services, HydraFacial will pay a fee, equal to 1% of enterprise value of the target acquired, to Linden Capital Partners III upon the consummation of any such transaction. The Company has also agreed to reimburse Linden Capital Partners III for certain expenses in connection with such advisory services. In connection with the consummation of the Business Combination, on May 4, 2021, the Company, its subsidiary, Edge Systems LLC, and Linden Capital III LLC, the general partner of Linden Manager III LP (the “Linden Manager”) entered into an Amended and Restated Management Services Agreement pursuant to which the Linden Manager may continue to provide advisory services at the request of the Company related to mergers and acquisitions. As consideration for such services, the Company will pay a fee, equal to 1% of enterprise value of the target acquired, to the Linden Manager upon the consummation of any such transaction. The Company has also agreed to reimburse Linden Manager for certain expenses in connection with such advisory services. HydraFacial recorded approximately $0.2 million and $1.0 million of charges related to management services fees for th e nine months ended September 30, 2021 and 2020, respectively. These amounts are included in General and administrative expenses on the Company’s Consolidated Statements of Comprehensive Loss. There were immaterial amounts due to these related parties at September 30, 2021 and September 30, 2020. In relation to the consummation of the Business Combination, $21.0 million in transaction fees was paid to the Former Parent. These amounts are included in General and administrative expenses on the Company’s Condensed Consolidated Statements of Comprehensive Loss. Former Related Party Note Receivable HydraFacial issued shares to a key member of management in exchange for a note receivable with a $0.6 million face value. Interest on the note accrues at a rate of 8% and matures in December 2022. Interest receivable is presented as a component of other assets on the Company’s Condensed Consolidated Balance Sheets. As there was no intent for the issuer to pay the note within a reasonably short period of time, HydraFacial has presented the note as a deduction of stockholders’ deficit. In connection with the consummation of the Business Combination, the outstanding note receivable amount was settled . Former Long-term Debt Due to Related Parties On April 10, 2020, the Company’s existing Credit Agreement with a bank that is also a related party was amended to include a “PIK” interest component of 2% that accrues on the outstanding balances of the Term Loan and Revolver. Additionally, the Company is required to pay an early prepayment fee of 2.00% of the amount prepaid or repaid on the Term Loan prior to April 10, 2021, and 1.00% if prepaid between April 11, 2021 and April 10, 2022 . During the three months ended September 30, 2021, in connection with the consummation of the Business Combination, all outstanding debt was paid. As of September 30, 2021 , there was no amount due to related parties in connection with the Term Loan and Revolver . On April 10, 2020, HydraFacial also entered into a second credit facility with a related party to provide for borrowings of $30.0 million (the “Term A Loan”). In connection with the consummation of the Business Combination, all outstanding debt was paid. As of September 30, 2021 , there was no amount due to a related parties in connection with the Term A Loan and related PIK Interest. Related Party Leases Signal Hill Office HydraFacial leases its office in Signal Hill, California, from an entity owned by former minority stockholders of HydraFacial who are no longer active employees. Lease expense under this lease was $0.2 million and $0.3 million for the nine months ended September 30, 2021 and 2020, respectively. Miami Beach Office The Company maintains an office in Miami Beach, Florida, whereby the Company, on a monthly basis, reimburses an entity owned by the Company’s Executive Chairman that makes such office available to the Company for its employees and affiliates. Sales to Related Parties HydraFacial sells to a customer that is owned directly or indirectly by a key member of management. Sales for this related party and the outstanding accounts receivable balance are as follows for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Sales to related party $ 149 $ 90 $ 396 $ 193 (in thousands) September 30, 2021 December 31, 2020 Accounts receivable due from related party $ 395 $ 250 |
Stockholders_ Deficit
Stockholders’ Deficit | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders’ Deficit | Stockholders’ Deficit Common Stock The Company is authorized to issue 320,000,000 shares of Class A Common Stock, par value of $0.0001 per share. Holders of Class A Common Stock are entitled to one vote for each share. As of September 30, 2021 and December 31, 2020, there were 133,490,012 and 35,501,743, respectively, of Class A Common Stock issued and outstanding. The Class A Common Stock is entitled t o one vote pe r share and all shares are outstanding. The Company has not declared or paid any dividends with respect to its Class A Common Stock . In connection with the Business Combination on May 4, 2021, the Company issued 35,000,000 shares of Class A Common Stock to certain qualified institutional buyers and accredited investors that agreed to purchase such shares in connection with the Business Combination for aggregate consideration of $350 million. The Company also issued 35,501,743 shares of Class A Common Stock as partial compensation to the HydraFacial Stockholders for the Business Combination. Preferred Stock The Company is authorized to issue 1,000,000 shares of preferred stock with a par value of $0.0001 per share with such designations, voting and other rights and preferences as may be determined from time to time by the Company’s board of directors. At September 30, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company manages its business on the basis of one operating segment and one reportable segment. As a result, the chief operating decision maker, who is the Chief Executive Officer, decides how to allocate resources and assess performance, reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocates resources and evaluates financial performance. Net sales by geographic region were as follows for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Americas $ 45,046 $ 21,181 $ 118,986 $ 54,563 Asia-Pacific 10,490 5,301 31,721 9,619 Europe, the Middle East and Africa 12,611 8,078 31,490 17,030 Total net sales $ 68,147 $ 34,560 $ 182,197 $ 81,212 As of September 30, 2021 and December 31, 2020, substantially all of the Company’s property, plant and equipment was held in the United States. |
Net Loss Attributable to Common
Net Loss Attributable to Common Shareholders | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Net Loss Attributable to Common Shareholders | Net Loss Attributable to Common Shareholders Net loss attributable to common stockholders is computed by deducting both the dividend distributions declared in the period on preferred stock and the dividends accumulated for the period on cumulative preferred stock from net loss (“Basic EPS”). Diluted net loss per share (“Diluted EPS”) is computed by dividing net loss attributable to common stockholders by the total of the weighted average common stock outstanding shares outstanding during the period. Diluted EPS for the three and nine months ended September 30, 2021 and 2020, exclude the dilutive effect of stock option shares because their inclusion would be anti-dilutive for all periods. The following table sets forth the calculation of both basic and diluted net loss per share as follows for the periods indicated (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share amounts) 2021 2020 2021 2020 Basic and diluted loss per share: Net loss $ (215,145) $ (2,214) $ (357,797) $ (21,682) Shares used in computation: Weighted average common shares outstanding 132,306,346 35,392,316 87,219,681 33,870,903 Basic and diluted loss per share: $ (1.63) $ (0.06) $ (4.10) $ (0.64) The following potentially dilutive weighted average shares were not included in the calculation of the weighted average diluted shares outstanding as the effect would have been anti-dilutive for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Stock Options 8,521,900 724 5,557,267 724 RSUs and PSUs 1,175,247 — 783,498 — Public and Private Warrants 24,666,666 — 16,444,444 — Convertible Note Securities 11,807,213 — 7,871,475 — |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Warrant Redemption On October 4, 2021, the Company delivered a Notice of Redemption (the “Notice of Redemption”) calling for the redemption (the “Redemption”) of all of its outstanding public warrants (“Public Warrants”) to purchase shares of the Company’s Class A Common Stock that were issued under the Warrant Agreement, dated September 29, 2020 (the “Warrant Agreement”), by and between the Company and Continental Stock Transfer & Trust Company (“CST”), as warrant agent (“Warrant Agent”), as part of the units sold in the Company’s initial public offering, and that remain outstanding following 5:00 p.m. New York City time on November 3, 2021 (“Redemption Date”), for a redemption price of $0.10 per public warrant. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of presentation | The Business Combination was accounted for as a reverse recapitalization in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Under this method of accounting, the Company is treated as the “acquired” company for financial reporting purposes and HydraFacial is treated as the accounting acquirer. This determination was primarily based on the following: • the stockholders of LCP Edge Intermediate, Inc., the indirect parent of Edge Systems LLC d/b/a The HydraFacial Company as of immediately prior to the effective time of the First Merger (the “HydraFacial Stockholders”) considered in the aggregate have the largest minority interest of the voting power in the combined entity after taking into account actual redemptions; • the operations of HydraFacial prior to the acquisition comprise the only ongoing operations of the post-combination company; • senior management of HydraFacial comprises the senior management of the post-combination company; • the relative size and valuation of HydraFacial compared to the Company; and • pursuant to that certain Investor Rights Agreement, dated as of May 4, 2021, by and between the Company and HydraFacial, HydraFacial was given the right to designate certain initial members of the board of directors of the Company immediately after giving effect to the transactions contemplated by the Merger Agreement. Consideration was also given to the fact that the Company paid a purchase price consisting of a combination of cash and equity consideration and its shareholders may have a significant amount of voting power, should the Company’s public stockholders be considered in the aggregate. However, based on the aforementioned factors of management, board representation, largest minority shareholder as noted above, and the continuation of the HydraFacial business as well as its size, it was determined that accounting for the Business Combination as a reverse recapitalization was appropriate. Accordingly, for accounting purposes, the financial statements of the Company represent a continuation of the financial statements of HydraFacial with the acquisition being treated as the equivalent of HydraFacial issuing stock for the net assets of the Company, accompanied by a recapitalization. The net assets of the Company are stated at historical cost, with no goodwill or other intangible assets recorded. |
Consolidation | The interim Condensed Consolidated Financial Statements in this report on Form 10-Q are presented in accordance with GAAP and include the Company’s consolidated domestic and international subsidiaries. Certain information and disclosures normally included in consolidated financial statements prepared in accordance with GAAP have been condensed or omitted. |
Use of estimates and assumptions in preparing consolidated financial statements | Use of estimates and assumptions in preparing consolidated financial statements In preparing its consolidated financial statements in conformity with GAAP, the Company makes assumptions, estimates, and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the consolidated financial statements and the reported amounts of net sales and expenses during the reported periods. On an ongoing basis, the Company evaluates its estimates, including, among others, those related to revenue related reserves, allowance for doubtful accounts, the realizability of inventory, fair value measurements including common stock, warrant liabilities and earn-out shares liability valuations, useful lives of property and equipment, goodwill and finite-lived intangible assets, accounting for income taxes, stock-based compensation expense and commitments and contingencies. The Company’s estimates are based on historical experience and on its future expectations that are believed to be reasonable. The combination of these factors forms the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from its current estimates and those differences may be material. |
Cash and Cash Equivalents | Cash and Cash EquivalentsAll highly liquid investments, including credit card receivables due from banks, with original maturities of 90 days or less at date of purchase, are reported at fair value and are considered to be cash equivalents. |
Convertible Senior Notes and Issuance Costs | Convertible Senior Notes On September 14, 2021, the Company issued an aggregate of $750 million in principal amount of its 1.25% Convertible Senior Notes due 2026 (the “Notes”) in a private placement to qualified institutional buyers pursuant to Rule 144 under the Securities Act of 1933, as amended. The Notes were issued pursuant to, and are governed by, an indenture (the “Indenture”), dated as of September 14, 2021, between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Company accounts for the Notes under Accounting Standards Codification (“ASC”) ASC 470-20 - Debt with Conversion and Other Options and Derivatives and Hedging—Contracts in Entity's Own Equity Issuance Costs |
Capped Call Transactions | Capped Call Transactions Capped call transactions cover the aggregate number of shares of the Company’s common stock that will initially underlie the Notes, and generally reduce potential dilution to the Company’s common stock upon any conversion of Notes and/or offset any cash payments the Company may make in excess of the principal amount of the converted Notes, as the case may be, with such reduction and/or offset subject to a cap, based on the cap price of the capped call transactions. The Company determined that the freestanding capped call option contracts qualify as equity under the accounting guidance on indexation and equity classification, and recognized the contract by recording an entry to “Additional paid-in capital” (“APIC”) in stockholders’ equity in its Condensed Consolidated Balance Sheet. The Company also determined that the capped call option contracts meet the definition of a derivative under ASC 815 - Derivatives and Hedging (“ASC 815”), but are not required to be accounted for as a derivative as they meet the scope exception outlined in ASC 815. The capped call options are recorded in APIC and not remeasured. |
Warrant Liabilities | Warrant Liabilities During October 2020, in connection with Vesper Healthcare Acquisition Corp’s initial public offering, the Company issued 15,333,333 warrants (the “Public Warrants”) to purchase shares of the Company’s common stock at $11.50 per share. Simultaneously, with the consummation of Vesper Healthcare Acquisition Corp’s initial public offering, the Company issued 9,333,333 warrants (the “Private Placement Warrants” and, together with the Public Warrants, the “Public and Private Placement Warrants”) to purchase shares of the Company’s common stock at $11.50 per share, to BLS Investor Group LLC (the “Sponsor”). All of the Public and Private Placement Warrants were outstanding as of September 30, 2021. Subsequent to September 30, 2021, the Company delivered a Notice of Redemption (the “Notice of Redemption”) calling for the redemption of all of its outstanding Public Warrants to purchase shares of the Company’s Class A Common Stock, par value $0.0001 per share. Refer to Note 18 - Subsequent Events for further detail. The Company classifies the Public and Private Placement Warrants as liabilities on its Condensed Consolidated Balance Sheets as these instruments are precluded from being indexed to our own stock given the terms allow for a settlement adjustment that does not meet the scope of the fixed-for-fixed exception in ASC 815, Derivatives and Hedging . In certain events outside of the Company’s control, the Public Warrant and Private Placement Warrant holders are entitled to receive cash while in certain scenarios the holders of the Company’s common stock are not entitled to receive cash or may receive less than 100% of any proceeds in cash, which precludes these instruments from being classified within equity pursuant to ASC 815-40. The Public and Private Placement Warrants were initially recorded at fair value on the date of the Business Combination and are subsequently adjusted to fair value at each subsequent reporting date. Changes in the fair value of these instruments are recognized within change in fair value of warrant liabilities in the Company’s Condensed Consolidated Statements of Comprehensive Loss . |
Earn-out Shares Liability | Earn-out Shares Liability In addition to the consideration paid at the closing of the Business Combination, the former stockholders of HydraFacial received contingent consideration in the form of an aggregate of 7.5 million shares of the Company’s Class A Common Stock (the “Earn-out Shares”) as a result of the Company’s completion of the acquisitions of four target businesses, as contemplated by the Merger Agreement, in June and July 2021 that were identified by HydraFacial. With the closing of these four distributor acquisitions in Australia, France, Germany and Mexico, the 7.5 million Earn-out Shares were earned and subsequently issued on July 15, 2021. The Company accounted for the Earn-out Shares liability as contingent consideration and recorded an Earn-out Shares liability for the Earn-out Shares in accordance with ASC 480 – Distinguishing Liabilities from Equity . The liability was included as part of the consideration transferred in the Business Combination and was recorded at its then current fair value. The Earn-out Shares liability was recorded at fair value and remeasured at the end of each reporting period, with the corresponding gain or loss recorded in the Company’s Condensed Consolidated Statements of Comprehensive Loss as a component of Other (income) expense, net. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The fair value of the Notes that are recorded at historical cost was $833 million as of September 30, 2021, and was determined using the last trade price in active markets. With the exception of the Company’s Notes, the fair value of the Company’s assets and liabilities that are recorded at historical amounts and that qualify as financial instruments under ASC 820, Fair Value Measurement , approximates the carrying amounts represented in the Company’s Condensed Consolidated Balance Sheets, primarily due to their short-term nature. |
Fair Value Measurements | Fair Value Measurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: • Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. In some circumstances, the inputs used to measure fair value might be categorized within different levels of the fair value hierarchy. In those instances, the fair value measurement is categorized in its entirety in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement. |
Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements In August 2018, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement that is a Service Contract (ASU 2018-15), which requires implementation costs incurred by customers in cloud computing arrangements (i.e. hosting arrangements) to be capitalized under the same premises of authoritative guidance for internal-use software, and deferred over the non-cancellable term of the cloud computing arrangements plus any optional renewal periods that are reasonably certain to be exercised by the customer or for which the exercise is controlled by the service provider. ASU 2018-15 is effective for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2018-15 on January 1, 2021 and the guidance did not have a material impact on its Condensed Consolidated Financial Statements. In December 2019, FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”). The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The Company adopted ASU 2019-12 on January 1, 2021, which did not have a material impact on its Condensed Consolidated Financial Statements. In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) : Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”). The amendments eliminate two of the three accounting models that require separate accounting for convertible features of debt securities, simplify the contract settlement assessment for equity classification, require the use of the if-converted method for all convertible instruments in the diluted earnings per share calculation and expand disclosure requirements. The amendments are effective for our annual and interim reporting periods beginning after December 15, 2021, with early adoption permitted for reporting periods beginning after December 15, 2020. The guidance can be applied on a full retrospective basis to all periods presented or a modified retrospective basis with a cumulative effect adjustment to the opening balance of retained earnings during the period of adoption. The Company adopted ASU 2020-06 on January 1, 2021. There were no changes to the Company’s previously issued financial statements since the Company had no existing convertible notes prior to issuance of the Notes. With the adoption of ASU 2020-06, the Company recorded the issuance of the Notes at their face value net of issuance costs in long-term liabilities and the value of the capped call options in APIC. Accounting Pronouncements Not Yet Adopted In February 2016, FASB issued ASU 2016–02, Leases (Topic 842 ). ASU 2016–02 requires lessees to recognize assets and liabilities on the balance sheet for the rights and obligations created by all leases with terms of more than 12 months. The Company will adopt this guidance on December 31, 2021 and expects to recognize approximately $17 million to $21 million of operating lease liabilities and related right-of-use assets on the Company’s Condensed Consolidated Balance Sheets upon adoption. |
Business Combinations (Tables)
Business Combinations (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of reverse recapitalization | The following table reconciles the elements of the Business Combination to the Company’s Condensed Consolidated Statements of Cash Flows and the Condensed Consolidated Statements of Stockholders’ Equity (Deficit) for the nine months ended September 30, 2021: (in thousands) Recapitalization Cash in, trust net of redemptions $ 433,382 Cash - PIPE 350,000 Less: Cash paid out to Former Parent (367,870) Less: transaction costs and advisory fees (56,976) Less: Cash paid out from net working capital adjustment related to acquisitions $ (734) Net Cash Received from Business Combination $ 357,802 The number of shares of Class A Common Stock issued following the consummation of the Business Combination: Number of Shares Class A common stock outstanding prior to Business Combination 46,000,000 Less: Redemption of Vesper Class A Common Stock (2,672,690) Class A common stock of Vesper 43,327,310 Founder shares (Vesper Class B Common Stock) 11,500,000 PIPE Shares 35,000,000 Business Combination and PIPE shares 89,827,310 Legacy HydraFacial shares (1) 35,501,743 Working capital adjustment Class A Common Stock issued 70,860 Total Shares of Class A Common Stock after Business Combination 125,399,913 _______________ (1) The number of Legacy HydraFacial shares was determined from the 54,358 shares of HydraFacial common stock outstanding immediately prior to the closing of the Business Combination multiplied by the Exchange Ratio of 653.109. |
Summary of assets acquired at fair value | The following table summarizes the consideration and estimated preliminary fair values assigned to the assets acquired and liabilities assumed at the dates of acquisition for the Wigmore, Ecomedic and Sidermica acquisitions and summarizes the HTL acquisition after measurement period adjustments. (in thousands) HTL Wigmore Ecomedic Sidermica Consideration paid: Cash, net of cash acquired $ 4,920 $ 1,757 $ 11,338 $ 4,881 Class A Common Stock issued (1) 1,557 456 6,513 815 Contingent consideration — 535 — — Trade receivables due from seller 1,027 2,336 1,679 1,581 Notes payable to seller — — 2,153 — $ 7,504 $ 5,084 $ 21,683 $ 7,277 Identifiable assets acquired and liabilities assumed Accounts receivable $ 1,110 $ 2,079 $ 15 $ 1,657 Non-compete agreement 100 72 588 100 Customer relationships 2,696 3,312 5,487 2,700 Inventory and other assets 354 341 1,262 454 Accounts payable (45) (456) (772) — Deferred tax liabilities, net (675) (842) (1,834) — Accrued and other liabilities (802) (317) (340) — Total identifiable net assets 2,738 4,189 4,406 4,911 Goodwill $ 4,766 $ 895 $ 17,277 $ 2,366 {1} Class A Common Stock issued as consideration for the acquisitions was 110,726, 28,157, 401,021 and 50,195 shares for HTL, Wigmore, Ecomedic and Sidermica, respectively. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The Company’s revenue disaggregated by major product line consists of the following for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Net Sales Delivery Systems $ 36,182 $ 15,925 $ 96,798 $ 35,981 Consumables 31,965 18,635 85,399 45,231 Total net sales $ 68,147 $ 34,560 $ 182,197 $ 81,212 |
Balance Sheet Components (Table
Balance Sheet Components (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | Inventories consist of the following as of the periods indicated: (in thousands) September 30, 2021 December 31, 2020 Raw materials $ 11,693 $ 9,335 Finished goods 16,412 13,867 Total inventories $ 28,105 $ 23,202 |
Schedule of accrued payroll-related expenses | Accrued payroll-related expenses consist of the following as of the periods indicated: (in thousands) September 30, 2021 December 31, 2020 Accrued compensation $ 10,561 $ 3,535 Accrued payroll taxes 1,218 1,388 Accrued benefits 1,881 1,132 Accrued sales commissions 7,614 3,420 Total accrued payroll-related expenses $ 21,274 $ 9,475 |
Schedule of accrued expenses | Other accrued expenses consist of the following as of the periods indicated: (in thousands) September 30, 2021 December 31, 2020 Sales tax payable $ 2,867 $ 1,538 Notes payable to seller (Note 3) 2,154 — Other 2,875 920 Total other accrued expenses $ 7,896 $ 2,458 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Fair Value Disclosures [Abstract] | |
Schedule of assets and liabilities measured at fair value on recurring basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis at September 30, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value. There were no transfers of financial instruments between valuation levels during the nine months ended September 30, 2021. Fair Value Measurements on a Recurring Basis (in thousands) Level 1 Level 2 Level 3 Total Assets Cash and cash equivalents: Money Market Funds $ 637,989 $ — $ — $ 637,989 Liabilities Warrant Liability - Public Warrants $ 222,027 $ — $ — $ 222,027 Warrant Liability - Private Placement Warrants $ — $ 135,146 $ — $ 135,146 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consist of the following as of the periods indicated: (in thousands) Useful life (years) September 30, 2021 December 31, 2020 Furniture and fixtures 2-7 $ 4,305 $ 3,265 Computers and equipment 3-5 4,161 3,502 Autos and trucks 5 1,127 413 Tooling 5 1,304 1,150 Leasehold improvements Shorter of remaining lease 4,640 4,097 Total property and equipment 15,537 12,427 Less: accumulated depreciation and amortization (6,689) (4,407) Construction in progress 3,222 1,171 Property and equipment, net $ 12,070 $ 9,191 Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Cost of sales $ 339 $ 304 $ 965 $ 384 General and administrative 689 373 1,481 1,057 Total depreciation expense $ 1,028 $ 677 $ 2,446 $ 1,441 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of September 30, 2021 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 9,920 $ (3,273) $ 6,647 15 Non-compete agreement 834 (72) 762 3 Customer relationships 19,691 (3,543) 16,148 5-10 Developed technology 70,900 (42,835) 28,065 8 Patents 1,713 (208) 1,505 3-19 Capitalized software 8,846 (2,624) 6,222 3-5 Total intangible assets $ 111,904 $ (52,555) $ 59,349 The gross carrying amount and accumulated amortization of the Company’s intangible assets, net, as of December 31, 2020 were as follows: (in thousands) Gross Accumulated Net Carrying Estimated Trademarks $ 9,480 $ (2,765) $ 6,715 15 Customer relationships 6,003 (2,263) 3,740 5-10 Developed technology 70,900 (36,189) 34,711 8 Patents 1,423 (158) 1,265 4-19 Capitalized software 6,172 (1,668) 4,504 3-5 Total intangible assets $ 93,978 $ (43,043) $ 50,935 |
Schedule of intangible assets amortization expense | Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Cost of sales $ 2,233 $ 2,391 $ 6,697 $ 7,740 Selling and marketing 770 — 1,193 — General and administrative 500 677 1,464 1,727 Total amortization expense $ 3,503 $ 3,068 $ 9,354 $ 9,467 |
Schedule of goodwill | The changes in the carrying value of goodwill are as follows: Nine Months Ended September 30, (in thousands) 2021 2020 Beginning balance $ 98,531 $ 98,520 Business acquisitions 25,304 — Foreign currency translation impact (970) (10) Ending balance $ 122,865 $ 98,510 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The following is a summary of the Company’s Notes as of September 30, 2021: Fair Value (in thousands) Principal Amount Unamortized Issuance Costs Net Carrying Amount Level 1.25% Convertible Notes due 2026 $ 750,000 $ 21,142 $ 728,858 $ 832,988 Level 2 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Payment Arrangement [Abstract] | |
Summary of share based compensation | Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Cost of sales 70 — 222 — Selling and marketing 1,064 51 1,413 116 Research and development 70 — 103 — General and administrative 3,878 25 6,886 210 Stock-based compensation expense $ 5,082 $ 76 $ 8,624 $ 326 |
Summary of valuation assumptions | The fair value of PSUs was determined using a Monte Carlo simulation with the following assumptions: Input 2021 Grants Risk-free interest rate 0.50% - 0.65% Expected volatility of the Company’s Class A Common Stock 55.0% |
Related-Party Transactions (Tab
Related-Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Related Party Transactions [Abstract] | |
Schedule of related party transactions | Sales for this related party and the outstanding accounts receivable balance are as follows for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Sales to related party $ 149 $ 90 $ 396 $ 193 (in thousands) September 30, 2021 December 31, 2020 Accounts receivable due from related party $ 395 $ 250 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of net sales by geographic region | Net sales by geographic region were as follows for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, (in thousands) 2021 2020 2021 2020 Americas $ 45,046 $ 21,181 $ 118,986 $ 54,563 Asia-Pacific 10,490 5,301 31,721 9,619 Europe, the Middle East and Africa 12,611 8,078 31,490 17,030 Total net sales $ 68,147 $ 34,560 $ 182,197 $ 81,212 |
Net Loss Attributable to Comm_2
Net Loss Attributable to Common Shareholders (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | The following table sets forth the calculation of both basic and diluted net loss per share as follows for the periods indicated (in thousands, except share and per share amounts): Three Months Ended September 30, Nine Months Ended September 30, (in thousands, except share and per share amounts) 2021 2020 2021 2020 Basic and diluted loss per share: Net loss $ (215,145) $ (2,214) $ (357,797) $ (21,682) Shares used in computation: Weighted average common shares outstanding 132,306,346 35,392,316 87,219,681 33,870,903 Basic and diluted loss per share: $ (1.63) $ (0.06) $ (4.10) $ (0.64) |
Schedule of antidilutive securities excluded from earnings per share computation | The following potentially dilutive weighted average shares were not included in the calculation of the weighted average diluted shares outstanding as the effect would have been anti-dilutive for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Stock Options 8,521,900 724 5,557,267 724 RSUs and PSUs 1,175,247 — 783,498 — Public and Private Warrants 24,666,666 — 16,444,444 — Convertible Note Securities 11,807,213 — 7,871,475 — |
Description of Business (Detail
Description of Business (Details) - $ / shares | Sep. 30, 2021 | May 04, 2021 | May 03, 2021 | Dec. 31, 2020 |
Business Acquisition [Line Items] | ||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
HydraFacial | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, ownership percentage | 100.00% | |||
Hydrate Merger Sub I, Inc. | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, ownership percentage | 100.00% | |||
Hydrate Merger Sub II, LLC | ||||
Business Acquisition [Line Items] | ||||
Reverse recapitalization, ownership percentage | 100.00% |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) $ / shares in Units, $ in Thousands | Jul. 15, 2021shares | May 04, 2021shares | Jul. 31, 2021business | Dec. 31, 2021USD ($) | Sep. 30, 2021USD ($)$ / shares | Sep. 14, 2021USD ($) | May 03, 2021$ / shares | Dec. 31, 2020$ / shares | Oct. 31, 2020$ / sharesshares |
Class of Warrant or Right [Line Items] | |||||||||
Recapitalization exchange ratio (in shares) | 653.109 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Earn-out consideration (in shares) | shares | 7,500,000 | ||||||||
Number of acquisitions | business | 4 | ||||||||
Reverse recapitalization transaction, net (in shares) | shares | 7,500,000 | 89,827,310 | |||||||
Minimum | Forecast | ASU 2016-02 | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Operating lease, liability | $ 17,000 | ||||||||
Operating lease, right-of-use asset | 17,000 | ||||||||
Maximum | Forecast | ASU 2016-02 | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Operating lease, liability | 21,000 | ||||||||
Operating lease, right-of-use asset | $ 21,000 | ||||||||
Convertible debt | 1.25% Convertible Senior Notes Due 2026 | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Face amount | $ 750,000 | ||||||||
Stated interest rate | 1.25% | 1.25% | |||||||
Convertible debt | 1.25% Convertible Senior Notes Due 2026 | Level 2 | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Fair Value | $ 832,988 | ||||||||
Public Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrants issued (in shares) | shares | 15,333,333 | ||||||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 11.50 | ||||||||
Private Placement Warrants | |||||||||
Class of Warrant or Right [Line Items] | |||||||||
Warrants issued (in shares) | shares | 9,333,333 | ||||||||
Warrants, exercise price (in dollars per share) | $ / shares | $ 11.50 |
Business Combinations - Narrati
Business Combinations - Narrative (Details) | May 04, 2021USD ($)$ / sharesshares | May 03, 2021USD ($)shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2021USD ($)shares | Jul. 01, 2021USD ($) | Dec. 31, 2020shares |
Business Acquisition [Line Items] | ||||||
Consideration received on transaction | $ | $ 350,000,000 | |||||
Common stock, conversion ratio | 1 | |||||
Common stock, shares issued (in shares) | shares | 133,490,012 | 133,490,012 | 35,501,743 | |||
Common stock, shares outstanding (in shares) | shares | 125,399,913 | 54,358 | 133,490,012 | 133,490,012 | 35,501,743 | |
Gross consideration received | $ | $ 783,000,000 | |||||
Cash acquired from trust account | $ | 433,000,000 | $ 433,382,000 | ||||
Cash consideration paid to stockholders | $ | 368,000,000 | 367,870,000 | ||||
Payment of transaction costs | $ | $ 57,000,000 | $ 56,976,000 | ||||
Legacy HydraFacial shares (in shares) | shares | 35,501,743 | |||||
Increase (decrease) in working capital adjustment related to acquisitions | $ | $ (734,000) | |||||
Working capital adjustment Class A Common Stock issued (in shares) | shares | 70,860 | 70,860 | ||||
Class A Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Consideration received on transaction (in shares) | shares | 35,000,000 | |||||
Stock purchase price (in dollars per share) | $ / shares | $ 10 | |||||
Consideration received on transaction | $ | $ 350,000,000 | |||||
Stock redeemed (in shares) | shares | 2,672,690 | |||||
Stock redeemed, price (in dollars per share) | $ / shares | $ 10 | |||||
Stock redeemed, value | $ | $ 26,737,737 | |||||
Common stock, shares issued (in shares) | shares | 125,329,053 | |||||
Common stock, shares outstanding (in shares) | shares | 125,329,053 | |||||
Legacy HydraFacial shares (in shares) | shares | 35,501,743 | |||||
Class B Common Stock | ||||||
Business Acquisition [Line Items] | ||||||
Consideration received on transaction (in shares) | shares | 11,500,000 | |||||
Consideration received on transaction | $ | $ 25,000 | |||||
HTL, Wigmore, Ecomedic and Sidermica acquisitions | ||||||
Business Acquisition [Line Items] | ||||||
Transaction costs | $ | $ 800,000 | |||||
HTL, Wigmore, Ecomedic and Sidermica acquisitions | Customer relationships | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average amortization period | 5 years | |||||
HTL, Wigmore, Ecomedic and Sidermica acquisitions | Non-compete agreement | ||||||
Business Acquisition [Line Items] | ||||||
Weighted average amortization period | 3 years |
Business Combinations - Schedul
Business Combinations - Schedule of reverse recapitalization consideration (Details) - USD ($) $ in Thousands | May 04, 2021 | Sep. 30, 2021 | Sep. 30, 2020 |
Business Combination and Asset Acquisition [Abstract] | |||
Cash in, trust net of redemptions | $ 433,000 | $ 433,382 | |
Cash - PIPE | 350,000 | ||
Less: Cash paid out to Former Parent | (368,000) | (367,870) | |
Less: transaction costs and advisory fees | $ (57,000) | (56,976) | |
Less: Cash paid out from net working capital adjustment related to acquisitions | (734) | ||
Net Cash Received from Business Combination | $ 357,802 | $ 0 |
Business Combinations - Sched_2
Business Combinations - Schedule of reverse recapitalization shares issued (Details) | Jul. 15, 2021shares | May 04, 2021shares | May 03, 2021shares | Sep. 30, 2021shares | Dec. 31, 2020shares |
Reverse Recapitalization [Line Items] | |||||
Common stock, shares outstanding (in shares) | 125,399,913 | 54,358 | 133,490,012 | 35,501,743 | |
PIPE Shares | 35,000,000 | ||||
Business Combination and PIPE shares | 7,500,000 | 89,827,310 | |||
Legacy HydraFacial shares (in shares) | 35,501,743 | ||||
Working capital adjustment Class A Common Stock issued (in shares) | 70,860 | 70,860 | |||
Recapitalization exchange ratio (in shares) | 653.109 | ||||
Common shareholders | |||||
Reverse Recapitalization [Line Items] | |||||
Business combination shares (in shares) | 43,327,310 | ||||
Vesper Founders | |||||
Reverse Recapitalization [Line Items] | |||||
Business combination shares (in shares) | 11,500,000 | ||||
Vesper | |||||
Reverse Recapitalization [Line Items] | |||||
Common stock, shares outstanding (in shares) | 46,000,000 | ||||
Less: Redemption of Vesper Class A common stock (in shares) | (2,672,690) |
Business Combinations - Summary
Business Combinations - Summary of assets acquired at fair value (Details) - USD ($) $ in Thousands | Jul. 01, 2021 | Jun. 04, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Consideration paid: | ||||||
Cash, net of cash acquired | $ 22,896 | $ 0 | ||||
Identifiable assets acquired and liabilities assumed | ||||||
Goodwill | $ 122,865 | $ 98,510 | $ 98,531 | $ 98,520 | ||
HTL | ||||||
Consideration paid: | ||||||
Cash, net of cash acquired | $ 4,920 | |||||
Class A Common Stock issued | 1,557 | |||||
Contingent consideration | 0 | |||||
Trade receivables due from seller | 1,027 | |||||
Notes payable to seller | 0 | |||||
Total consideration | 7,504 | |||||
Identifiable assets acquired and liabilities assumed | ||||||
Accounts receivable | 1,110 | |||||
Inventory and other assets | 354 | |||||
Accounts payable | (45) | |||||
Deferred tax liabilities, net | (675) | |||||
Accrued and other liabilities | (802) | |||||
Total identifiable net assets | 2,738 | |||||
Goodwill | $ 4,766 | |||||
Equity consideration (in shares) | 110,726 | |||||
HTL | Customer relationships | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | $ 2,696 | |||||
HTL | Non-compete agreement | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | $ 100 | |||||
Wigmore | ||||||
Consideration paid: | ||||||
Cash, net of cash acquired | $ 1,757 | |||||
Class A Common Stock issued | 456 | |||||
Contingent consideration | 535 | |||||
Trade receivables due from seller | 2,336 | |||||
Notes payable to seller | 0 | |||||
Total consideration | 5,084 | |||||
Identifiable assets acquired and liabilities assumed | ||||||
Accounts receivable | 2,079 | |||||
Inventory and other assets | 341 | |||||
Accounts payable | (456) | |||||
Deferred tax liabilities, net | (842) | |||||
Accrued and other liabilities | (317) | |||||
Total identifiable net assets | 4,189 | |||||
Goodwill | $ 895 | |||||
Equity consideration (in shares) | 28,157 | |||||
Wigmore | Customer relationships | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | $ 3,312 | |||||
Wigmore | Non-compete agreement | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | 72 | |||||
Ecomedic | ||||||
Consideration paid: | ||||||
Cash, net of cash acquired | 11,338 | |||||
Class A Common Stock issued | 6,513 | |||||
Contingent consideration | 0 | |||||
Trade receivables due from seller | 1,679 | |||||
Notes payable to seller | 2,153 | |||||
Total consideration | 21,683 | |||||
Identifiable assets acquired and liabilities assumed | ||||||
Accounts receivable | 15 | |||||
Inventory and other assets | 1,262 | |||||
Accounts payable | (772) | |||||
Deferred tax liabilities, net | (1,834) | |||||
Accrued and other liabilities | (340) | |||||
Total identifiable net assets | 4,406 | |||||
Goodwill | $ 17,277 | |||||
Equity consideration (in shares) | 401,021 | |||||
Ecomedic | Customer relationships | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | $ 5,487 | |||||
Ecomedic | Non-compete agreement | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | 588 | |||||
Sidermica | ||||||
Consideration paid: | ||||||
Cash, net of cash acquired | 4,881 | |||||
Class A Common Stock issued | 815 | |||||
Contingent consideration | 0 | |||||
Trade receivables due from seller | 1,581 | |||||
Notes payable to seller | 0 | |||||
Total consideration | 7,277 | |||||
Identifiable assets acquired and liabilities assumed | ||||||
Accounts receivable | 1,657 | |||||
Inventory and other assets | 454 | |||||
Accounts payable | 0 | |||||
Deferred tax liabilities, net | 0 | |||||
Accrued and other liabilities | 0 | |||||
Total identifiable net assets | 4,911 | |||||
Goodwill | $ 2,366 | |||||
Equity consideration (in shares) | 50,195 | |||||
Sidermica | Customer relationships | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | $ 2,700 | |||||
Sidermica | Non-compete agreement | ||||||
Identifiable assets acquired and liabilities assumed | ||||||
Intangible assets | $ 100 |
Revenue Recognition (Details)
Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 68,147 | $ 34,560 | $ 182,197 | $ 81,212 |
Delivery Systems | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 36,182 | 15,925 | 96,798 | 35,981 |
Consumables | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 31,965 | $ 18,635 | $ 85,399 | $ 45,231 |
Balance Sheet Components - Sche
Balance Sheet Components - Schedule of inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 11,693 | $ 9,335 |
Finished goods | 16,412 | 13,867 |
Total inventories | $ 28,105 | $ 23,202 |
Balance Sheet Components - Sc_2
Balance Sheet Components - Schedule of accrued payroll-related expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Accrued compensation | $ 10,561 | $ 3,535 |
Accrued payroll taxes | 1,218 | 1,388 |
Accrued benefits | 1,881 | 1,132 |
Accrued sales commissions | 7,614 | 3,420 |
Total accrued payroll-related expenses | $ 21,274 | $ 9,475 |
Balance Sheet Components - Sc_3
Balance Sheet Components - Schedule of accrued expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Sales tax payable | $ 2,867 | $ 1,538 |
Notes payable to seller (Note 3) | 2,154 | 0 |
Other | 2,875 | 920 |
Other accrued expenses | $ 7,896 | $ 2,458 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2021 | May 03, 2021 | Dec. 31, 2020 |
Liabilities | |||
Warrant liabilities | $ 357,173 | $ 0 | |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Money Market Fund | |||
Assets | |||
Money Market Funds | $ 637,989 | ||
Public Warrants | |||
Liabilities | |||
Warrant liabilities | 222,027 | ||
Private Placement Warrants | |||
Liabilities | |||
Warrant liabilities | 135,146 | ||
Recurring | Public Warrants | |||
Liabilities | |||
Warrant liabilities | 222,027 | ||
Recurring | Private Placement Warrants | |||
Liabilities | |||
Warrant liabilities | 135,146 | ||
Level 1 | Recurring | Money Market Fund | |||
Assets | |||
Money Market Funds | 637,989 | ||
Level 1 | Recurring | Public Warrants | |||
Liabilities | |||
Warrant liabilities | 222,027 | ||
Level 1 | Recurring | Private Placement Warrants | |||
Liabilities | |||
Warrant liabilities | 0 | ||
Level 2 | Recurring | Money Market Fund | |||
Assets | |||
Money Market Funds | 0 | ||
Level 2 | Recurring | Public Warrants | |||
Liabilities | |||
Warrant liabilities | 0 | ||
Level 2 | Recurring | Private Placement Warrants | |||
Liabilities | |||
Warrant liabilities | 135,146 | ||
Level 3 | Recurring | Money Market Fund | |||
Assets | |||
Money Market Funds | 0 | ||
Level 3 | Recurring | Public Warrants | |||
Liabilities | |||
Warrant liabilities | 0 | ||
Level 3 | Recurring | Private Placement Warrants | |||
Liabilities | |||
Warrant liabilities | $ 0 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||||
Less: accumulated depreciation and amortization | $ (6,689) | $ (6,689) | $ (4,407) | ||
Property and equipment, net | 12,070 | 12,070 | 9,191 | ||
Depreciation of property and equipment | 1,028 | $ 677 | 2,446 | $ 1,441 | |
Cost of sales | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation of property and equipment | 339 | 304 | 965 | 384 | |
General and administrative | |||||
Property, Plant and Equipment [Line Items] | |||||
Depreciation of property and equipment | 689 | $ 373 | 1,481 | $ 1,057 | |
Depreciable property and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Plant and equipment, gross | 15,537 | 15,537 | 12,427 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment [Line Items] | |||||
Plant and equipment, gross | 4,305 | $ 4,305 | 3,265 | ||
Furniture and fixtures | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life (years) | 2 years | ||||
Furniture and fixtures | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life (years) | 7 years | ||||
Computers and equipment | |||||
Property, Plant and Equipment [Line Items] | |||||
Plant and equipment, gross | 4,161 | $ 4,161 | 3,502 | ||
Computers and equipment | Minimum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life (years) | 3 years | ||||
Computers and equipment | Maximum | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life (years) | 5 years | ||||
Autos and trucks | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life (years) | 5 years | ||||
Plant and equipment, gross | 1,127 | $ 1,127 | 413 | ||
Tooling | |||||
Property, Plant and Equipment [Line Items] | |||||
Useful life (years) | 5 years | ||||
Plant and equipment, gross | 1,304 | $ 1,304 | 1,150 | ||
Leasehold improvements | |||||
Property, Plant and Equipment [Line Items] | |||||
Plant and equipment, gross | 4,640 | 4,640 | 4,097 | ||
Construction in progress | |||||
Property, Plant and Equipment [Line Items] | |||||
Plant and equipment, gross | $ 3,222 | $ 3,222 | $ 1,171 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | $ 111,904 | $ 111,904 | $ 93,978 | ||
Accumulated Amortization | (52,555) | (52,555) | (43,043) | ||
Net Carrying Value | 59,349 | 59,349 | 50,935 | ||
Amortization expense | 3,503 | $ 3,068 | 9,354 | $ 9,467 | |
Cost of sales | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 2,233 | 2,391 | 6,697 | 7,740 | |
Selling and marketing | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 770 | 0 | 1,193 | 0 | |
General and administrative | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization expense | 500 | $ 677 | 1,464 | $ 1,727 | |
Trademarks | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | 9,920 | 9,920 | 9,480 | ||
Accumulated Amortization | (3,273) | (3,273) | (2,765) | ||
Net Carrying Value | 6,647 | $ 6,647 | $ 6,715 | ||
Estimated Useful Life (Years) | 15 years | 15 years | |||
Non-compete agreement | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | 834 | $ 834 | |||
Accumulated Amortization | (72) | (72) | |||
Net Carrying Value | 762 | $ 762 | |||
Estimated Useful Life (Years) | 3 years | ||||
Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | 19,691 | $ 19,691 | $ 6,003 | ||
Accumulated Amortization | (3,543) | (3,543) | (2,263) | ||
Net Carrying Value | 16,148 | $ 16,148 | $ 3,740 | ||
Customer relationships | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 5 years | 5 years | |||
Customer relationships | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 10 years | 10 years | |||
Developed technology | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | 70,900 | $ 70,900 | $ 70,900 | ||
Accumulated Amortization | (42,835) | (42,835) | (36,189) | ||
Net Carrying Value | 28,065 | $ 28,065 | $ 34,711 | ||
Estimated Useful Life (Years) | 8 years | 8 years | |||
Patents | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | 1,713 | $ 1,713 | $ 1,423 | ||
Accumulated Amortization | (208) | (208) | (158) | ||
Net Carrying Value | 1,505 | $ 1,505 | $ 1,265 | ||
Patents | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 3 years | 4 years | |||
Patents | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 19 years | 19 years | |||
Capitalized software | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Value | 8,846 | $ 8,846 | $ 6,172 | ||
Accumulated Amortization | (2,624) | (2,624) | (1,668) | ||
Net Carrying Value | $ 6,222 | $ 6,222 | $ 4,504 | ||
Capitalized software | Minimum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 3 years | 3 years | |||
Capitalized software | Maximum | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Estimated Useful Life (Years) | 5 years | 5 years |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Goodwill [Roll Forward] | ||
Beginning balance | $ 98,531 | $ 98,520 |
Business acquisitions | 25,304 | 0 |
Foreign currency translation impact | (970) | (10) |
Ending balance | $ 122,865 | $ 98,510 |
Long-term Debt - Narrative (Det
Long-term Debt - Narrative (Details) | Sep. 14, 2021USD ($)segment$ / shares | Sep. 09, 2021USD ($)$ / shares | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) |
Debt Instrument [Line Items] | ||||||
Event of default, default interest rate, maximum | 1.00% | |||||
Amortization of deferred financing costs | $ 400,000 | $ 500,000 | $ 1,100,000 | |||
Cost of capped call transactions | $ 90,150,000 | |||||
Write off of deferred finance costs | 2,300,000 | |||||
Debt prepayment cost | $ 2,000,000 | |||||
Call option | ||||||
Debt Instrument [Line Items] | ||||||
Initial cap price (in dollars per share) | $ / shares | $ 47.94 | |||||
Premium over sales price | 100.00% | |||||
Cost of capped call transactions | $ 90,200,000 | |||||
1.25% Convertible Senior Notes Due 2026 | Convertible debt | ||||||
Debt Instrument [Line Items] | ||||||
Face amount | $ 750,000,000 | |||||
Stated interest rate | 1.25% | 1.25% | 1.25% | |||
Accordion feature, settlement period | 13 days | |||||
Accordion feature, increase limit | $ 100,000,000 | |||||
Conversion ratio | 0.0314859 | |||||
Conversion price (in dollars per share) | $ / shares | $ 31.76 | |||||
Convertible, threshold percentage of stock price trigger | 130.00% | |||||
Convertible, threshold trading days | segment | 20 | |||||
Convertible, threshold consecutive trading days | segment | 30 | |||||
Convertible, minimum aggregate principal outstanding | $ 100,000,000 | |||||
Event of default, cure period, interest payments | 30 days | |||||
Event of default, cure period | 60 days | |||||
Event of default, indebtedness threshold amount | $ 45,000,000 | |||||
Event of default, minimum percent of aggregate outstanding principal due | 25.00% | |||||
Event of default, default interest rate period | 180 days | |||||
Debt issuance costs | $ 21,300,000 | |||||
Amortization of deferred financing costs | $ 200,000 | $ 0 | $ 200,000 | $ 0 | ||
Debt term | 5 years | |||||
1.25% Convertible Senior Notes Due 2026 | Convertible debt | Level 2 | ||||||
Debt Instrument [Line Items] | ||||||
Convertible Senior Notes | $ 832,988,000 | $ 832,988,000 |
Long-term Debt - Schedule of lo
Long-term Debt - Schedule of long-term debt (Details) - Convertible debt - 1.25% Convertible Senior Notes Due 2026 - USD ($) $ in Thousands | Sep. 30, 2021 | Sep. 14, 2021 |
Debt Instrument [Line Items] | ||
Stated interest rate | 1.25% | 1.25% |
Principal Amount | $ 750,000 | |
Unamortized Issuance Costs | 21,142 | |
Net Carrying Value | 728,858 | |
Level 2 | ||
Debt Instrument [Line Items] | ||
Fair Value | $ 832,988 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |||||
Income tax benefit | $ 1,129,000 | $ 593,000 | $ 3,305,000 | $ 6,260,000 | |
Effective tax rate (as a percent) | 0.53% | 21.10% | 0.92% | 22.40% | |
Gross unrecognized tax benefits | $ 100,000 | $ 0 | $ 100,000 | $ 0 | |
Income tax benefit, CARES Act | 200,000 | ||||
Federal refund estimate, net operating loss carryback, CARES Act | $ 4,500,000 | ||||
Reduction of federal tax payable, change in interest expense limitation, CARES Act | $ 1,200,000 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 29, 2021 | May 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock-based compensation expense | $ 5,082 | $ 76 | $ 8,624 | $ 326 | ||
Stock options forfeited (in shares) | 149,000 | |||||
Stock compensation expense, accelerated vesting | $ 1,400 | |||||
Stock options granted (in shares) | 9,399,200 | |||||
Stock options granted, weighted-average exercise price (in dollars per share) | $ 13.90 | |||||
2021 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 14,839,640 | |||||
Increase in shares, percentage of aggregate shares outstanding | 4.00% | |||||
Stock Option, Time Vested | 2016 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options forfeited (in shares) | 1,295 | |||||
Stock Option, Performance Based | 2016 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock options forfeited (in shares) | 4,440 | |||||
Incentive Units, Time Vested | 2021 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Units granted (in shares) | 1,295 | |||||
Incentive Stock Options | 2021 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 7,500,000 | |||||
ESPP | 2021 ESPP | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of shares authorized | 2,000,000 | |||||
Increase in shares, percentage of aggregate shares outstanding | 1.00% | |||||
Maximum employee subscription rate | 10.00% | |||||
Discount from market price during offering period | 85.00% | |||||
Restricted stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 409,743 | |||||
Award vesting period | 4 years | |||||
Granted, weighted average grant date fair value (in dollars per share) | $ 26.16 | |||||
PSUs | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 310,000 | |||||
Award vesting period | 3 years | |||||
Granted, weighted average grant date fair value (in dollars per share) | $ 8.25 | |||||
Award requisite service period | 4 years | |||||
Units outstanding (in shares) | 310,000 | 310,000 | ||||
PSUs | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 0.00% | |||||
PSUs | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Award vesting rights, percentage | 375.00% | |||||
PSUs | 2021 Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Units granted (in shares) | 4,440 |
Equity Based Compensation - Sum
Equity Based Compensation - Summary of share based compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 5,082 | $ 76 | $ 8,624 | $ 326 |
Cost of sales | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 70 | 0 | 222 | 0 |
Selling and marketing | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 1,064 | 51 | 1,413 | 116 |
Research and development | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | 70 | 0 | 103 | 0 |
General and administrative | ||||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||||
Stock-based compensation expense | $ 3,878 | $ 25 | $ 6,886 | $ 210 |
Equity-Based Compensation - Sum
Equity-Based Compensation - Summary of valuation assumptions (Details) - PSUs | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected volatility of the Company’s Class A Common Stock | 55.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.50% |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Risk-free interest rate | 0.65% |
Concentrations (Details)
Concentrations (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Concentration Risk [Line Items] | |||
Accounts receivable | $ 38,386 | $ 18,576 | |
Customer Concentration Risk | Accounts receivable | Customer one | |||
Concentration Risk [Line Items] | |||
Concentration risk (as a percent) | 10.50% | ||
Accounts receivable | $ 1,900 |
Related-Party Transactions - Na
Related-Party Transactions - Narrative (Details) $ / shares in Units, $ in Thousands | May 04, 2021USD ($)tradingDay$ / sharesshares | Dec. 01, 2016USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Apr. 10, 2020USD ($) | Dec. 31, 2019USD ($) |
Related Party Transaction [Line Items] | |||||||
Stock issued upon conversion (in shares) | shares | 11,500,000 | ||||||
Reverse recapitalization, Lock-Up Agreement, lock up period | 180 days | ||||||
Payment of transaction costs | $ 57,000 | $ 56,976 | |||||
Note receivable from stockholder | 0 | $ 554 | |||||
Lease expense | 200 | $ 300 | |||||
Private Placement Warrants | |||||||
Related Party Transaction [Line Items] | |||||||
Reverse recapitalization, contingent consideration, earnout period | 30 days | ||||||
Management | |||||||
Related Party Transaction [Line Items] | |||||||
Note receivable from stockholder | $ 600 | ||||||
Note receivable from stockholder, interest rate (as a percent) | 8.00% | ||||||
Investor | Credit Agreement | Line of credit | |||||||
Related Party Transaction [Line Items] | |||||||
Interest rate, paid in kind (as a percent) | 2.00% | ||||||
Investor | Credit Agreement | Line of credit | Prepaid prior to April 10, 2021 | Secured debt | |||||||
Related Party Transaction [Line Items] | |||||||
Early prepayment fee (as a percent) | 2.00% | ||||||
Investor | Credit Agreement | Line of credit | Prepaid between April 11, 2021 and April 10, 2022 | Secured debt | |||||||
Related Party Transaction [Line Items] | |||||||
Early prepayment fee (as a percent) | 1.00% | ||||||
Investor | Term A Loan | Line of credit | Secured debt | |||||||
Related Party Transaction [Line Items] | |||||||
Face amount | $ 30,000 | ||||||
Financial and management advisory services | Affiliated entity | |||||||
Related Party Transaction [Line Items] | |||||||
Monitoring fee, quarterly amount | $ 125 | ||||||
Monitoring fee, percentage of preceding 12-month EBITDA (as a percent) | 1.25% | ||||||
Transaction rate (as a percent) | 1.00% | 1.00% | |||||
Transaction amount | 200 | $ 1,000 | |||||
Payment of transaction costs | $ 21,000 | ||||||
Financial and management advisory services | Minimum | Affiliated entity | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction rate (as a percent) | 1.00% | ||||||
Financial and management advisory services | Maximum | Affiliated entity | |||||||
Related Party Transaction [Line Items] | |||||||
Transaction rate (as a percent) | 2.00% | ||||||
LCP | |||||||
Related Party Transaction [Line Items] | |||||||
Reverse recapitalization, threshold percentage to designate one director (as a percent) | 10.00% | ||||||
Reverse recapitalization, threshold percentage to designate two directors (as a percent) | 15.00% | ||||||
Reverse recapitalization, threshold percentage to designate three directors (as a percent) | 40.00% | ||||||
Reverse recapitalization, threshold percentage to designate one director on board (as a percent) | 10.00% | ||||||
Vesper Founders | |||||||
Related Party Transaction [Line Items] | |||||||
Reverse recapitalization, contingent consideration, earnout period | 1 year | ||||||
Reverse recapitalization, contingent consideration, stock price trigger (in dollars per share) | $ / shares | $ 12 | ||||||
Reverse recapitalization, contingent consideration, threshold days | tradingDay | 20 | ||||||
Reverse recapitalization, contingent consideration, consecutive threshold days | tradingDay | 30 | ||||||
Reverse recapitalization, contingent consideration, commencement period | 150 days |
Related-Party Transactions - Sc
Related-Party Transactions - Schedule of related party transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |||||
Sales to related party | $ 149 | $ 90 | $ 396 | $ 193 | |
Accounts receivable due from related party | $ 395 | $ 395 | $ 250 |
Stockholders_ Deficit (Details)
Stockholders’ Deficit (Details) $ / shares in Units, $ in Millions | May 04, 2021USD ($)shares | Sep. 30, 2021vote$ / sharesshares | May 03, 2021$ / sharesshares | Dec. 31, 2020$ / sharesshares |
Class of Stock [Line Items] | ||||
Common stock, shares authorized (in shares) | 320,000,000 | 320,000,000 | ||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Common stock, shares issued (in shares) | 133,490,012 | 35,501,743 | ||
Common stock, shares outstanding (in shares) | 125,399,913 | 133,490,012 | 54,358 | 35,501,743 |
Common stock, number of votes | vote | 1 | |||
Consideration received on transaction | $ | $ 350 | |||
Legacy HydraFacial shares (in shares) | 35,501,743 | |||
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 | ||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares issued (in shares) | 0 | 0 | ||
Preferred stock, shares outstanding (in shares) | 0 | 0 | ||
Class A Common Stock | ||||
Class of Stock [Line Items] | ||||
Common stock, shares issued (in shares) | 125,329,053 | |||
Common stock, shares outstanding (in shares) | 125,329,053 | |||
Consideration received on transaction (in shares) | 35,000,000 | |||
Consideration received on transaction | $ | $ 350 | |||
Legacy HydraFacial shares (in shares) | 35,501,743 |
Segment Reporting (Details)
Segment Reporting (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of operating segments | segment | 1 | |||
Number of reportable segments | segment | 1 | |||
Net sales | $ 68,147 | $ 34,560 | $ 182,197 | $ 81,212 |
Americas | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 45,046 | 21,181 | 118,986 | 54,563 |
Asia-Pacific | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | 10,490 | 5,301 | 31,721 | 9,619 |
Europe, the Middle East and Africa | ||||
Disaggregation of Revenue [Line Items] | ||||
Net sales | $ 12,611 | $ 8,078 | $ 31,490 | $ 17,030 |
Net Loss Attributable to Comm_3
Net Loss Attributable to Common Shareholders - Schedule of basic and diluted earnings per share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Earnings Per Share [Abstract] | ||||||||
Net loss | $ (215,145) | $ (139,378) | $ (3,274) | $ (2,214) | $ (10,397) | $ (9,070) | $ (357,797) | $ (21,682) |
Weighted-average common shares outstanding, basic (in shares) | 132,306,346 | 35,392,316 | 87,219,681 | 33,870,903 | ||||
Weighted-average common shares outstanding, diluted (in shares) | 132,306,346 | 35,392,316 | 87,219,681 | 33,870,903 | ||||
Basic loss per share (in dollars per share) | $ (1.63) | $ (0.06) | $ (4.10) | $ (0.64) | ||||
Diluted loss per share (in dollars per share) | $ (1.63) | $ (0.06) | $ (4.10) | $ (0.64) |
Net Loss Attributable to Comm_4
Net Loss Attributable to Common Shareholders - Schedule of antidilutive securities excluded from earnings per share computation (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 8,521,900,000 | 724,000 | 5,557,267,000 | 724,000 |
Restricted stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 1,175,247 | 0 | 783,498 | 0 |
Public and Private Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 24,666,666 | 0 | 16,444,444 | 0 |
Convertible Note Securities | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities excluded (in shares) | 11,807,213 | 0 | 7,871,475 | 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Nov. 08, 2021 | May 04, 2021 | Nov. 03, 2021 | Sep. 30, 2021 | May 03, 2021 | Dec. 31, 2020 | Oct. 31, 2020 |
Subsequent Event [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Stock issued upon conversion (in shares) | 11,500,000 | ||||||
Public Warrants | |||||||
Subsequent Event [Line Items] | |||||||
Warrants, exercise price (in dollars per share) | $ 11.50 | ||||||
Subsequent event | |||||||
Subsequent Event [Line Items] | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | ||||||
Subsequent event | Public Warrants | |||||||
Subsequent Event [Line Items] | |||||||
Redemption price (in dollars per share) | $ 0.10 | ||||||
Warrants exercised, cash (in shares) | 16,123,235 | ||||||
Warrants, exercise price (in dollars per share) | $ 11.50 | ||||||
Warrants exercised, cashless basis (in shares) | 74,104 | ||||||
Stock issued upon conversion (in shares) | 26,732 | ||||||
Percent of warrants outstanding exercised | 99.50% | ||||||
Proceeds from warrant exercises | $ 185.4 |