Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Mar. 25, 2020 | Jun. 29, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | VERO | ||
Entity Registrant Name | Venus Concept Inc. | ||
Entity Central Index Key | 0001409269 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Shell Company | false | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
Entity Common Stock, Shares Outstanding | 32,194,285 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Title of 12(b) Security | Common Stock, $0.0001 par value per share | ||
Security Exchange Name | NASDAQ | ||
Entity File Number | 001-38238 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 06-1681204 | ||
Entity Address, Address Line One | 235 Yorkland Blvd. | ||
Entity Address, Address Line Two | Suite 900 | ||
Entity Address, City or Town | Toronto | ||
Entity Address, State or Province | ON | ||
Entity Address, Postal Zip Code | M2J 4Y8 | ||
City Area Code | 877 | ||
Local Phone Number | 848-8430 | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Entity Public Float | $ 26,468,409 | ||
Documents Incorporated by Reference | Documents to be Incorporated by Reference Certain information required in Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K (the "Annual Report") is incorporated by reference from our definitive Proxy Statement for our 2019 Annual Meeting of Stockholders (our "Proxy Statement") which will be filed with the Securities and Exchange Commission (the "SEC") within 120 days after the end of the fiscal year ended December 31, 2019. |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
CURRENT ASSETS: | ||
Cash and cash equivalents | $ 15,666 | $ 6,739 |
Restricted cash | 83 | 19 |
Accounts receivable, net of allowance of $10,494 and $4,408 as of December 31, 2019, and 2018 | 58,977 | 42,663 |
Inventories | 18,844 | 20,261 |
Deferred expenses | 59 | 620 |
Prepaid expenses | 2,523 | 1,148 |
Advances to suppliers | 450 | 1,732 |
Other current assets | 3,101 | 1,423 |
Total current assets | 99,703 | 74,605 |
LONG-TERM ASSETS: | ||
Long-term receivables | 35,656 | 38,201 |
Deferred tax assets | 622 | 297 |
Severance pay funds | 710 | 791 |
Property and equipment, net | 4,648 | 3,381 |
Intangible assets | 22,338 | 5,252 |
Goodwill | 27,450 | 2,603 |
Total long-term assets | 91,424 | 50,525 |
TOTAL ASSETS | 191,127 | 125,130 |
CURRENT LIABILITIES: | ||
Line of credit | 7,789 | 5,655 |
Trade payables | 9,401 | 8,625 |
Accrued expenses and other current liabilities | 21,120 | 10,880 |
Taxes payable | 2,172 | 407 |
Unearned interest income | 3,942 | 3,849 |
Warranty accrual | 1,254 | 495 |
Deferred revenues | 2,495 | 163 |
Total current liabilities | 48,173 | 30,074 |
LONG-TERM LIABILITIES: | ||
Long-term debt | 61,229 | 50,892 |
Accrued severance pay | 827 | 835 |
Deferred tax liabilities | 1,017 | 1,893 |
Unearned interest income | 1,681 | 1,752 |
Warranty accrual | 723 | 841 |
Other long-term liabilities | 799 | 2,388 |
Total long-term liabilities | 66,276 | 58,601 |
TOTAL LIABILITIES | 114,449 | 88,675 |
Commitments and Contingencies (Note 9) | ||
STOCKHOLDERS’ EQUITY (Note 1): | ||
Common Stock, $0.0001 par value: 300,000,000 shares authorized as of December 31, 2019; 28,686,116 and 4,772,956 issued and outstanding as of December 31, 2019 and 2018, respectively | 24 | 5 |
Additional paid-in capital (Note 1) | 149,840 | 67,495 |
Accumulated deficit | (75,686) | (35,067) |
TOTAL STOCKHOLDERS’ EQUITY | 74,178 | 32,433 |
Non-controlling interests | 2,500 | 4,022 |
Total equity | 76,678 | 36,455 |
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | 191,127 | 125,130 |
Series A Preferred Shares | ||
STOCKHOLDERS’ EQUITY (Note 1): | ||
Preferred shares | ||
Series B Preferred Shares | ||
STOCKHOLDERS’ EQUITY (Note 1): | ||
Preferred shares | ||
Series C Preferred Shares | ||
STOCKHOLDERS’ EQUITY (Note 1): | ||
Preferred shares | ||
Series C-1 Preferred Shares | ||
STOCKHOLDERS’ EQUITY (Note 1): | ||
Preferred shares | ||
Series D Preferred Shares | ||
STOCKHOLDERS’ EQUITY (Note 1): | ||
Preferred shares |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Accounts receivable, allowance | $ 10,494 | $ 4,408 |
Common stock, par value | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 28,686,116 | 4,772,956 |
Common stock, shares outstanding | 28,686,116 | 4,772,956 |
Series A Preferred Shares | ||
Preferred stock, par value | $ 0.0003 | $ 0.0003 |
Preferred stock, shares authorized | 1,264,565 | 1,264,565 |
Preferred stock, shares issued | 0 | 1,264,565 |
Preferred stock, shares outstanding | 0 | 1,264,565 |
Series B Preferred Shares | ||
Preferred stock, par value | $ 0.0003 | $ 0.0003 |
Preferred stock, shares authorized | 2,632,109 | 2,632,109 |
Preferred stock, shares issued | 0 | 2,632,109 |
Preferred stock, shares outstanding | 0 | 2,632,109 |
Series C Preferred Shares | ||
Preferred stock, par value | $ 0.0003 | $ 0.0003 |
Preferred stock, shares authorized | 4,615,567 | 4,615,567 |
Preferred stock, shares issued | 0 | 4,615,567 |
Preferred stock, shares outstanding | 0 | 4,615,567 |
Series C-1 Preferred Shares | ||
Preferred stock, par value | $ 0.0003 | $ 0.0003 |
Preferred stock, shares authorized | 56,983 | 56,983 |
Preferred stock, shares issued | 0 | 56,983 |
Preferred stock, shares outstanding | 0 | 56,983 |
Series D Preferred Shares | ||
Preferred stock, par value | $ 0.0003 | $ 0.0003 |
Preferred stock, shares authorized | 647,189 | 647,189 |
Preferred stock, shares issued | 0 | 647,189 |
Preferred stock, shares outstanding | 0 | 647,189 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenue | $ 110,406 | $ 102,614 |
Cost of goods sold | 33,753 | 23,259 |
Gross profit | 76,653 | 79,355 |
Operating expenses: | ||
Selling and marketing | 41,409 | 37,315 |
General and administrative | 47,497 | 27,432 |
Research and development | 8,034 | 7,047 |
Bad debt expense | 9,991 | 10,928 |
Total operating expenses | 106,931 | 82,722 |
Loss from operations | (30,278) | (3,367) |
Foreign exchange loss | 2,611 | 3,266 |
Finance expenses | 7,549 | 5,361 |
Loss before income taxes | (40,438) | (11,994) |
Income tax expense | 1,857 | 2,215 |
Net loss | (42,295) | (14,209) |
Loss attributable to stockholders of the Company | (40,619) | (14,959) |
(Loss) income attributable to non-controlling interest | (1,676) | 750 |
Net loss | $ (42,295) | $ (14,209) |
Net loss per share: | ||
Basic | $ (4.77) | $ (3.16) |
Diluted | $ (4.77) | $ (3.16) |
Weighted-average number of shares used in per share calculation: | ||
Basic | 8,517 | 4,733 |
Diluted | 8,517 | 4,733 |
Leases | ||
Revenue | $ 65,170 | $ 71,540 |
Cost of goods sold | 13,411 | 13,091 |
Products and Services | ||
Revenue | 45,236 | 31,074 |
Cost of goods sold | $ 20,342 | $ 10,168 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement Of Income And Comprehensive Income [Abstract] | ||
Net loss and comprehensive loss | $ (42,295) | $ (14,209) |
Loss attributable to stockholders of the Company | (40,619) | (14,959) |
Comprehensive (loss) income attributable to non-controlling interest | (1,676) | 750 |
Comprehensive loss | $ (42,295) | $ (14,209) |
Consolidated Statement of Stock
Consolidated Statement of Stockholders' Equity - USD ($) $ in Thousands | Total | Series A Preferred Shares | Series B Preferred Shares | Series C Preferred Shares | Series C-1 Preferred Shares | Series D Preferred Shares | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Non-controlling Interest |
Beginning balance, value at Dec. 31, 2017 | $ 42,761 | $ 5 | $ 60,048 | $ (20,108) | $ 2,816 | |||||
Beginning balance, shares at Dec. 31, 2017 | 1,264,565 | 2,632,109 | 4,615,567 | 56,983 | ||||||
Beginning balance, shares at Dec. 31, 2017 | 4,700,753 | |||||||||
Equity issuance | 6,915 | 6,915 | ||||||||
Equity issuance, shares | 647,189 | |||||||||
Net loss - the Company | (14,959) | (14,959) | ||||||||
(Loss) income attributable to non-controlling interest | 750 | 750 | ||||||||
Acquisition of non-controlling interest | (477) | (933) | 456 | |||||||
Options exercised | 208 | 208 | ||||||||
Options exercised, shares | 72,203 | |||||||||
Stock-based compensation | 1,257 | 1,257 | ||||||||
Balance — December 31, 2018 (as restated, Note 1) at Dec. 31, 2018 | 36,455 | $ 5 | 67,495 | (35,067) | 4,022 | |||||
Ending balance, shares at Dec. 31, 2018 | 1,264,565 | 2,632,109 | 4,615,567 | 56,983 | 647,189 | |||||
Ending balance, shares at Dec. 31, 2018 | 4,772,956 | |||||||||
Conversion of convertible preferred shares into common stock | (1,264,565) | (2,632,109) | (4,615,567) | (56,983) | (647,189) | 9,216,413 | ||||
Exchange of common stock in connection with the Merger | 15,709 | 15,709 | ||||||||
Exchange of common stock in connection with the Merger, shares | 2,802,466 | |||||||||
Exchange of options and warrants in connection with the Merger | 121 | 121 | ||||||||
Conversion of convertible promissory notes into common stock | 36,958 | $ 8 | 36,950 | |||||||
Conversion of convertible promissory notes into common stock, shares | 4,074,565 | |||||||||
Concurrent Financing shares and warrants, net of costs | 26,501 | $ 11 | 26,490 | |||||||
Concurrent Financing shares and warrants, net of costs, shares | 7,483,980 | |||||||||
Equity issuance | 702 | 702 | ||||||||
Equity issuance, shares | 160,000 | |||||||||
Issuance of Solar 2019 Warrants | 137 | 137 | ||||||||
Net loss - the Company | (40,619) | (40,619) | ||||||||
(Loss) income attributable to non-controlling interest | (1,676) | (1,676) | ||||||||
Acquisition of non-controlling interest | (123) | (277) | 154 | |||||||
Options exercised | $ 355 | 355 | ||||||||
Options exercised, shares | 175,736 | 175,736 | ||||||||
Stock-based compensation | $ 2,158 | 2,158 | ||||||||
Balance — December 31, 2018 (as restated, Note 1) at Dec. 31, 2019 | $ 76,678 | $ 24 | $ 149,840 | $ (75,686) | $ 2,500 | |||||
Ending balance, shares at Dec. 31, 2019 | 28,686,116 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (42,295) | $ (14,209) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 2,040 | 1,340 |
Stock-based compensation | 2,158 | 1,257 |
Bad debt expense | 9,991 | 10,928 |
Provision for inventory obsolescence | 1,439 | 470 |
Issuance of 2019 Solar warrants | 137 | |
Financing fees | 258 | 355 |
Accretion on long-term debt | 144 | 144 |
Capitalized interest on debt | 939 | |
Interest on convertible promissory notes | 599 | |
Deferred tax (benefit) expense | (1,132) | 436 |
Change in fair value of earn-out liability | 533 | |
Unrealized foreign exchange loss | (626) | |
Changes in operating assets and liabilities: | ||
Accounts receivable short- and long-term | (21,093) | (38,162) |
Inventories | 6,430 | (6,205) |
Prepaid expenses | (855) | 1,600 |
Other current assets | 523 | 484 |
Other long-term assets | (154) | |
Trade payables | (5,968) | 4,206 |
Accrued expenses and other current liabilities | 9,571 | 1,728 |
Severance payments | 81 | (10) |
Unearned interest income | 22 | 891 |
Other long-term liabilities | (1,398) | 629 |
Net cash used in operating activities | (39,595) | (33,649) |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Cash, cash equivalents and restricted cash acquired in connection with the Merger | 7,409 | |
Proceeds from sale of property and equipment | 98 | |
Purchases of property and equipment | (1,123) | (1,155) |
Acquisition of business | (7,502) | |
Net cash used in investing activities | 6,384 | (8,657) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Issuance of long-term debt, net of financing fees | 9,740 | 14,194 |
Issuance of loan to Restoration Robotics, Inc. | (4,500) | |
Drawdown of line-of-credit | 2,134 | 5,655 |
Proceeds from Concurrent Financing, net of costs of $1,564 | 26,501 | |
Issuance of convertible promissory notes | 29,050 | |
Payment under Solar loan and security agreement | (20,000) | |
Acquisition of non-controlling interest | (477) | |
Equity issuance, net of fees | 6,915 | |
Payment of earn-out liability | (828) | |
Installment payments | (250) | |
Proceeds from exercise of options | 355 | 208 |
Net cash provided by financing activities | 42,202 | 26,495 |
Effect of exchange rate changes on cash and cash equivalents | 2,375 | |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 8,991 | (13,436) |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — Beginning of year | 6,758 | 20,194 |
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH — End of year | 15,749 | 6,758 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | ||
Cash paid for income taxes | 1,087 | 524 |
Cash paid for interest | 6,166 | 4,071 |
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING INFORMATION: | ||
Issuance of shares to financial advisor | 702 | |
Conversion of convertible promissory notes into common stock | 36,958 | |
Fair value of net assets acquired in the Merger | 15,830 | |
Redemption of notes receivable as a part of purchase consideration in connection with the Merger | 4,558 | |
Acquisition of non-controlling interest | $ 123 | |
Earn-out liability | $ 1,177 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Statement Of Cash Flows [Abstract] | ||
Concurrent financing, net of costs | $ 1,564 | $ 1,564 |
Nature of Operations
Nature of Operations | 12 Months Ended |
Dec. 31, 2019 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Nature of Operations | Venus Concept Inc. (formerly Restoration Robotics, Inc.) is a global medical technology company that develops, commercializes, and sells minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related practice enhancement services. The Company’s aesthetic systems have been designed on a cost-effective, proprietary and flexible platform that enables it to expand beyond the aesthetic industry’s traditional markets of dermatology and plastic surgery, and into non-traditional markets, including family and general practitioners and aesthetic medical spas. The Company was incorporated in the state of Delaware on November 22, 2002. In these notes to the audited consolidated financial statements, the “Company”, “Venus Concept,” refers to Venus Concept Inc. and its subsidiaries on a consolidated basis. Merger of Venus Concept Inc. with Venus Concept Ltd. On November 7, 2019, the Company (formerly Restoration Robotics, Inc.), completed its business combination with Venus Concept Ltd., in accordance with the terms of the Agreement and Plan of Merger and Reorganization, dated as of March 15, 2019, as amended from time to time (the “Merger Agreement”), by and among the Company, Venus Concept Ltd. and Radiant Merger Sub Ltd., a company organized under the laws of Israel and a direct, wholly-owned subsidiary of the Company (“Merger Sub”). Under the Merger Agreement, Merger Sub merged with and into Venus Concept Ltd., with Venus Concept Ltd. surviving as a wholly owned subsidiary of the Company (the “Merger”). Following the completion of the Merger, the Company changed its corporate name to Venus Concept Inc. , and the business conducted by Venus Concept Ltd. became the primary business conducted by the Company. At the effective time of the Merger, each outstanding ordinary and preferred share of Venus Concept Ltd., other than shares held by Venus Concept Ltd. as treasury stock or held by the Company or Merger Sub, were converted into the right to receive 8.6506 (the “Exchange Ratio”) validly issued, fully paid and non-assessable shares of Common Stock of the Company, par value $0.0001 per share (“Common Stock”), and each outstanding stock option and warrant issued and outstanding by Venus Concept Ltd. was assumed by the Company and converted into and became an option or warrant (as applicable) exercisable for shares of Common Stock with the number and exercise price adjusted by the Exchange Ratio. The number of shares of Common Stock subject to each Venus Concept Ltd.’s stock option assumed by the Company was determined by multiplying (a) the number of Venus Concept Ltd. ordinary shares that were subject to such Venus Concept Ltd. stock option, as in effect immediately prior to the effective time of the Merger by (b) the Exchange Ratio and rounding the resulting number down to the nearest whole number of shares of Common Stock. The per share exercise price for the shares of Common Stock issuable upon exercise of each Venus Concept Ltd.’s stock option assumed by the Company was determined by dividing (a) the per share exercise price of Venus Concept Ltd.’s ordinary shares subject to such Venus Concept Ltd. stock option, as in effect immediately prior to the effective time of the Merger, by (b) the Exchange Ratio and rounding the resulting exercise price up to the nearest whole cent. The conversion of Venus Concept Ltd. stock options to the Company’s stock options was treated as a modification of the awards for accounting purposes. The issuance of the shares of Common Stock to the former shareholders of Venus Concept Ltd. The shares of Common Stock listed on the Nasdaq Global Market traded through the close of business on November 7, 2019 under the ticker symbol “HAIR” and commenced trading on the Nasdaq Global Market under the ticker symbol “VERO” on a post-Reverse Stock Split basis on November 8, 2019. The Merger was accounted for as a business combination using the acquisition method of accounting under the provisions of Financial Accounting Standards Board, Accounting Standards Codification (“ASC”), Topic 805 “Business Combinations” (“ASC 805”). The Merger was accounted for as a reverse acquisition with Venus Concept Ltd. being deemed the acquiring company for accounting purposes. Under ASC 805, Venus Concept Ltd., as the accounting acquirer, recorded the assets acquired and liabilities assumed of Venus Concept Inc. in the Merger at their fair values as of the acquisition date (Note 4). Venus Concept Ltd. was determined to be the accounting acquirer based on an analysis of the criteria outlined in ASC 805 and the facts and circumstances specific to the Merger, including the fact that immediately following the Merger: (1) Venus Concept Ltd. shareholders owned a substantial majority of the voting rights of the combined company; (2) Venus Concept Ltd. designated a majority (seven of nine) of the initial members of the board of directors of the combined company; and (3) Venus Concept Ltd. senior management held most key positions in senior management of the combined company. As a result, upon consummation of the Merger, the historical financial statements of the Venus Concept Ltd. became the historical financial statements of the combined organization. Concurrent Financing On November 3, 2019, the Company (formerly Restoration Robotics, Inc.) and Venus Concept Ltd. entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors (collectively, the “Investors”) pursuant to which the Company agreed to issue and sell to the Investors in a private placement an aggregate of 7,483,980 shares (the “Concurrent Financing Shares”) of the Company Common Stock, par value $0.0001 per share, and warrants to purchase up to an aggregate of 3,741,990 shares (the “Warrant Shares”) of the Company common stock at an exercise price of $6.00 per share (the “Concurrent Financing Warrants” and, together with the Concurrent Financing Shares and the Concurrent Financing Warrant Shares, the “Securities”) immediately following the closing of the Merger (the “Concurrent Financing”). The gross proceeds from the Securities sold in the Concurrent Financing was $28,065.The costs incurred with respect to the Concurrent Financing amounted to $1,564 and were recorded in the consolidated statements of stockholders’ equity. The Concurrent Financing closed on November 7, 2019. Loans from Venus Concept Ltd. to Restoration Robotics, Inc. From July to September 2019 Venus Concept Ltd. loaned to Restoration Robotics, Inc. an aggregate of $4,500 in three installments, using the proceeds from the issuance of the Venus Concept Ltd.’s unsecured senior subordinated convertible promissory notes (see Note 10). The loans to Restoration Robotics, Inc. accrued interest at a rate of 8.00% per annum and matured on November 30, 2019. As a result of the Merger, these loans were effectively settled at the recorded amount, and no gain or loss was recognized (Note 4). Restatement of Comparative Amounts Venus Concept Ltd. previously classified the issuance of common stock shares and preferred shares as a credit to common stock. In accordance with U.S. GAAP, amounts issued in excess of par value are required to be accounted for in additional paid in capital (APIC). The error is a reclassification from common stock into APIC and has an overall immaterial impact on the consolidated statement of stockholders’ equity and consolidated balance sheet. Items previously reported have been reclassified to conform to U.S. GAAP and the reclassification did not have any impact on the Company’s consolidated statements of operations, consolidated statements of comprehensive loss, consolidated statements of cash flows and net loss per share calculations. The following table summarizes the impact of the restatement adjustments on Venus Concept Ltd.’s previously reported consolidated financial statements: As previously reported Adjustment As restated $ $ $ Consolidated balance sheet and consolidated statement of stockholders' equity January 1, 2018 Common Stock 49,978 (49,973 ) 5 Additional paid in capital 10,075 49,973 60,048 December 31, 2018 Common Stock 57,101 (57,096 ) 5 Additional paid in capital 10,399 57,096 67,495 Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business for the foreseeable future, and, as such, the consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might be necessary should the Company be unable to continue in existence. The Company has had recurring net operating losses and negative cash flows from operations. As of December 31, 2019 and 2018, the Company had an accumulated deficit of $75,686 and $35,067, respectively. Further, during the year ended December 31, 2019, the Company was not in compliance with certain financial covenants contained in the credit agreements with City National Bank of Florida and Madryn Health Partners, L.P. for the nine months ended September 30, 2019 (see Notes 11 and 12). The Company was in compliance with all required covenants as of December 31, 2019. The Company’s recurring losses from operations and negative cash flows raise substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date that the consolidated financial statements are issued. In order to continue its operations, the Company must achieve profitable operations and/or obtain additional equity or debt financing. Until the Company achieves profitability, management plans to fund its operations and capital expenditures through borrowings and issuance of capital stock. The Company completed convertible promissory note offerings in June 2019 and August 2019 (see Note 10) and the Concurrent Financing described above. Subsequent to December 31, 2019 the Company completed a private placement of the common stock shares, preferred shares and warrants, as described in Note 19. There can be no assurance that the Company will be successful in raising additional capital or that such capital, if available, will be on terms that are acceptable to the Company. If the Company is unable to raise sufficient additional capital, it may be compelled to reduce the scope of its operations and planned capital expenditures or sell certain assets, including intellectual property assets. These consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded assets amounts or amounts and classification of liabilities that might result from the uncertainty. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). Principles of Consolidation The accompanying consolidated financial statements include the accounts of Venus Concept Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated on consolidation. Where the Company does not own 100% of its subsidiaries, it accounts for the partial ownership interest through non-controlling interest. Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the implicit interest rate used to record lease revenue, allowance for doubtful accounts, inventory valuation, stock-based compensation, warranty accrual, the valuation and measurement of deferred tax assets and liabilities, accrued severance pay, useful lives of property and equipment, earn-out liability, useful lives of intangible assets, impairment of long-lived assets and goodwill and valuation of acquired intangible assets and goodwill. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates. Foreign Currency The consolidated financial statements are presented in U.S. dollars. The Company and its subsidiaries’ functional currency is the U.S. dollar as determined by management. All exchange gains and losses from remeasurement of monetary balance sheet items resulting from transactions in non-functional currencies are recorded in the consolidated statements of operations as they arise. In respect of transactions denominated in currencies other than the Company and its subsidiaries’ functional currencies, the monetary assets and liabilities are remeasured at the period end rates. Revenue and expenses are remeasured at rates of exchange prevailing on the transaction dates. All of the exchange gains or losses resulting from these transactions are recognized in the consolidated statements of operations. Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist primarily of funds invested in readily available checking and savings accounts, investments in money market funds and short-term time deposits. Restricted Cash As of December 31, 2019, and 2018, the Company was required to hold $83 and $19, respectively, in a separate deposit account as collateral for rent and credit cards. Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, accounts receivable and long-term receivables. The Company’s cash and cash equivalents are invested primarily in deposits with major banks worldwide, as such minimal credit risk exists with respect to such investments. The Company’s trade receivables are derived from global sales to customers. An allowance for doubtful accounts is provided with respect to all balances for which collection is deemed to be doubtful. Risks and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals. If the Company fails to adhere to ongoing Food and Drug Administration (“FDA”) Quality System Regulation, or regulations in countries other than the United States, FDA or other regulators may withdraw its market clearances or take other action. The Company relies on suppliers to manufacture some of the components used in its products. The Company’s suppliers may encounter supply interruptions or problems during manufacturing due to a variety of reasons, including failure to comply with applicable regulations, including FDA’s Quality System Regulation, making errors in manufacturing or losing access to critical services and components, any of which could delay or impede the Company’s ability to meet demand for its products. The Company has borrowings with interest rates that are subject to fluctuations as charged by the lender. The Company does not use derivative financial instruments to mitigate the exposure to interest rate risk. The Company’s objective is to have sufficient liquidity to meet its liabilities when due. The Company monitors its cash balances and cash used in operating activities to meet its requirements. As at December 31, 2019 and 2018, the most significant financial liabilities are the line of credit, trade payables, accrued expenses and other current liabilities, earn-out liability and long-term debt. Concentration of Customers For the years ended December 31, 2019 and 2018, there were no customers accounting for more than 10% of the Company’s revenue. As of December 31, 2019 and 2018, there were no customers accounting for more than 10% of the Company’s accounts receivable. Allowance for Doubtful Accounts Accounts receivable do not bear interest and are typically not collateralized. The Company performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for doubtful accounts. Uncollectible accounts are charged to expense when deemed uncollectible, and accounts receivable are presented net of an allowance for doubtful accounts. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. Actual The allowance for doubtful accounts consisted of the following activity for years ended December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 Balance at beginning of year $ 4,408 $ 2,417 Write-offs (3,905 ) (8,937 ) Provision 9,991 10,928 Balance at end of year $ 10,494 $ 4,408 Inventory Inventories are stated at the lower of cost or net realizable value and include raw materials, work in progress and finished goods. Cost is determined as follows: Raw Materials and Work in Progress (“WIP”) – Cost is determined on a standard cost basis utilizing the weighted average cost of historical purchases, which approximates actual cost. The cost of WIP and finished goods includes the cost of raw materials and the applicable share of the cost of labor and fixed and variable production overheads. The Company regularly evaluates the value of inventory based on a combination of factors including the following: historical usage rates, product end of life dates, technological obsolescence and product introductions. The Company includes demonstration units within inventories. Proceeds from the sale of demonstration units are recorded as revenue. Long-term Receivables Long-term receivables relate to the Company’s subscription revenue or contracts which stipulate payment terms which exceed one year. They are comprised of the unpaid principal balance, plus accrued interest, net of the allowance for credit losses. These receivables have been discounted based on the implicit interest rate in the subscription lease which range between 8% to 9% in 2019 and 8% to 9% in 2018. Unearned interest revenue represents the interest only portion of the respective subscription payments and will be recognized in income over the respective payment term as it is earned. Deferred revenues represent payments received prior to the income being earned. Once the equipment has been delivered or the services have been rendered, these amounts are recognized in income. Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is between three and ten years. Leasehold improvements are depreciated over the lesser of the life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets, and any resulting gain or loss is reflected in consolidated statements of operations. Intangible Assets Intangible assets consist of customer relationships, brand, technology and supplier agreement. Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the respective assets, which range from approximately six to fifteen years. The useful lives of intangible assets are based on the Company’s assessment of various factors impacting estimated cash flows, such as the product’s position in its lifecycle, the existence or absence of like products in the market, various other competitive and regulatory issues, and contractual terms. Impairment of Long-Lived Assets The Company accounts for the impairment of long-lived assets in accordance with FASB, Accounting Standards Codification (“ASC”) 360-10, “Accounting for the Impairment of Long-Lived Assets”. This standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the assets’ carrying amounts may not be recoverable. For assets that are to be held and used, impairment is assessed when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying values. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value and estimated net realizable value. During the years ended December 31, 2019 and 2018, there was no impairment of long-lived assets. Goodwill Goodwill represents the excess of the purchase price of the business acquired over the fair value of the net identifiable assets of an acquired business. The Company allocates goodwill to reporting units at the time of acquisition or when there is a change in the reporting structure and bases that allocation on which reporting units will benefit from the acquired assets and liabilities. Reporting units are defined as operating segments or one level below an operating segment, referred to as a component. Goodwill is not amortized but is tested for impairment annually or more frequently when an event occurs, or circumstances change that indicate the carrying value may not be recoverable. In testing goodwill for impairment, the Company elected to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that goodwill impairment is more likely than not, a two-step impairment test is performed. Under the two-step impairment test, the carrying value of the reporting unit is compared to the fair value of the reporting unit. If the fair value is determined to be less than the carrying value, the Company performs a second step to compute the amount of impairment as the difference between the implied fair value of goodwill and the carrying value. Fair value of a reporting unit is estimated using discounted cash flows. Forecasts of future cash flows are based on the Company’s best estimate of future net sales and operating expenses. Required annual testing of goodwill for impairment was completed for the reporting unit as of December 31, 2019 and determined that goodwill is not impaired. Debt Issuance Costs Costs related to the issuance of debt are presented as a direct deduction to the carrying value of the debt and are amortized to accretion expense using the effective interest rate method over the term of the related debt. Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606 “Revenue from contract with customers” The Company generates revenue from (1) sales of systems through the subscription model, traditional system sales to customers and distributors, (2) other product revenues from the sale of marketing supplies and kits, consumables and Venus Concept’s skincare and hair products and (3) service revenue from the sale of VeroGrafters ™ Many of the Company’s products are sold under subscription contracts with control passing to the customer at the earlier of the end of the term and when the payment is received in full. The subscription contracts include an initial deposit followed by monthly installments typically over a period of 36 months. In accordance with ASC 840 “Leases” (“ASC 840”), these arrangements are considered to be sales-type leases, where the present value of all cash flows to be received within the arrangement is recognized upon shipment to the customer and achievement of the required revenue recognition criteria. Various accounting and reporting systems are used to monitor subscription receivables which include providing access codes to operate the machines to paying customers and restricting access codes on machines to non-paying customers The Company recognizes revenues on other products and services in accordance with ASC 606. Revenue is recognized based on the following five steps: (1) identification of the contract(s) with the customer; (2) identification of the performance obligations in the contract; (3) determine the transaction price; and (4) allocate the transaction price to the separate performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company does not grant rights of return to its end customers. The Company’s products sold through arrangements with distributors are non-refundable, non-returnable and without any rights of price protection. The Company records revenue net of sales tax and shipping and handling costs. Cost of Goods For subscription sales (qualifying as sales-type lease arrangements) and product sales, the costs are recognized upon shipment to the customer or distributor. Advertising Costs The cost of advertising and media is expensed as incurred. For the years ended December 31, 2019 and 2018, advertising costs totaled $2,004 and $1,225, respectively. Research and Development Research and development costs are charged to operations as incurred. Major components of research and development expenses consist of personnel costs, including salaries and benefits, hardware and software research and development costs, regulatory affairs, and clinical costs. Warranty The Company provides a standard warranty against defects for all of its systems. The warranty period begins upon shipment and is typically for a period between one and three years. The Company records a liability for accrued warranty costs at the time of sale of a system, which consists of the warranty on products sold based on historical warranty costs and management’s estimates. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts thereof as necessary. The Company also provides an extended warranty service. Extended warranty can be purchased at any time after the purchase of a system and prior to the expiration of the standard warranty provided with the sale of the system. Extended warranty services include standard warranty services. The Company recognizes the revenue from the sale of an extended warranty over the period of the extended warranty and accounts it for separately from the standard warranty. Income Taxes The Company follows the deferred income taxes method of accounting for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying values of accounts and their respective income tax basis. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years during which the temporary differences are expected to be realized or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is included in income in the period that includes the enactment date. The Company establishes valuation allowances when necessary to reduce deferred tax assets to the amounts that are more likely than not to be realized. The Company evaluates tax positions taken or expected to be taken in the course of preparing tax returns to determine whether the tax positions have met a “more likely-than-not” threshold of being sustained by the applicable tax authority. Tax benefits related to tax positions not deemed to meet the “more likely-than-not” threshold are not permitted to be recognized in the consolidated financial statements. Uncertain Tax Positions The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained on examination based on the technical merit of the position. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments. The Company recognizes interest charges and penalties related to unrecognized tax benefits as a component of the tax provision. Business Combinations The consideration for each acquisition is measured at the aggregate of the fair values of assets acquired, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquired company. Acquisition-related costs are recognized in operations as incurred in general and administrative expenses. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition as soon as all necessary information is obtained where it qualifies as measurement period adjustments within one year from closing. Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company’s consolidated statements of operations. The fair value of stock options (“options”) on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock, to determine the fair value of the award. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The Company has made a policy choice to account for forfeitures when they occur. Stock options granted to non-employees are based on the fair value on the grant date and re-measured at the end of each reporting period based on the fair value until the earlier of the options being fully vested and completion of the performance obligations. These are subject to a service vesting condition and are recognized on a straight-line method over the requisite service period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on historical pre-vesting forfeitures. Net Loss Per Share The Company computes net (loss) income per share in accordance with ASC Topic 260, “Earnings Per Share” (“ASC 260”) and related guidance, which requires two calculations of net (loss) income attributable to the Company’s shareholders per share to be disclosed: basic and diluted. Convertible preferred shares are participating securities and are included in the calculation of basic and diluted net (loss) income per share using the two-class method. In periods where the Company reports net losses, such losses are not allocated to the convertible preferred shares for the computation of basic or diluted net (loss) income. Diluted net (loss) income per share is the same as basic net (loss) income per share for the periods in which the Company had a net loss because the inclusion of outstanding common stock equivalents would be anti-dilutive. JOBS Act Accounting Election The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Issued Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which was subsequently amended by ASU 2018-11, Leases (Topic 842): Targeted Improvements, ASU 2018-20, Narrow-Scope Improvements for Lessors and ASU 2019-01, Leases (Topic 842): Codification Improvements. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring more disclosures related to leasing transactions. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. On November 15, 2019, the FASB issued ASU 2019-10, which (1) provides a framework to stagger effective dates for future major accounting standards and (2) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, ASU 2019-10 changes some effective dates for certain new standards on the following topics in the FASB ASC, including Topic 842, Topic 326 (Financial Instruments — Credit Losses) and Topic 350 (Intangibles — Goodwill and Other). As an emerging growth company, the Company elected to use private company adoption date for ASC 842, which is January 1, 2021. The Company is in the process of determining the impact of Topic 842 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), relating to a customer’s accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a vendor (i.e., a service contract). Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense and requires additional quantitative and qualitative disclosures. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early application is permitted. The Company can choose to adopt the new guidance (1) prospectively to eligible costs incurred on or after the date this guidance is first applied or (2) retrospectively. The Company is evaluating the impact, if any, that this pronouncement will have on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, adds and modifies certain disclosure requirements for fair value measurements in Topic 820. The Company will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the valuation processes of Level 3 fair value measurements. However, the Company will be required to additionally disclose the changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements, and the range and weighted average of assumptions used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments relating to additional disclosure requirements will be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments will be applied retrospectively to all periods presented upon their effective date. The Company anticipates that the adoption of Topic 820 will not have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies guidance on non-employee share-based payments. This expands the scope of ASC 718, Compensation—Stock Compensation (Topic 718), to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, applies to non-employee share-based payment arrangements. The ASU amendment is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company anticipates that the adoption of Topic 718 will not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard introduced the expected credit losses methodology for the measurement of credit losses on financial assets that are not measured at fair value through net income and replaces today’s “incurred loss” model with an “expected credit loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. There have been several consequential subsequent amendments to this standard. This standard is effective for annual periods beginning after January 1, 2023, including interim periods within those fiscal years. The Company is evaluating the impact, if any, that this pronouncement will have on the consolidated financial statements. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Net Loss per Share | 3. NET LOSS PER SHARE Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares outstanding during the year, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing net loss by the weighted-average number of common share equivalents outstanding for the year determined using the treasury-stock method. For purposes of this calculation, common stock warrants and stock options are considered to be common stock equivalents and are only included in the calculation of diluted net loss per share when their effect is dilutive. The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data): For the year ended December 31, 2019 2018 Numerator: Net loss $ (42,295 ) $ (14,209 ) Net loss allocated to stockholders of the Company $ (40,619 ) $ (14,959 ) Denominator: Weighted-average shares of common stock outstanding used in computing net loss per share, basic and diluted 8,517 4,733 Net loss per share: Basic and diluted $ (4.77 ) $ (3.16 ) Due to the net loss, all the outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2019 and 2018 because including them would have been antidilutive : December 31, 2019 2018 Options to purchase common stock 2,727,764 2,355,258 Warrants for common stock 3,990,067 179,932 Total potential dilutive shares 6,717,831 2,535,190 |
Business Combinations
Business Combinations | 12 Months Ended |
Dec. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | 4 . Business combinations The Merger As described in Note 1 above, on November 7, 2019, the Company completed its business combination with Venus Concept Ltd. The Merger allows the Company to significantly expand its presence and capability in the hair restoration market. Venus Concept Ltd. is an innovative global medical technology company that develops, commercializes, and delivers minimally invasive and non-invasive medical aesthetic and hair restoration technologies and related practice enhancement services. It designs and sells a full suite of medical aesthetic products and markets its current products primarily to physicians interested in providing minimally invasive and non-invasive aesthetic medical procedures, and to aesthetic medical spas. Through its NeoGraft division, Venus Concept Ltd. offers an automated hair restoration system that facilitates the harvesting of follicles during a follicular unit extraction or FUE process, improving the accuracy and speed over commonly used manual extraction instruments. For accounting purposes the purchase price was based on (i) the fair value of the Company’s Common Stock as of the Merger date of $15.7 million which was determined based on the number of shares of Common Stock that were issued to the Venus Concept Inc. shareholders in connection with the Merger, (ii) the portion of the fair value attributable to fully and partially vested stock options and warrants, and (iii) the fair value of the promissory notes issued by Venus Concept Ltd. to Restoration Robotics of $4.6 million, which were effectively settled as a result of the Merger. Under the acquisition method of accounting, the total purchase price assets and assumed liabilities based on their fair values as of the acquisition date. Any excess of the purchase price over the fair value of assets acquired and liabilities assumed is allocated to goodwill. Goodwill is allocated to one reporting unit. The For the year ended December 31, 2019, the Company incurred acquisition-related expenses of approximately $12.2 million which are included in general and administrative expenses. The purchase price is allocated to the fair value of assets and liabilities acquired as follows: Number of shares of the combined company to be owned by Venus Concept Inc. shareholders 2,802,466 Multiplied by the price per share of Venus Concept Inc. common stock $ 5.6055 The fair value of Venus Concept Inc. common stock $ 15,709 The value of fully and partially vested stock options and warrants 121 Pre-existing relationships with Venus Concept Ltd. 4,558 Total purchase consideration $ 20,388 Net assets acquired Cash and cash equivalents and restricted cash $ 7,409 Other current assets 9,308 Property and equipment 1,268 Technology 16,900 Brand 1,200 Goodwill 24,847 Other non-current assets 100 Current liabilities (12,909 ) Long-term debt, including current portion (27,505 ) Other non-current liabilities (230 ) Fair value of net assets acquired $ 20,388 The results of this acquisition were included in the Company’s consolidated statement of operations beginning on November 7, 2019. The Company’s consolidated net revenue, net loss and net loss per share for the year ended December 31, 2019 include the following amounts of revenue, net loss and net loss per share of Restoration Robotics, Inc. since the Merger date: Year ended December 31, 2019 Total net revenues $ 2,775 Net loss $ (4,668 ) Net loss per share, basic and diluted $ (0.55 ) The following unaudited pro forma financial information presents the combined results of operations of the Company as if the Merger had occurred on January 1, 2018. The unaudited pro forma financial information is not necessarily indicative of what the Company’s consolidated results of operations actually would have been had the Merger occurred at the beginning of each year. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined Company. Year ended December 31, 2019 2018 Total net revenues $ 123,263 $ 124,570 Net loss $ (52,976 ) $ (45,226 ) The unaudited pro forma financial information above gives effect primarily to the following: (1) Incremental amortization and depreciation expense related to the estimated fair value of identifiable intangible assets and property and equipment from the purchase price allocation. (2) The exclusion of acquisition costs for the year ended December 31, 2019. (3) Reduction in interest expenses under , as defined in Note 11, and under the agreements as defined in Note 10. (4) Reduction in stock-based compensation expense related of the conversion of Venus Concept Ltd. stock options to Venus Concept Inc. stock options. (5) The exclusion of inventory step-up amortization for the year ended December 31, 2019 and the addition of this item to the year ended December 31, 2018. Acquisition of non-controlling interest On July 4, 2019, the Company acquired the remaining 49% minority interest shares of Venus Concept Israel Ltd. for total consideration of $123 in a form of transfer of equipment. Acquisition-related costs were expensed as incurred and amounted to $19 Acquisition of NeoGraft On February 15, 2018, the Company acquired the assets and liabilities of NeoGraft Solutions, Inc. (“NeoGraft”). The primary reason for this acquisition was to expand the product offering to hair restoration solutions. Acquisition-related costs were expensed as incurred and amounted to $67 for the year ended December 31, 2018. Pro forma results of operations have not been presented because the effect of this acquisition was not material to the results of operations. In 2018, the total revenues and net income related to NeoGraft amounted to $7,763 and $707, respectively. The total consideration for the acquisition was $8,679, of which $500 was held back at closing of the acquisition and is payable in two annual installments of $250 beginning one year from the closing date. As of December 31, 2019, $250 remains payable by the Company. The purchase price is allocated to the fair value of assets and liabilities acquired as follows: Cash on closing $ 7,502 Installment payments 500 Contingent earn-out payments 677 Total purchase price $ 8,679 Net assets acquired Inventory $ 1,315 Accounts receivable 44 Property and equipment 7 Accounts payable (990 ) Customer relationships 1,400 Brand 1,300 Supplier agreement 3,000 Fair value of net assets acquired $ 6,076 Goodwill $ 2,603 Goodwill is primarily related to sales growth from future product and service offerings and new customers. The goodwill of NeoGraft is deductible for tax purposes under the cumulative eligible capital expenditures deduction in Canada. The weighted average life remaining on the intangibles acquired as a result of both business combinations are as follows: Intangible asset category: (in years) Customer relationships 14 Brand 9 Technology 6 Supplier agreement 9 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 5. FAIR VALUE MEASUREMENTS Financial assets and financial liabilities are initially recognized at fair value when the Company becomes a party to the contractual provision of the financial instrument. Subsequently, all financial instruments are measured at amortized cost using the effective interest method. The financial instruments of the Company consist of cash and cash equivalents, restricted cash, accounts receivable, long-term receivables, line of credit, trade payables, accrued expenses and other current liabilities, earn-out liability, other long-term liabilities and long-term debt. In view of their nature, the fair value of most of the financial instruments approximates their carrying amounts. The Company measures the fair value of its financial assets and liabilities using the fair value hierarchy. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The accounting guidance establishes a three-tiered hierarchy, which prioritizes the inputs used in the valuation methodologies in measuring fair value: Level - Quoted prices in active markets for identical assets or liabilities. Level - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The categorization of a financial instrument within the valuation hierarchy is based on the lowest level of input that is significant to the fair value measurement. The Company classifies its restricted cash and guaranteed investment certificates within Level 2 as it uses alternative pricing sources and models utilizing market observable inputs. The following tables set forth the fair value of the Company’s Level 2 and Level 3 financial assets and liabilities within the fair value hierarchy: Fair Value Measurements as of December 31, 2019 Quoted Prices in Active Markets using Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Guaranteed Investment Certificates ("GIC") $ — $ 63 $ — $ 63 Restricted cash — 83 — 83 Total assets $ — $ 146 $ — $ 146 Liabilities Long-term debt $ — $ — $ 61,351 $ 61,351 Contingent earn-out consideration — — 655 655 Total liabilities $ — $ — $ 62,006 $ 62,006 Fair Value Measurements as of December 31, 2018 Quoted Prices in Active Markets using Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Guaranteed Investment Certificates ("GIC") $ — $ 81 $ — $ 81 Restricted cash — 19 — 19 Total assets $ — $ 100 $ — $ 100 Liabilities Long-term debt $ — $ — $ 56,401 $ 56,401 Contingent earn-out consideration — — 950 950 Total liabilities $ — $ — $ 57,351 $ 57,351 The earn-out liability is measured using discounted cash flow techniques, with the expected cash outflows estimated based on the probability of assessment of the acquired business achieving the revenue metrics required for payment. Expected future revenues of the acquired business and the associated estimate of probability are not observable inputs. The payments due are based on point in time measurements of the metrics quarterly for two years from the acquisition date. The following table provides a roll forward of the aggregate fair values of the earn-out liability as of December 31, 2019, for which fair value is determined using Level 3 inputs: Beginning balance $ 1,177 Payments (227 ) December 31, 2018 950 Payments (828 ) Change in value 533 December 31, 2019 $ 655 |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Accounts Receivable | 6. ACCOUNTS RECEIVABLE The Company’s products may be sold under subscription contracts with control passing to the customer at the end of the lease term, which is generally 36 months. These arrangements are considered to be sales-type leases, where the present value of all cash flows to be received within the arrangement is recognized upon shipment to the customer as lease revenue. A financing receivable is a contractual right to receive money, on demand or on fixed or determinable dates, that is recognized as an asset on the Company's consolidated balance sheets. The Company's financing receivables, consisting of its sales-type leases, totaled $72,602 and $74,554 at December 31, 2019 and 2018, respectively, and are included in accounts receivable and long-term receivables on the consolidated balance sheets. The Company evaluates the credit quality of an obligor at lease inception and monitors credit quality over the term of the underlying transactions. The Company performed an assessment of the allowance for doubtful accounts as of December 31, 2019 and 2018. Based upon such assessment, the Company recorded an allowance for doubtful totaling $10,494 and $4,408 as of December 31, 2019 and 2018, respectively. In 2018 the Company recorded a significant provision of $8,300 for bad debts against the receivable of a large U.S. national account customer that filed for Chapter 11 bankruptcy in February of 2019. A summary of the Company’s accounts receivables is presented as follows: As of December 31, 2019 2018 Gross accounts receivable $ 105,127 $ 78,962 Unearned income (5,623 ) (5,601 ) Allowance for doubtful accounts (10,494 ) (4,408 ) $ 89,010 $ 68,953 Reported as: Current trade receivables $ 58,977 $ 35,314 Current unearned interest income (3,942 ) (3,849 ) Long-term trade receivables 35,656 39,240 Long-term unearned interest income (1,681 ) (1,752 ) $ 89,010 $ 68,953 Current subscription contracts are reported as part of accounts receivable. The following are the contractual commitments, net of allowance for doubtful accounts, to be received by the Company over the next 5 years: December 31, Total 2020 2021 2022 2023 2024 Current financing receivables, net of allowance of $2,960 $ 37,197 $ 37,197 $ — $ — $ — $ — Long-term financing receivables, net of allowance of $2,818 35,405 — 25,701 9,527 177 — $ 72,602 $ 37,197 $ 25,701 $ 9,527 $ 177 $ — |
Select Balance Sheet and Statem
Select Balance Sheet and Statement of Operations Information | 12 Months Ended |
Dec. 31, 2019 | |
Select Balance Sheet And Income Statement Information [Abstract] | |
Select Balance Sheet and Statement of Operations Information | 7. SELECT BALANCE SHEET AND STATEMENT OF OPERATIONS INFORMATION Inventory Inventory December 31, 2019 2018 Raw materials $ 877 $ 92 Work-in-progress 2,067 1,323 Finished goods 15,900 18,846 Total inventory $ 18,844 $ 20,261 Additions to inventory are primarily comprised of newly produced units and applicators, refurbishment cost from demonstration units and used equipment which were reacquired during the year from upgraded sales. The Company expensed $26,869 ($19,929 in 2018) in cost of goods sold during the year. The balance of cost of goods sold represents the sale of applicators, parts and warranties. The Company provides for excess and obsolete inventories when conditions indicate that the inventory cost is not recoverable due to physical deterioration, usage, obsolescence, reductions in estimated future demand and reductions in selling prices. Inventory provisions are measured as the difference between the cost of inventory and net realizable value to establish a lower cost basis for the inventories. As at December 31, 2019, a provision for obsolescence of $1,439 ($470 in 2018) was taken against inventory. Property and Equipment, Net Property December 31, Useful Lives (in years) 2019 2018 Lab equipment tooling and molds 4 - 10 $ 7,872 $ 3,379 Office furniture and equipment 6 - 10 1,710 974 Leasehold improvements up to 10 1,950 948 Computers and software 3 1,811 783 Vehicles 5 - 7 16 70 Total property and equipment 13,359 6,154 Less: Accumulated depreciation (8,711 ) (2,773 ) Total property and equipment, net $ 4,648 $ 3,381 Depreciation expense amounted to $1,026 and $892 for the years ended December 31, 2019 and 2018. Other Current Assets December 31, 2019 2018 Government remittances (1) $ 1,704 $ 987 Sundry assets and miscellaneous 1,397 436 Total other current assets $ 3,101 $ 1,423 (1) Government remittances are receivables from the local tax authorities for refund of sales taxes and income taxes. Accrued Expenses and Other Current Liabilities December 31, 2019 2018 Payroll and related expense $ 3,117 $ 728 Accrued expenses 10,645 4,303 Commission accrual 4,215 3,866 Sales and consumption taxes 3,143 1,983 Total accrued expenses and other current liabilities $ 21,120 $ 10,880 Warranty Accrual The following table provides the details of the change in the Company’s warranty accrual: December 31, 2019 2018 Balance as of the beginning of the year $ 1,336 $ 1,039 Warranties assumed through business combination 273 - Warranties issued during the year 1,038 998 Warranty costs incurred during the year (670 ) (701 ) Balance at the end of the year $ 1,977 $ 1,336 Current 1,254 495 Long-term 723 841 Total $ 1,977 $ 1,336 Finance Expenses The following table provides the details of the Company’s finance expenses: December 31, 2019 2018 Interest expense $ 7,166 $ 4,889 Gain on settlement of debt (297 ) — Accretion on long-term debt 680 472 Total finance expenses $ 7,549 $ 5,361 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Intangible Assets | 8. INTANGIBLE ASSETS Intangible assets net of accumulated amortization were as follows: At December 31, 2019 Gross Amount Accumulated Amortization Net Amount Customer relationships $ 1,400 $ (149 ) $ 1,251 Brand 2,500 (276 ) 2,224 Technology 16,900 (469 ) 16,431 Supplier agreement 3,000 (568 ) 2,432 Total intangible assets $ 23,800 $ (1,462 ) $ 22,338 At December 31, 2018 Gross Amount Accumulated Amortization Net Amount Customer relationships $ 1,400 $ (56 ) $ 1,344 Brand 1,300 (125 ) 1,175 Supplier agreement 3,000 (267 ) 2,733 Total intangible assets $ 5,700 $ (448 ) $ 5,252 Estimated amortization expense for the next five fiscal years and all years thereafter are as follows: Years ending December 31, 2020 $ 3,473 2021 3,473 2022 3,473 2023 3,473 2024 3,473 Thereafter 4,973 Total $ 22,338 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES Operating Leases The Company and its subsidiaries have various operating lease agreements, which expire on various dates. The Company recognizes rent expense on a straight-line basis over the non-cancellable lease period and records the difference between cash rent payments and the recognition of rent expense as a deferred rent liability. When leases contain escalation clauses, rent abatements and/or concessions, such as rent holidays and landlord or tenant incentives or allowances, the Company applies them in the determination of straight-line rent expense over the lease period. Aggregate future minimum lease payments and purchase commitments with manufacturers as of December 31, 2019 are as follows: Years ending December 31, Office Lease Purchase Commitments Total 2020 $ 2,071 $ 5,976 $ 8,047 2021 1,788 — 1,788 2022 937 — 937 2023 515 — 515 Thereafter 1,410 — 1,410 Total $ 6,721 $ 5,976 $ 12,697 The total rent expense for all operating leases for the years ended December 31, 2019 and 2018 was $2,199 and $1,344. Commitments As of December 31, 2019, the Company has non-cancellable purchase orders placed with its contract manufacturers in the amount of $5,748. In addition, as of December 31, 2019, the Company had $1,516 of open purchase orders that can be cancelled with 90 days’ notice, except for a portion equal to 15% of the total amount representing the purchase of “long lead items”. The Company has also committed to quarterly earn-out payments as part of its purchase obligation of the assets described in Note 4 of these consolidated financial statements. The amount due is 5% of NeoGraft® equipment sales and services that occur within the quarter. The balance of the earn-out was $655 as at December 31, 2019 ($950 in 2018), which includes deferred payments and is presented as part of accrued expenses and other current liabilities. Legal Proceedings Purported Shareholder Class Actions Between May 23, 2018 and June 11, 2019, four putative shareholder class actions complaints were filed against Restoration Robotics, certain of its former officers and directors, certain of its venture capital investors, and the underwriters of the IPO. Two of these complaints, Wong v. Restoration Robotics, Inc., et al., No. 18CIV02609, and Li v. Restoration Robotics, Inc., et al., No. 19CIV08173 (together, the “State Actions”), were filed in the Superior Court of the State of California, County of San Mateo, and assert claims under Sections 11, 12(a)(2) and 15 of the Securities Act of 1933, or the Securities Act. The other two complaints, Guerrini v. Restoration Robotics, Inc., et al., No. 5:18-cv-03712-EJD and Yzeiraj v. Restoration Robotics, Inc., et al., No. 5:18-cv-03883-BLF (together, the “Federal Actions”), were filed in the United States District Court for the Northern District of California, and assert claims under Sections 11 and 15 of the Securities Act. The complaints all allege, among other things, that the Restoration Robotics’ Registration Statement filed with the SEC on September 1, 2017 and the Prospectus filed with the SEC on October 13, 2017 in connection with Restoration Robotics’ IPO were inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and omitted to state material facts required to be stated therein. The complaints seek unspecified monetary damages, other equitable relief and attorneys’ fees and costs. In the State Actions Restoration Robotics, along with the other defendants, successfully demurred to the initial Wong complaint for failure to state a claim, and secured a stay of both cases based on the forum selection clause contained in its Amended and Restated Certificate of Incorporation, which designates the federal district courts as the exclusive forums for claims arising under the Securities Act. However, on December 19, 2018, the Delaware Court of Chancery in Sciabacucchi v. Salzberg held that exclusive federal forum provisions are invalid under Delaware law. Based on this ruling, the San Mateo Superior Court lifted its stay of State Actions on December 10, 2019. On January 17, 2020, Plaintiffs in the State Actions filed a consolidated amended complaint for violations of federal securities laws, alleging again that, among other things, the Registration Statement filed with the SEC on September 1, 2017 and the Prospectus filed with the SEC on October 13, 2017 in connection with Restoration Robotics’ IPO were inaccurate and misleading, contained untrue statements of material fact, omitted to state other facts necessary to make the statements made not misleading and omitted to state material facts required to be stated therein. The complaint seeks unspecified monetary damages, other equitable relief and attorneys’ fees and costs. On February 24, 2020, the Company demurred to the consolidated amended complaint for failure to state a claim. A hearing on the Company’s demurrer is currently scheduled for May 8, 2020. In the Federal Actions, which have been consolidated under the caption in re Restoration Robotics, Inc. Securities Litigation, Case No. 5:18-cv-03712-EJD, Lead Plaintiff Eduardo Guerrini filed his consolidated amended complaint for violations of federal securities laws on November 30, 2018. The consolidated amended complaint alleges again that, among other things, Restoration Robotics’ Registration Statement filed with the SEC on September 1, 2017 and the Prospectus filed with the SEC on October 13, 2017 in connection with the IPO were inaccurate and misleading, contained untrue statements of material facts, omitted to state other facts necessary to make the statements made not misleading and omitted to state material facts required to be stated therein. On January 29, 2019, Restoration Robotics, along with certain of its former officers and directors, filed a motion to dismiss the consolidated amended complaint for failure to state a claim. On October 18, 2019, the District Court granted Restoration Robotics motion to dismiss as to all but two allegedly false or misleading statements contained in our Prospectus. On December 9, 2019, the Company filed its answer to the consolidated amended complaint denying the falsity of these statements, and discovery is underway. In addition to the State and Federal Actions, on July 11, 2019, a verified shareholder derivative complaint was filed in the United States District Court for the Northern District of California, captioned Mason v. Rhodes, No. 5:19-cv-03997-NC. The complaint alleges that certain of Restoration Robotics’ former officers and directors breached their fiduciary duties, have been unjustly enriched and violated Section 14(a) of the Securities Exchange Act of 1934, or the Exchange Act, in connection with the IPO and Restoration Robotics’ 2018 proxy statement. The complaint seeks unspecified damages, declaratory relief, other equitable relief and attorneys’ fees and costs. On August 21, 2019, the District Court granted the parties’ joint stipulation to stay the Mason action during the pendency of the Federal Actions, and the case remains stayed. In addition to the actions described above relating to the IPO, two lawsuits purporting to challenge disclosures made in connection with our merger have also been filed. The first, captioned Bushansky v. Restoration Robotics, Inc., et al., No. 5:19-cv-06004-MMC, alleged, among other things, that defendants violated Sections 14(a) and 20(a) of the Exchange Act and SEC Rule 14a-9. The complaint alleged that the proxy statement, filed with the SEC by Restoration Robotics on September 10, 2019 in connection with the Merger, omitted or misrepresented material information. The complaint sought, among other things, injunctive relief, unspecified damages, and attorneys’ fees and costs. On November 6, 2019, the plaintiff voluntarily dismissed the Bushansky action with prejudice as to his individual claims and without prejudice as to the claims of the putative class. The second, a putative shareholder class action complaint captioned Pak v. Restoration Robotics, Inc., et al., No. 1:19-cv-02237, was filed in the United States District Court for the District of Delaware on December 6, 2019. The complaint alleges, among other things, that defendants violated Sections 14(a) and 20(a) of the Exchange Act and SEC Rule 14a-9. The complaint alleges that the proxy statement, filed with the SEC by Restoration Robotics on September 10, 2019 in connection with the Merger, contained false or misleading information. The complaint seeks, among other things, compensatory and/or rescissory damages, and attorneys’ fees and costs. On February 26, 2020, the District Court appointed Joon Pak as Lead Plaintiff in the Pak action, and approved his selection of Lead Counsel. The Company believes that these lawsuits are without merit and management intends to vigorously defend against these claims. Administrative Investigation Case The Company’s Chinese subsidiary, Venus Concept China, imports and sells registered medical devices and unregistered non-medical devices in the People’s Republic of China (“PRC”). One of its unregistered products has been the subject of inquiries from two district level branches of the SAMR, Xuhui MSA and Huangpu MSA, as to whether the product was properly sold as a non-medical device. In January 2019, Venus Concept China applied to register a version of this non-medical device as a medical device with the National Medical Products Administration of PRC, or NMPA. On June 12, 2019, Venus Concept China was informed that Xuhui MSA had opened an administrative investigation case related to whether the device is an unregistered medical device, as a result of a complaint that Xuhui MSA received from a former distributor of Venus Concept China. Huangpu MSA notified Venus Concept China that it would be suspending its separate investigation against Venus Concept China, pending the results of the Xuhui MSA investigation. The Company and Venus Concept China have voluntarily stopped sales in China of this product. On December 11, 2019, Xuhui MSA informed Venus Concept China that a determination had been made by the Shanghai Medical Products Administration that Versa’s IPL function should be administered as a Class II medical device. Xuhui MSA also suggested that Venus Concept China consider a voluntary recall of all Versa units sold in China. Venus Concept China is currently contemplating a recall plan. In late January 2020, Venus Concept China received a copy of the Shanghai Medical Products Administration’s determination that because of the intended uses for Versa’s IPL function comprise medical treatment functions such as “treatment of benign pigmented epidermis and skin lesions,” Versa’s IPL function should be administered as a Class II medical device. Venus Concept China has not yet received a notice of proposed penalty decision from Xuhui MSA. Venus Concept China has not yet received a determination from NMPA on its application for registering Versa’s IPL function as a medical device. Although the revenue generated from the product that is the subject of the investigation did not represent a material amount of our total revenues for the years ended December 31, 2019 or 2018, monetary penalties nonetheless could be material. The Company and Venus Concept China are cooperating with the relevant authorities; however, Venus Concept China cannot predict the outcome of this matter. Further, the Company may from time to time continue to be involved in various legal proceedings of a character normally incident to the ordinary course of its business, which does not deem to be material to the Company’s business and results of operations. |
Convertible Promissory Notes
Convertible Promissory Notes | 12 Months Ended |
Dec. 31, 2019 | |
Debt Instruments [Abstract] | |
Convertible Promissory Notes | 10. CONVERTIBLE PROMISSORY NOTES Venus Concept Ltd. convertible promissory notes In June 2019, Venus Concept Ltd. issued unsecured senior subordinated convertible promissory notes in the aggregate principal amount of $7,800. In August 2019, Venus Concept Ltd. issued an aggregate of $21,250 of additional unsecured senior subordinated convertible promissory notes to certain investors. The convertible notes issued by Venus Concept Ltd. in June 2019 and August 2019 are collectively referred to as the “2019 Notes”. The 2019 Notes bore interest at a rate of 8.00% per annum, were unsecured and were due and payable, including accrued interest, on the thirtieth day following the termination of the Merger. When the Merger was consummated, all outstanding principal and any accrued and unpaid interest under the 2019 Notes was automatically converted into a number of shares of fully paid and non-assessable shares of the Common Stock, par value $0.0001 per share, of the Company, calculated by dividing the outstanding principal amount of the 2019 Notes (and any accrued and unpaid interest under the 2019 Notes) by the post-Merger conversion price of $6.996 per share. In connection with the 2019 Notes, Venus Concept Ltd. recognized interest expense of $599 during the period from January 1, 2019 through November 6, 2019. Venus Concept Inc. (formerly Restoration Robotics) convertible promissory notes On February 28, 2019, the Company entered into a Note Purchase Agreement pursuant to which the Company raised $5,000 through the issuance of unsecured subordinated convertible promissory notes to two investors (the “Investors”). The Note Purchase Agreement was amended on August 20, 2019 to adjust the post-Merger conversion price for per share from $0.825 to $6.996 (post-split) and to provide for automatic conversion of the convertible promissory notes upon consummation of the Merger. In addition, on August 20, 2019, the Company entered into a Note Purchase Agreement pursuant to which the Company raised $2,000 through the issuance of one unsecured subordinated convertible promissory note to one investor. The convertible notes issued by the Company in February 2019 and August 2019 pursuant to the Notes Purchase Agreements are collectively referred to as the “Notes”. On November 7, 2019, immediately following the closing of the Merger, all outstanding principal and any accrued and unpaid interest of the 2019 Notes and the Notes in the aggregate amount of $36,958 were automatically converted into 5.3 million of fully paid and non-assessable shares of Common Stock, of which 1.2 million were issued subsequent to December 31, 2019. |
Long-Term Debt
Long-Term Debt | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | 11. LONG-TERM DEBT Solar Loan and Security Agreement In May 2018, the Company entered into a Loan and Security Agreement and as subsequently amended (the “Solar Agreement”) with Solar Capital Ltd. (“Solar”) and certain other lenders (together with Solar, the “Lenders”), and Solar, as the Collateral Agent. The Solar Agreement consists of a four-year term loan for an aggregate principal amount of $20,000, for working capital, to fund the Company’s general business requirements and to repay indebtedness of the Company to Oxford Finance LLC. The borrowings under the Solar Agreement bore interest through maturity at a rate equal to the U.S. Dollar LIBOR rate plus 7.95% per annum. In addition, pursuant to the Solar Agreement, the Company issued the Lenders warrants (“Solar 2018 Warrants”) to purchase an aggregate of 10,781 On November 7, 2019, in connection with the consummation of the Merger, the Company paid off and terminated its obligations under Solar Agreement. The payoff to the Lenders pursuant to the Solar Agreement consisted of cash and the issuance of warrants ( “Solar 2019 Warrants”) to purchase up to 50,000 shares of the Company’s Common Stock at an exercise price of $6.00 per share. The fair value of Solar 2019 Warrants issued was determined to be $137 using a Black-Scholes valuation model with the following assumptions: Common Stock price at issuance of $5.61 per share; exercise price of $6.00; risk-free interest rate of 1.74% based upon observed risk-free interest rates; expected volatility of 58.0%; expected term of five years, which is the contractual life of the warrants; and a dividend yield of 0%. Solar 2019 Warrants exercisable for 50,000 shares of Common Stock were outstanding as of December 31, 2019 . Madryn Credit Agreement On October 11, 2016, Venus Concept Ltd. entered into a credit agreement as a guarantor with Madryn Health Partners, LP, as administrative agent, and certain of its affiliates as lenders (collectively, “Madryn”), as amended, or the Madryn Credit Agreement, pursuant to which Madryn agreed to make certain loans to certain of Venus Concept Ltd.’s subsidiaries (the “Subsidiary Obligors”). The Madryn Credit Agreement is comprised of four tranches of debt aggregating $70,000. As at December 31, 2019, the Subsidiary Obligors had borrowed $60,000 under the term A-1 and A-2 and B tranches of the Madryn Credit Agreement. Term C borrowings of $10,000 were undrawn and are no longer available. As of December 31, 2018, the Company has drawn on the term A-1 and A-2 borrowings for gross debt of $50,000. Borrowings under the Madryn Credit Agreement are secured by substantially all of the Company’s assets and the assets of the Subsidiary Obligors. On the 24th payment date, which is September 30, 2022, the aggregate outstanding principal amount of the loans, together with any accrued and unpaid interest thereon and all other amounts due and owing under the loan agreement will become due and payable in full. In connection with the Madryn Credit Agreement, Venus Concept Ltd. issued three types of 10-year warrants (“Madryn Warrants”). Immediately prior to the consummation of the Merger, Madryn held Madryn Warrants to purchase 150,000 ordinary shares of Venus Concept Ltd. at a price of $5.0604 per share, 150,000 Series B Preferred Shares at a price of $5.0604 per share, and 12,000 Series C Preferred Shares of Venus Concept Ltd. at a price of $5.0604 per share. At the effective time of the Merger, each outstanding Venus Concept Ltd. warrant, whether or not vested, to purchase ordinary shares or preferred shares, as applicable, of Venus Concept Ltd., that was unexercised immediately prior to the effective time of the Merger was converted into a warrant to purchase shares of Common Stock as determined pursuant to the Exchange Ratio as defined in Note 1. The Company had Madryn Warrants exercisable for 179,932 shares of Common Stock outstanding as of December 31, 2019. Effective August 14, 2018, interest on the Madryn loan is 9%, payable quarterly. Previously, interest was payable quarterly, at the Company’s option, as follows: cash interest 9% during the interest only period, which was 3 years or 12 principal payments after closing, plus an additional 4% rate, paid in kind (“PIK”). The Company has the option of settling the PIK interest in cash or adding the owed interest to the principal amount of the loan. The covenants under the loan agreement with Madryn require the Company to achieve minimum reported revenue targets and minimum levels of cash on hand in certain subsidiaries. As of June 30, 2019, the Company was not in compliance with the minimum liquidity covenant under its loan agreement with Madryn. Additionally, the Company failed to timely pay an interest payment due June 28, 2019 as required by the Madryn Credit Agreement; however, this interest payment was subsequently made by the Company on July 10, 2019. On July 26, 2019, the Company and Madryn executed a waiver and amendment to the Madryn Credit Agreement pursuant to which Madryn lowered the liquidity covenant threshold from $2,000 to $200 through the earlier of August 30, 2019 or the time the Company raised $21,000 in additional equity. Madryn waived the existing events of default. In addition, the amendment to the Madryn Credit Agreement included, among other changes, a requirement that the Company complete the Concurrent Financing with proceeds of $21,000 no later than August 30, 2019. This financing was completed as described above in the Note 1. Pursuant to the terms of the amendment, if all or any portion of the loans under the Madryn Credit Agreement are prepaid, then a prepayment premium must be paid equal to: (i) 8.00% of the loans prepaid if prepaid on or prior to August 31, 2019, (ii) 6.50% if prepaid after August 31, 2019 but on or prior to August 31, 2020, (iii) 5.00% if prepaid after August 31, 2020 but on or prior to February 28, 2021, (iv) 4.00% if prepaid after February 28, 2021 but on or prior to August 31, 2021, (v) 3.00% if prepaid after August 31, 2021 but on or prior to February 28, 2022, and (vi) 2.00% if prepaid after February 28, 2022. As of September 30, 2019, the Company was not in compliance with the minimum debt service coverage ratio under its credit facility with City National Bank of Florida. Failure to comply with the covenants under the City National Bank of Florida credit facility would result in a default, which would also cause a default in the Madryn Credit Agreement. City National Bank of Florida has provided a waiver for cross defaults arising under the Madryn Credit Agreement through September 30, 2019. As of December 31, 2019 the Company was in compliance with all required covenants. In connection with the Merger, the Company entered into an amendment to the Madryn Credit Agreement Credit Agreement As a guarantor under the Madryn Credit Agreement Credit Agreement The scheduled principal payments on the outstanding borrowings as of December 31, 2019 are as follows: As of December 31, 2019 2020 $ - 2021 - 2022 62,700 Total 62,700 Less: debt discounts and issuance costs (1,471 ) Less: current portion - Non-current portion $ 61,229 For the years ended December 31, 2019 and 2018, the Company did not make any principal repayments. |
Credit Facility
Credit Facility | 12 Months Ended |
Dec. 31, 2019 | |
Line Of Credit Facility [Abstract] | |
Credit Facility | 12. The Company has an agreement with City National Bank of Florida (“CNB”) pursuant to which CNB agreed to provide a revolving credit facility to certain of the Company’s subsidiaries in the maximum principal amount of $10,000 ($7,500 in 2018), to be used to finance working capital requirements (the “Credit Facility”). As of December 31, 2019, the Company had $7,789 outstanding ($5,655 in 2018) under the Credit Facility, which bears interest at LIBOR rate plus 3.25%, which amounted to a weighted average of 5.4% (5.7% in 2018). In April 2019, the Company increased the Credit Facility capacity from $7,500 to $10,000. The Credit Facility is secured by accounts receivable and inventory and requires the Company to maintain either a minimum cash balance in deposit accounts or a maximum total liability to tangible net worth ratio and a minimum debt service coverage ratio. As of December 31, 2019 and 2018, the Company was in compliance with maintaining the maximum total liability to tangible net worth ratio. To be in compliance with maintaining the minimum debt service coverage ratio as of December 31, 2018, the Company received a waiver to exclude write-offs from a large U.S. national account from the ratio (see Note 6). An event of default under this agreement would cause a default under the Madryn Credit Agreement (see Note 11). As of March 31, 2019, and June 30, 2019, Venus Concept Ltd. was not in compliance with the minimum debt service coverage ratio under the Credit Facility. CNB provided Venus Concept Ltd. with waivers as of March 31, 2019, and June 30, 2019. As of September 30, 2019, the Company was not in compliance with the minimum debt service coverage ratio under the Credit Facility. On October 30, 2019, CNB amended the minimum debt service coverage ratio covenant calculation, reaffirmed its prior waiver as of June 30, 2019 and provided the Company with a waiver removing the requirement to meet the minimum debt service coverage ratio as of September 30, 2019. As of December 31, 2019 the Company was in compliance with all required covenants. |
Common Stock Reserved For Issua
Common Stock Reserved For Issuance | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Common Stock Reserved For Issuance | 13. COMMON STOCK RESERVED FOR ISSUANCE The Company is required to reserve and keep available out of its authorized but unissued shares of Common Stock a number of shares sufficient to affect the conversion of all outstanding shares of convertible preferred stock, plus options granted and available for grant under the incentive plans. December 31, 2019 Outstanding common stock warrants 3,990,067 Outstanding stock options 3,278,439 Shares reserved for future option grants 742,828 Total common stock reserved for issuance 8,011,334 |
Stock Option Plan
Stock Option Plan | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock Option Plan | 14. STOCK OPTION PLAN 2010 Plan In November 2010, the Company’s Board of Directors adopted a share option plan (the “2010 Share Option Plan”) pursuant to which some of the Company’s ordinary shares are reserved for issuance upon the exercise of options to be granted to directors, officers, employees and consultants of the Company. The 2010 Share Option Plan is administered by the Company’s Board, which designates the options and dates of grant. Options granted vest over a period determined by the Board, originally had a contractual life of seven years, which was extended by ten years in November 2017, and are non-assignable except by the laws of descent. The Board has the authority to prescribe, amend and rescind rules and regulations relating to the 2010 Share Option Plan, provided that any such amendment or rescindment that would adversely affect the rights of an Optionee that has received or been granted an Option shall not be made without the Optionee’s written consent. As of December 31, 2019, the number of shares of the Company’s common stock reserved for issuance and available for grant under the 2010 Share Option Plan was 44,450 (188,217 in 2018). 2019 Plan The 2019 Incentive Award Plan was originally established under the name Restoration Robotics, Inc., as the 2017 Incentive Award Plan. It was adopted by the Company’s Board of Directors on September 12, 2017 and approved by the Company’s stockholders on September 14, 2017. The 2017 Incentive Award Plan was amended, restated, and renamed as set forth, effective upon the approval of the Company’s stockholders on October 4, 2019 and the consummation of the Merger. Under the 2019 Plan, 450,000 shares of Common Stock were initially reserved for issuance pursuant to a variety of stock-based compensation awards, including stock options, stock appreciation rights, or SARs, performance stock awards, performance stock unit awards, restricted stock awards, restricted stock unit awards and other stock-based awards, plus the number of shares remaining available for future awards under the 2019 Plan as of the date of the Merger. As of December 31, 2019, there were 698,378 of shares of Common Stock available under the 2019 Plan. The Company recognized stock-based compensation for its employees and non-employees in the accompanying consolidated statements of operations as follows: Year Ended December 31, 2019 2018 Cost of sales $ 3 $ 2 Selling and marketing 77 416 General and administrative 840 785 Research and development 1,238 54 Total stock-based compensation $ 2,158 $ 1,257 Stock Options The fair value of each option is estimated at the date of grant using the Black-Scholes option pricing formula with the following assumptions : Year Ended December 31, 2019 2018 Expected term (in years) 4.00-5.00 3.00-4.00 Risk-free interest rate 1.4-2.53% 2.10-2.80% Expected volatility 49.00% 50.00% Expected dividend rate 0% 0% Expected Term —The expected term represents management’s best estimate for the options to be exercised by option holders. Volatility —Since the Company does not have a trading history for its common stock, the expected volatility was derived from the historical stock volatilities of comparable peer public companies within its industry that are considered to be comparable to the Company’s business over a period equivalent to the expected term of the stock-based awards. Risk-Free Interest Rate —The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the stock-based awards’ expected term. Dividend Rate —The expected dividend is zero as the Company has not paid nor does it anticipate paying any dividends on its common stock in the foreseeable future. Fair Value of Common Stock — Prior to the Merger, Venus Concept Ltd. used the price per share in its latest sale of securities as an estimate of the fair value of its ordinary shares. After the closing of the Merger, the fair value of the Company’s Common Stock is used to estimate the fair value of the stock-based awards at grant date. The following table summarizes stock option activity under the Company’s stock option plan: Number of Shares Weighted- Average Exercise Price per Share, $ Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding – January 1, 2019 3,273,750 3.71 4.58 $ 23,283 Options granted 173,842 7.80 Options exercised (175,736 ) 2.02 Options forfeited/cancelled (196,951 ) 10.94 Options assumed through business combination 203,534 29.97 Outstanding - December 31, 2019 3,278,439 5.29 5.08 $ 4,885 Exercisable – December 31, 2019 2,727,764 4.44 4.37 $ 4,885 Expected to vest – after December 31, 2019 550,675 9.50 8.61 $ - The following tables summarize information about share options outstanding and exercisable at December 31, 2019: Options Outstanding Options Exercisable Exercise Price Range Number Weighted average remaining contractual term (years) Weighted average Exercise Price Options exercisable Weighted average remaining contractual term (years) Weighted average Exercise Price $0.15 - $3.60 1,890,312 3.23 $ 2.12 1,890,312 3.23 $ 2.12 $5.25 - $12.00 1,219,339 7.73 6.77 717,111 7.33 6.21 $12.45 - $26.10 89,542 6.14 22.38 63,804 5.61 24.13 $26.70 - $33.00 55,335 2.60 27.05 40,507 2.87 27.18 $36.00 - $94.65 23,911 6.97 66.38 16,030 6.54 63.51 3,278,439 5.08 $ 5.29 2,727,764 4.37 $ 4.44 The aggregate intrinsic value of options is calculated as the difference between the exercise price of the stock options and the fair value of the Company’s common stock for those options that had exercise prices lower than the fair value of the Company’s common stock. The total intrinsic value of options exercised were $1,532 and $574 for the years ended December 31, 2019 and 2018, respectively. The weighted-average grant date fair value of options granted was $5.50 and $5.85 per share for the years ended December 31, 2019 and 2018, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The geographical breakdown of loss before provision for income taxes is as follows: Year Ended December 31, 2019 2018 United States $ (23,194 ) $ (6,260 ) Other jurisdictions (17,244 ) (5,734 ) Loss before income taxes $ (40,438 ) $ (11,994 ) The components of the provision for income taxes are as follows: Year Ended December 31, 2019 2018 Current tax provision: Federal $ — $ 1,291 Foreign 2,989 562 State — (74 ) Total current tax provision 2,989 1,779 Deferred tax provision (benefit): Federal — 851 Foreign (1,132 ) (626 ) State — 211 Total deferred tax provision (benefit) $ (1,132 ) $ 436 Total provision for income taxes $ 1,857 $ 2,215 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided when it is more likely than not that the deferred tax assets will not be realized. The Company has established a valuation allowance in the U. S. and its foreign subsidiaries to offset net deferred tax assets for all periods presented due to the uncertainty of realizing future tax benefits from net operating loss carryforwards and other deferred tax assets. The valuation allowance increased by $54,049 and $2,433 for the years ended December 31, 2019 and 2018 respectively. The increases in valuation allowance in 2019 was due to the Merger and assumption of their losses as well as ongoing operational losses in both years. On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted into law making significant changes to the Internal Revenue Code (the “IRC”). Changes include, but are not limited to, a federal corporate tax rate decrease from 35% to 21% for tax years beginning after December 31, 2017, the transition of U.S. international taxation from a worldwide tax system to a territorial system and a one-time transition tax on the mandatory deemed repatriation of foreign earnings. ASC 740 requires the Company to recognize the effect of the tax law changes in the period of enactment. However, the SEC staff has issued SAB 118 which will allow the Company to record provisional amounts during the measurement period. The Company’s effective tax rate substantially differed from the federal statutory tax rate primarily due to the change in the valuation allowance. The reconciliation between income taxes computed at the federal statutory income tax rate and the provision for income taxes is as follows: Year Ended December 31, 2019 2018 Loss before income taxes $ (40,438 ) $ (11,994 ) Theoretical tax benefit at the statutory rate (23.9% in 2019, 23.6% in 2018) (9,665 ) (2,827 ) Differences in jurisdictional tax rates (337 ) 211 Recognition of losses (1,923 ) 467 Valuation allowance 12,343 2,433 Non-deductible expenses 2,217 1,931 Other (778 ) — Total income tax benefit 1,857 2,215 Net loss $ (42,295 ) $ (14,209 ) The components of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2019 2018 Deferred tax assets: Accrued vacation $ — $ 22 Property and equipment 81 4 Accrued severance pay — 88 Deferred revenue 101 — Allowance for doubtful accounts 440 — Accrued warranty — 183 Loss carryforwards 56,154 6,739 Valuation allowance (56,154 ) (6,739 ) Total deferred tax assets $ 622 $ 297 Deferred tax liabilities: Deferred revenue $ 1,017 $ 1,774 Acquisition related intangible assets — 119 Total deferred tax liabilities $ 1,017 $ 1,893 As of December 31, 2019, the Company had federal and state non-operating loss (“NOL”) carryforwards of approximately $228,396 ( $27,631 in 2018) We may recognize the tax benefit from uncertain tax positions only if it is more likely than not that the tax position will be sustained upon examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. ASC 740 also provides guidance on de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and income tax disclosures. During the year we determined that $622 of future tax benefits met this criterion. Utilization of the research and development credits carryforwards may be subject to an annual limitation due to the ownership percentage change limitations provided by the IRC. However, the Company has not conducted a formal study to determine the extent of the limitations, which could impact the realizability of these credit carryforwards in future periods. The annual limitations may result in the expiration of the net operating losses and research and development credits before utilization. Uncertain Tax Positions The activity related to gross amount of unrecognized tax benefits is as follows: Year Ended December 31, 2019 2018 Balance as of the beginning of the year $ 1,467 $ 1,362 Increases related to tax positions in prior period — 8 Increases related to tax positions taken during the current period — 97 Balance at the end of the year $ 1,467 $ 1,467 These amounts are related to certain deferred tax assets with a corresponding valuation allowance. If recognized, the impact on the Company’s effective tax rate would not be material due to the full valuation allowance. Management believes that there will not be any significant changes in the Company’s unrecognized tax benefits in the next twelve-months. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes in the accompanying consolidated statement of operations. Accrued interest and penalties, if applicable, are included in accrued expenses and other current liabilities in the consolidated balance sheets. For the years ended December 31, 2019 and 2018, the Company did not recognize any accrued interest and penalties. The Company files income tax returns in the United States and in various state jurisdictions with varying statutes of limitations. Tax years 2002 through 2018 remain open to examination by the United States and various state jurisdictions. The Company is currently under examination by the Internal Revenue Service for its 2017 taxation year but not under examination in any other jurisdiction for any year. |
Accrued Severance Pay and Sever
Accrued Severance Pay and Severance Pay Funds | 12 Months Ended |
Dec. 31, 2019 | |
Restructuring Charges [Abstract] | |
Accrued Severance Pay and Severance Pay Funds | 16. Accrued severance pay and severance pay funds The Company’s liability for severance pay in Israel is calculated pursuant to Israeli severance pay law based on the most recent salary of each employee multiplied by the number of years of employment as of the consolidated balance sheet date. The Company’s liability to all employees is funded by monthly deposits to severance pay funds and insurance policies. The deposited funds include an accumulated gain up to the consolidated balance sheet date. The total amount of unrealized gains on the deposited funds amounted to $36 ($12 in 2018). The deposited funds may be withdrawn by the employee pursuant to Israeli severance pay law the orders, permits, and regulations. The value of the deposited funds is based on the cash surrender value of the policies. |
Segment and Geographic Informat
Segment and Geographic Information | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment and Geographic Information | 17. SEGMENT AND GEOGRAPHIC INFORMATION Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (CODM) in deciding how to allocate resources to an individual segment and in assessing performance. The Company's CODM is its Chief Executive Officer. The Company has determined it operates in a single operating segment and has one reportable segment, as the CODM reviews financial information presented on a consolidated basis accompanied by disaggregated information about revenues by geography and type for purposes of making operating decisions, allocating resources, and evaluating financial performance. The Company does not assess the performance of individual product line on measures of profit or loss, or asset-based metrics. Therefore, the information below is presented only for revenues by geography and type. Revenue by geographic location, which is based on the product shipped to location, is summarized as follows: Year Ended December 31, 2019 2018 United States $ 47,723 $ 46,311 International 62,683 56,303 Total revenue $ 110,406 $ 102,614 As of December 31, 2019, and 2018, substantially all long-lived assets were located in Israel. Revenue by type is a key indicator for providing management with an understanding of the Company’s financial performance, which is organized into four different categories: 1. Lease revenue - includes all system sales with typical lease terms of 36 months. 2. System revenue – includes all systems sales with payment terms within 12 months. 3. Product revenue – includes skincare, hair and other consumables payable upon receipt. 4. Service revenue - includes NeoGraft® technician services, ad agency services and extended warranty sales. The following table presents revenue by type: Year Ended December 31, 2019 2018 Lease revenue $ 65,170 $ 71,540 System revenue 31,730 23,454 Product revenue 6,030 4,412 Service revenue 7,476 3,208 Total revenue $ 110,406 $ 102,614 |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 18. RELATED PARTY TRANSACTIONS All amounts were at recorded at the exchange amount, which is the amount established and agreed to by the related parties. The following are transactions between the Company and parties related through employment. Services Agreement In 2016, Ipsum Management (S) Pte. Ltd. (“Ipsum”) began providing marketing and sales support services to the Company’s subsidiary in Singapore. One of the senior executives of the Company is the sole shareholder of Ipsum. For the year ended December 31, 2019, the fees charged by Ipsum were $35. For the year ended December 31, 2018, the fees charged by Ipsum were $44. These amounts are reported as part of general and administrative expenses. No amounts were outstanding as at December 31, 2019 and December 31, 2018. Non-Interest Demand Loan to PT Neoasia Medical On July 1, 2016, a senior manager of the Company transferred 100.0% of his shares in Inphronics Limited to the Company, making it a wholly-owned subsidiary. At such time, an unsecured non-interest-bearing working capital loan to PT Neoasia Medical, a subsidiary of Inphronics Limited, that was previously provided by the senior manager of the Company was outstanding. As of December 31, 2019 and December 31, 2018, the outstanding amount of the loan was Indonesian rupiah (“IDR”) 6.9 billion, which is equivalent to $498 and $477, respectively. This loan is reported as part of accrued expenses and other current liabilities. Distribution agreements On January 1, 2018, the Company entered into a new Distribution Agreement with Technicalbiomed Co., Ltd. (“TBC”), pursuant to which TBC will continue to distribute the Company’s products in Thailand. A senior manager of the Company is a 30.0% shareholder of TBC. For the years ended December 31, 2019 and 2018, TBC purchased products in the amount of $378 and $330, respectively, under this distribution agreement. These sales are included in products and services revenue. Intellectual Property Transfer Agreement In August 2013, the Company entered into a license agreement for the rights to an invention for fractional radio frequency treatment of the skin with the developers of the technology. Pursuant to the license agreement, the developers, amongst which one is a senior executive of the Company, granted to the Company an exclusive worldwide, perpetual, irrevocable license to develop and commercialize their inventions and any product into which it is integrated. As consideration for such license, the Company agreed to pay the developers 7.0% of the gross income received by the Company from sales of the Venus Viva system and the related consumables and $1.50 per Venus Versa system, up to an aggregate amount of $3,000. For the years ended December 31, 2019 and 2018, the Company paid approximately $806 and $382, respectively, in royalties and reported the amounts under research and development expenses in the consolidated financial statements. As of December 31, 2019 and December 31, 2018, $nil and $101, respectively, was outstanding and reported as part of trade payables. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | 19. SUBSEQUENT EVENTS In December 2019, an outbreak of a novel strain of coronavirus originated in Wuhan, China, and has since spread to a number of other countries, including the United States. To date, this outbreak has already resulted in extended shutdowns of certain businesses in China, Europe, the United States and other countries. Global health concerns, such as the coronavirus, could also result in social, economic, and labor instability in the countries in which we or the third parties with whom we engage operate. We cannot presently predict the scope and severity or duration of any potential business shutdowns or disruptions, but if we or any of the third parties with whom we engage, including our suppliers, manufacturers, customers, regulators and other third parties with whom we conduct business, experience shutdowns or other business disruptions, our ability to conduct our business in the manner presently planned could be materially and negatively affected. Disruptions to our business could include restrictions on the ability of our sales and marketing personnel and distributors to travel and sell our systems, disruptions of our global supply chain, reduced demand and/or suspension of operations by our customers which could impact their ability to make monthly payments, or deferral of aesthetic or hair restoration procedures in impacted areas. In addition, the outbreak of contagious diseases or the fear of such an outbreak could adversely affect the economies and financial markets of many countries, resulting in an economic downturn that could affect the demand for our systems. Any of these events could negatively impact our business, operating results or financial condition. On March 5, 2020, the Company’s Board of Directors approved declaration and distribution of dividends from Venus Concept Singapore Pte. Ltd in the amount of 400 Singapore dollars (“SDG”), which is equivalent to $289. The Chief Operating Officer (“COO”) of the Company is an existing shareholder of Venus Concept Singapore Pte. Ltd., therefore this transaction was approved by the Audit Committee as a related party transaction. On March 18, 2020 the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with certain investors (collectively, the “Investors”) pursuant to which the Company issued and sold to the Investors an aggregate of 2,300,000 shares of common stock, 660,000 which are convertible into 6,600,000 shares of common stock, and warrants to purchase up to 6,675,000 shares of common stock with an exercise price of $3.50 per share (the “2020 Private Placement”). The warrants have a five-year term and are exercisable beginning 181 days after their issue date. The Series A Preferred Stock will automatically convert into shares of common stock upon receipt of stockholder approval. The Series A Preferred Stock has no voting rights other than as required by law. The gross proceeds to the Company from the 2020 Private Placement are $22.25 million, before placement agent fees and other offering expenses. EW Healthcare Partners (“EW”) and HealthQuest Capital (“HQ”), existing stockholders of the Company, participated in the 2020 Private Placement. One director of the Company is affiliated with EW and another with HQ, and therefore On March 20, 2020, the Company entered into a Second Amended and Restated Loan Agreement as a borrower with CNB, as amended, (the “CNB Credit Facility”), pursuant to which CNB agreed to make certain loans and other financial accommodations to the Company, and certain of its subsidiaries. In connection with the CNB Credit Facility, the Company also entered into (i) a Second Amended and Restated Guaranty of Payment and Performance with CNB dated as of March 20, 2020, (the “CNB Guaranty”), pursuant to which the Company agreed to guaranty the obligations under the CNB Credit Facility and (ii) a Security Agreement with CNB dated as of March 20, 2020, (the “CNB Security Agreement”), pursuant to which the Company agreed to grant CNB a security interest, in substantially all of its assets, to secure the obligations under the CNB Credit Facility. Borrowings under the CNB Credit Facility are secured by substantially all of the assets of the Company and its subsidiaries and the CNB Guaranty. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). |
Principles of Consolidation | Principles of Consolidation The accompanying consolidated financial statements include the accounts of Venus Concept Inc. and its wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated on consolidation. Where the Company does not own 100% of its subsidiaries, it accounts for the partial ownership interest through non-controlling interest. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates and assumptions made in the accompanying consolidated financial statements include, but are not limited to, the implicit interest rate used to record lease revenue, allowance for doubtful accounts, inventory valuation, stock-based compensation, warranty accrual, the valuation and measurement of deferred tax assets and liabilities, accrued severance pay, useful lives of property and equipment, earn-out liability, useful lives of intangible assets, impairment of long-lived assets and goodwill and valuation of acquired intangible assets and goodwill. The Company evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. Actual results could materially differ from those estimates. |
Foreign Currency | Foreign Currency The consolidated financial statements are presented in U.S. dollars. The Company and its subsidiaries’ functional currency is the U.S. dollar as determined by management. All exchange gains and losses from remeasurement of monetary balance sheet items resulting from transactions in non-functional currencies are recorded in the consolidated statements of operations as they arise. In respect of transactions denominated in currencies other than the Company and its subsidiaries’ functional currencies, the monetary assets and liabilities are remeasured at the period end rates. Revenue and expenses are remeasured at rates of exchange prevailing on the transaction dates. All of the exchange gains or losses resulting from these transactions are recognized in the consolidated statements of operations. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with an original maturity of three months or less from the date of purchase to be cash equivalents. Cash and cash equivalents consist primarily of funds invested in readily available checking and savings accounts, investments in money market funds and short-term time deposits. |
Restricted Cash | Restricted Cash As of December 31, 2019, and 2018, the Company was required to hold $83 and $19, respectively, in a separate deposit account as collateral for rent and credit cards. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to a concentration of credit risk consist of cash and cash equivalents, accounts receivable and long-term receivables. The Company’s cash and cash equivalents are invested primarily in deposits with major banks worldwide, as such minimal credit risk exists with respect to such investments. The Company’s trade receivables are derived from global sales to customers. An allowance for doubtful accounts is provided with respect to all balances for which collection is deemed to be doubtful. |
Risks and Uncertainties | Risks and Uncertainties The Company’s future results of operations involve a number of risks and uncertainties. Factors that could affect the Company’s future operating results and cause actual results to vary materially from expectations include, but are not limited to, rapid technological change, continued acceptance of the Company’s products, competition from substitute products and larger companies, protection of proprietary technology, strategic relationships and dependence on key individuals. If the Company fails to adhere to ongoing Food and Drug Administration (“FDA”) Quality System Regulation, or regulations in countries other than the United States, FDA or other regulators may withdraw its market clearances or take other action. The Company relies on suppliers to manufacture some of the components used in its products. The Company’s suppliers may encounter supply interruptions or problems during manufacturing due to a variety of reasons, including failure to comply with applicable regulations, including FDA’s Quality System Regulation, making errors in manufacturing or losing access to critical services and components, any of which could delay or impede the Company’s ability to meet demand for its products. The Company has borrowings with interest rates that are subject to fluctuations as charged by the lender. The Company does not use derivative financial instruments to mitigate the exposure to interest rate risk. The Company’s objective is to have sufficient liquidity to meet its liabilities when due. The Company monitors its cash balances and cash used in operating activities to meet its requirements. As at December 31, 2019 and 2018, the most significant financial liabilities are the line of credit, trade payables, accrued expenses and other current liabilities, earn-out liability and long-term debt. |
Concentration of Customers | Concentration of Customers For the years ended December 31, 2019 and 2018, there were no customers accounting for more than 10% of the Company’s revenue. As of December 31, 2019 and 2018, there were no customers accounting for more than 10% of the Company’s accounts receivable. |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts Accounts receivable do not bear interest and are typically not collateralized. The Company performs ongoing credit evaluations of its customers’ financial condition and maintains an allowance for doubtful accounts. Uncollectible accounts are charged to expense when deemed uncollectible, and accounts receivable are presented net of an allowance for doubtful accounts. Accounts receivable are deemed past due in accordance with the contractual terms of the agreement. Actual The allowance for doubtful accounts consisted of the following activity for years ended December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 Balance at beginning of year $ 4,408 $ 2,417 Write-offs (3,905 ) (8,937 ) Provision 9,991 10,928 Balance at end of year $ 10,494 $ 4,408 |
Inventory | Inventory Inventories are stated at the lower of cost or net realizable value and include raw materials, work in progress and finished goods. Cost is determined as follows: Raw Materials and Work in Progress (“WIP”) – Cost is determined on a standard cost basis utilizing the weighted average cost of historical purchases, which approximates actual cost. The cost of WIP and finished goods includes the cost of raw materials and the applicable share of the cost of labor and fixed and variable production overheads. The Company regularly evaluates the value of inventory based on a combination of factors including the following: historical usage rates, product end of life dates, technological obsolescence and product introductions. The Company includes demonstration units within inventories. Proceeds from the sale of demonstration units are recorded as revenue. |
Long-term Receivables | Long-term Receivables Long-term receivables relate to the Company’s subscription revenue or contracts which stipulate payment terms which exceed one year. They are comprised of the unpaid principal balance, plus accrued interest, net of the allowance for credit losses. These receivables have been discounted based on the implicit interest rate in the subscription lease which range between 8% to 9% in 2019 and 8% to 9% in 2018. Unearned interest revenue represents the interest only portion of the respective subscription payments and will be recognized in income over the respective payment term as it is earned. Deferred revenues represent payments received prior to the income being earned. Once the equipment has been delivered or the services have been rendered, these amounts are recognized in income. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is between three and ten years. Leasehold improvements are depreciated over the lesser of the life of the lease or the useful life of the improvements. Maintenance and repairs are charged to expense as incurred. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the consolidated balance sheets, and any resulting gain or loss is reflected in consolidated statements of operations. |
Intangible Assets | Intangible Assets Intangible assets consist of customer relationships, brand, technology and supplier agreement. Intangible assets are stated at cost less accumulated amortization. Amortization is computed using the straight-line method over the estimated useful lives of the respective assets, which range from approximately six to fifteen years. The useful lives of intangible assets are based on the Company’s assessment of various factors impacting estimated cash flows, such as the product’s position in its lifecycle, the existence or absence of like products in the market, various other competitive and regulatory issues, and contractual terms. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets The Company accounts for the impairment of long-lived assets in accordance with FASB, Accounting Standards Codification (“ASC”) 360-10, “Accounting for the Impairment of Long-Lived Assets”. This standard requires that long-lived assets be reviewed for impairment whenever events or changes in circumstances indicate that the assets’ carrying amounts may not be recoverable. For assets that are to be held and used, impairment is assessed when the estimated undiscounted cash flows associated with the asset or group of assets is less than their carrying values. If impairment exists, an adjustment is made to write the asset down to its fair value, and a loss is recorded as the difference between the carrying value and fair value. Fair values are determined based on quoted market values, discounted cash flows or internal and external appraisals, as applicable. Assets to be disposed of are carried at the lower of carrying value and estimated net realizable value. During the years ended December 31, 2019 and 2018, there was no impairment of long-lived assets. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price of the business acquired over the fair value of the net identifiable assets of an acquired business. The Company allocates goodwill to reporting units at the time of acquisition or when there is a change in the reporting structure and bases that allocation on which reporting units will benefit from the acquired assets and liabilities. Reporting units are defined as operating segments or one level below an operating segment, referred to as a component. Goodwill is not amortized but is tested for impairment annually or more frequently when an event occurs, or circumstances change that indicate the carrying value may not be recoverable. In testing goodwill for impairment, the Company elected to utilize a qualitative assessment to evaluate whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment indicates that goodwill impairment is more likely than not, a two-step impairment test is performed. Under the two-step impairment test, the carrying value of the reporting unit is compared to the fair value of the reporting unit. If the fair value is determined to be less than the carrying value, the Company performs a second step to compute the amount of impairment as the difference between the implied fair value of goodwill and the carrying value. Fair value of a reporting unit is estimated using discounted cash flows. Forecasts of future cash flows are based on the Company’s best estimate of future net sales and operating expenses. Required annual testing of goodwill for impairment was completed for the reporting unit as of December 31, 2019 and determined that goodwill is not impaired. |
Debt Issuance Costs | Debt Issuance Costs Costs related to the issuance of debt are presented as a direct deduction to the carrying value of the debt and are amortized to accretion expense using the effective interest rate method over the term of the related debt. |
Revenue Recognition | Revenue Recognition The Company adopted Accounting Standards Codification (“ASC”) 606 “Revenue from contract with customers” The Company generates revenue from (1) sales of systems through the subscription model, traditional system sales to customers and distributors, (2) other product revenues from the sale of marketing supplies and kits, consumables and Venus Concept’s skincare and hair products and (3) service revenue from the sale of VeroGrafters ™ Many of the Company’s products are sold under subscription contracts with control passing to the customer at the earlier of the end of the term and when the payment is received in full. The subscription contracts include an initial deposit followed by monthly installments typically over a period of 36 months. In accordance with ASC 840 “Leases” (“ASC 840”), these arrangements are considered to be sales-type leases, where the present value of all cash flows to be received within the arrangement is recognized upon shipment to the customer and achievement of the required revenue recognition criteria. Various accounting and reporting systems are used to monitor subscription receivables which include providing access codes to operate the machines to paying customers and restricting access codes on machines to non-paying customers The Company recognizes revenues on other products and services in accordance with ASC 606. Revenue is recognized based on the following five steps: (1) identification of the contract(s) with the customer; (2) identification of the performance obligations in the contract; (3) determine the transaction price; and (4) allocate the transaction price to the separate performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. The Company does not grant rights of return to its end customers. The Company’s products sold through arrangements with distributors are non-refundable, non-returnable and without any rights of price protection. The Company records revenue net of sales tax and shipping and handling costs. |
Cost of Goods | Cost of Goods For subscription sales (qualifying as sales-type lease arrangements) and product sales, the costs are recognized upon shipment to the customer or distributor. |
Advertising Costs | Advertising Costs The cost of advertising and media is expensed as incurred. For the years ended December 31, 2019 and 2018, advertising costs totaled $2,004 and $1,225, respectively. |
Research and Development | Research and Development Research and development costs are charged to operations as incurred. Major components of research and development expenses consist of personnel costs, including salaries and benefits, hardware and software research and development costs, regulatory affairs, and clinical costs. |
Warranty | Warranty The Company provides a standard warranty against defects for all of its systems. The warranty period begins upon shipment and is typically for a period between one and three years. The Company records a liability for accrued warranty costs at the time of sale of a system, which consists of the warranty on products sold based on historical warranty costs and management’s estimates. The Company periodically assesses the adequacy of its recorded warranty liabilities and adjusts the amounts thereof as necessary. The Company also provides an extended warranty service. Extended warranty can be purchased at any time after the purchase of a system and prior to the expiration of the standard warranty provided with the sale of the system. Extended warranty services include standard warranty services. The Company recognizes the revenue from the sale of an extended warranty over the period of the extended warranty and accounts it for separately from the standard warranty. |
Income Taxes | Income Taxes The Company follows the deferred income taxes method of accounting for income taxes. Under this method, deferred income taxes are recognized for the future tax consequences attributable to differences between the financial statement carrying values of accounts and their respective income tax basis. Deferred income tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years during which the temporary differences are expected to be realized or settled. The effect on deferred income tax assets and liabilities of a change in tax rates is included in income in the period that includes the enactment date. The Company establishes valuation allowances when necessary to reduce deferred tax assets to the amounts that are more likely than not to be realized. The Company evaluates tax positions taken or expected to be taken in the course of preparing tax returns to determine whether the tax positions have met a “more likely-than-not” threshold of being sustained by the applicable tax authority. Tax benefits related to tax positions not deemed to meet the “more likely-than-not” threshold are not permitted to be recognized in the consolidated financial statements. Uncertain Tax Positions The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained on examination based on the technical merit of the position. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not that the position will be sustained on examination, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement. The Company considers many factors when evaluating and estimating its tax positions and tax benefits, which may require periodic adjustments. The Company recognizes interest charges and penalties related to unrecognized tax benefits as a component of the tax provision. |
Business Combinations | Business Combinations The consideration for each acquisition is measured at the aggregate of the fair values of assets acquired, liabilities incurred or assumed, and equity instruments issued by the Company in exchange for control of the acquired company. Acquisition-related costs are recognized in operations as incurred in general and administrative expenses. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition as soon as all necessary information is obtained where it qualifies as measurement period adjustments within one year from closing. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with ASC 718, “Compensation – Stock Compensation” (“ASC 718”). ASC 718 requires companies to estimate the fair value of equity-based payment awards on the date of grant. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service period in the Company’s consolidated statements of operations. The fair value of stock options (“options”) on the grant date is estimated using the Black-Scholes option-pricing model using the single-option approach. The Black-Scholes option pricing model requires the use of highly subjective and complex assumptions, including the option’s expected term and the price volatility of the underlying stock, to determine the fair value of the award. The Company recognizes compensation expenses for the value of its awards granted based on the straight-line method over the requisite service period of each of the awards. The Company has made a policy choice to account for forfeitures when they occur. Stock options granted to non-employees are based on the fair value on the grant date and re-measured at the end of each reporting period based on the fair value until the earlier of the options being fully vested and completion of the performance obligations. These are subject to a service vesting condition and are recognized on a straight-line method over the requisite service period. Forfeitures are estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Estimated forfeitures are based on historical pre-vesting forfeitures. |
Net Loss Per Share | Net Loss Per Share The Company computes net (loss) income per share in accordance with ASC Topic 260, “Earnings Per Share” (“ASC 260”) and related guidance, which requires two calculations of net (loss) income attributable to the Company’s shareholders per share to be disclosed: basic and diluted. Convertible preferred shares are participating securities and are included in the calculation of basic and diluted net (loss) income per share using the two-class method. In periods where the Company reports net losses, such losses are not allocated to the convertible preferred shares for the computation of basic or diluted net (loss) income. Diluted net (loss) income per share is the same as basic net (loss) income per share for the periods in which the Company had a net loss because the inclusion of outstanding common stock equivalents would be anti-dilutive. |
Jobs Act Accounting Election | JOBS Act Accounting Election The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
Recently Issued Accounting Standards Not Yet Adopted | Recently Issued Accounting Standards Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which was subsequently amended by ASU 2018-11, Leases (Topic 842): Targeted Improvements, ASU 2018-20, Narrow-Scope Improvements for Lessors and ASU 2019-01, Leases (Topic 842): Codification Improvements. The guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and requiring more disclosures related to leasing transactions. The amendments in this update are effective for fiscal years, and interim periods within those years, beginning after December 15, 2018. Early adoption is permitted. On November 15, 2019, the FASB issued ASU 2019-10, which (1) provides a framework to stagger effective dates for future major accounting standards and (2) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, ASU 2019-10 changes some effective dates for certain new standards on the following topics in the FASB ASC, including Topic 842, Topic 326 (Financial Instruments — Credit Losses) and Topic 350 (Intangibles — Goodwill and Other). As an emerging growth company, the Company elected to use private company adoption date for ASC 842, which is January 1, 2021. The Company is in the process of determining the impact of Topic 842 on its consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40), relating to a customer’s accounting for implementation, set-up, and other upfront costs incurred in a cloud computing arrangement that is hosted by a vendor (i.e., a service contract). Under the new guidance, a customer will apply the same criteria for capitalizing implementation costs as it would for an arrangement that has a software license. The new guidance also prescribes the balance sheet, income statement, and cash flow classification of the capitalized implementation costs and related amortization expense and requires additional quantitative and qualitative disclosures. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2020, and interim periods within annual periods beginning after December 15, 2021. Early application is permitted. The Company can choose to adopt the new guidance (1) prospectively to eligible costs incurred on or after the date this guidance is first applied or (2) retrospectively. The Company is evaluating the impact, if any, that this pronouncement will have on the consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement, which removes, adds and modifies certain disclosure requirements for fair value measurements in Topic 820. The Company will no longer be required to disclose the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, and the valuation processes of Level 3 fair value measurements. However, the Company will be required to additionally disclose the changes in unrealized gains and losses included in other comprehensive income (loss) for recurring Level 3 fair value measurements, and the range and weighted average of assumptions used to develop significant unobservable inputs for Level 3 fair value measurements. The ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The amendments relating to additional disclosure requirements will be applied prospectively for only the most recent interim or annual period presented in the initial year of adoption. All other amendments will be applied retrospectively to all periods presented upon their effective date. The Company anticipates that the adoption of Topic 820 will not have a material impact on the Company’s consolidated financial statements. In June 2018, the FASB issued ASU 2018-07, Improvements to Nonemployee Share-Based Payment Accounting, which simplifies guidance on non-employee share-based payments. This expands the scope of ASC 718, Compensation—Stock Compensation (Topic 718), to include all share-based payment arrangements related to the acquisition of goods and services from both non-employees and employees. As a result, most of the guidance in ASC 718 associated with employee share-based payments, applies to non-employee share-based payment arrangements. The ASU amendment is effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company anticipates that the adoption of Topic 718 will not have a material impact on the Company’s consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. This standard introduced the expected credit losses methodology for the measurement of credit losses on financial assets that are not measured at fair value through net income and replaces today’s “incurred loss” model with an “expected credit loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the asset. There have been several consequential subsequent amendments to this standard. This standard is effective for annual periods beginning after January 1, 2023, including interim periods within those fiscal years. The Company is evaluating the impact, if any, that this pronouncement will have on the consolidated financial statements. |
Nature of Operations (Tables)
Nature of Operations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Statement Of Financial Position [Abstract] | |
Summary of Restatement Adjustments on Previously Reported Consolidated Financial Statements | The following table summarizes the impact of the restatement adjustments on Venus Concept Ltd.’s previously reported consolidated financial statements: As previously reported Adjustment As restated $ $ $ Consolidated balance sheet and consolidated statement of stockholders' equity January 1, 2018 Common Stock 49,978 (49,973 ) 5 Additional paid in capital 10,075 49,973 60,048 December 31, 2018 Common Stock 57,101 (57,096 ) 5 Additional paid in capital 10,399 57,096 67,495 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Accounting Policies [Abstract] | |
Summary of Allowance for Doubtful Accounts | The allowance for doubtful accounts consisted of the following activity for years ended December 31, 2019 and 2018 (in thousands): As of December 31, 2019 2018 Balance at beginning of year $ 4,408 $ 2,417 Write-offs (3,905 ) (8,937 ) Provision 9,991 10,928 Balance at end of year $ 10,494 $ 4,408 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Diluted Net Loss and Weighted Average Number of Shares Used in Computing Basic and Diluted Net Loss Per Share | The following table sets forth the computation of basic and diluted net loss and the weighted average number of shares used in computing basic and diluted net loss per share (in thousands, except per share data): For the year ended December 31, 2019 2018 Numerator: Net loss $ (42,295 ) $ (14,209 ) Net loss allocated to stockholders of the Company $ (40,619 ) $ (14,959 ) Denominator: Weighted-average shares of common stock outstanding used in computing net loss per share, basic and diluted 8,517 4,733 Net loss per share: Basic and diluted $ (4.77 ) $ (3.16 ) |
Outstanding Shares of Common Stock Equivalents Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders | Due to the net loss, all the outstanding shares of common stock equivalents were excluded from the calculation of diluted net loss per share attributable to common stockholders for the years ended December 31, 2019 and 2018 because including them would have been antidilutive : December 31, 2019 2018 Options to purchase common stock 2,727,764 2,355,258 Warrants for common stock 3,990,067 179,932 Total potential dilutive shares 6,717,831 2,535,190 |
Business Combinations (Tables)
Business Combinations (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of Revenue, Net Loss and Net Loss Per Share | The Company’s consolidated net revenue, net loss and net loss per share for the year ended December 31, 2019 include the following amounts of revenue, net loss and net loss per share of Restoration Robotics, Inc. since the Merger date: Year ended December 31, 2019 Total net revenues $ 2,775 Net loss $ (4,668 ) Net loss per share, basic and diluted $ (0.55 ) |
Schedule of Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information presents the combined results of operations of the Company as if the Merger had occurred on January 1, 2018. The unaudited pro forma financial information is not necessarily indicative of what the Company’s consolidated results of operations actually would have been had the Merger occurred at the beginning of each year. In addition, the unaudited pro forma financial information does not attempt to project the future results of operations of the combined Company. Year ended December 31, 2019 2018 Total net revenues $ 123,263 $ 124,570 Net loss $ (52,976 ) $ (45,226 ) |
Schedule of Weighted Average Life of Intangibles Acquired | The weighted average life remaining on the intangibles acquired as a result of both business combinations are as follows: Intangible asset category: (in years) Customer relationships 14 Brand 9 Technology 6 Supplier agreement 9 |
Venus Concept Ltd. | |
Schedule of Purchase Price Allocated to Fair Value of Assets and Liabilities Acquired | The purchase price is allocated to the fair value of assets and liabilities acquired as follows: Number of shares of the combined company to be owned by Venus Concept Inc. shareholders 2,802,466 Multiplied by the price per share of Venus Concept Inc. common stock $ 5.6055 The fair value of Venus Concept Inc. common stock $ 15,709 The value of fully and partially vested stock options and warrants 121 Pre-existing relationships with Venus Concept Ltd. 4,558 Total purchase consideration $ 20,388 Net assets acquired Cash and cash equivalents and restricted cash $ 7,409 Other current assets 9,308 Property and equipment 1,268 Technology 16,900 Brand 1,200 Goodwill 24,847 Other non-current assets 100 Current liabilities (12,909 ) Long-term debt, including current portion (27,505 ) Other non-current liabilities (230 ) Fair value of net assets acquired $ 20,388 |
NeoGraft Solutions, Inc | |
Schedule of Purchase Price Allocated to Fair Value of Assets and Liabilities Acquired | The purchase price is allocated to the fair value of assets and liabilities acquired as follows: Cash on closing $ 7,502 Installment payments 500 Contingent earn-out payments 677 Total purchase price $ 8,679 Net assets acquired Inventory $ 1,315 Accounts receivable 44 Property and equipment 7 Accounts payable (990 ) Customer relationships 1,400 Brand 1,300 Supplier agreement 3,000 Fair value of net assets acquired $ 6,076 Goodwill $ 2,603 |
Fair Value Measurements - (Tabl
Fair Value Measurements - (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of Level 2 and Level 3 Financial Assets and Liabilities | The following tables set forth the fair value of the Company’s Level 2 and Level 3 financial assets and liabilities within the fair value hierarchy: Fair Value Measurements as of December 31, 2019 Quoted Prices in Active Markets using Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Guaranteed Investment Certificates ("GIC") $ — $ 63 $ — $ 63 Restricted cash — 83 — 83 Total assets $ — $ 146 $ — $ 146 Liabilities Long-term debt $ — $ — $ 61,351 $ 61,351 Contingent earn-out consideration — — 655 655 Total liabilities $ — $ — $ 62,006 $ 62,006 Fair Value Measurements as of December 31, 2018 Quoted Prices in Active Markets using Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Guaranteed Investment Certificates ("GIC") $ — $ 81 $ — $ 81 Restricted cash — 19 — 19 Total assets $ — $ 100 $ — $ 100 Liabilities Long-term debt $ — $ — $ 56,401 $ 56,401 Contingent earn-out consideration — — 950 950 Total liabilities $ — $ — $ 57,351 $ 57,351 |
Schedule Aggregate Fair Values of Earn-out Liability | The following table provides a roll forward of the aggregate fair values of the earn-out liability as of December 31, 2019, for which fair value is determined using Level 3 inputs: Beginning balance $ 1,177 Payments (227 ) December 31, 2018 950 Payments (828 ) Change in value 533 December 31, 2019 $ 655 |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Receivables [Abstract] | |
Summary of Accounts Receivables | A summary of the Company’s accounts receivables is presented as follows: As of December 31, 2019 2018 Gross accounts receivable $ 105,127 $ 78,962 Unearned income (5,623 ) (5,601 ) Allowance for doubtful accounts (10,494 ) (4,408 ) $ 89,010 $ 68,953 Reported as: Current trade receivables $ 58,977 $ 35,314 Current unearned interest income (3,942 ) (3,849 ) Long-term trade receivables 35,656 39,240 Long-term unearned interest income (1,681 ) (1,752 ) $ 89,010 $ 68,953 |
Schedule of Contractual Commitments, Net of Allowance for Doubtful Accounts | The following are the contractual commitments, net of allowance for doubtful accounts, to be received by the Company over the next 5 years: December 31, Total 2020 2021 2022 2023 2024 Current financing receivables, net of allowance of $2,960 $ 37,197 $ 37,197 $ — $ — $ — $ — Long-term financing receivables, net of allowance of $2,818 35,405 — 25,701 9,527 177 — $ 72,602 $ 37,197 $ 25,701 $ 9,527 $ 177 $ — |
Select Balance Sheet and Stat_2
Select Balance Sheet and Statement of Operations Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Select Balance Sheet And Income Statement Information [Abstract] | |
Schedule of Inventory | Inventory December 31, 2019 2018 Raw materials $ 877 $ 92 Work-in-progress 2,067 1,323 Finished goods 15,900 18,846 Total inventory $ 18,844 $ 20,261 |
Schedule of Property and Equipment, Net | Property December 31, Useful Lives (in years) 2019 2018 Lab equipment tooling and molds 4 - 10 $ 7,872 $ 3,379 Office furniture and equipment 6 - 10 1,710 974 Leasehold improvements up to 10 1,950 948 Computers and software 3 1,811 783 Vehicles 5 - 7 16 70 Total property and equipment 13,359 6,154 Less: Accumulated depreciation (8,711 ) (2,773 ) Total property and equipment, net $ 4,648 $ 3,381 |
Schedule of Other Current Assets | December 31, 2019 2018 Government remittances (1) $ 1,704 $ 987 Sundry assets and miscellaneous 1,397 436 Total other current assets $ 3,101 $ 1,423 (1) Government remittances are receivables from the local tax authorities for refund of sales taxes and income taxes. |
Schedule of Accrued Expenses and Other Current Liabilities | December 31, 2019 2018 Payroll and related expense $ 3,117 $ 728 Accrued expenses 10,645 4,303 Commission accrual 4,215 3,866 Sales and consumption taxes 3,143 1,983 Total accrued expenses and other current liabilities $ 21,120 $ 10,880 |
Schedule of Change in Warranty Accrual | The following table provides the details of the change in the Company’s warranty accrual: December 31, 2019 2018 Balance as of the beginning of the year $ 1,336 $ 1,039 Warranties assumed through business combination 273 - Warranties issued during the year 1,038 998 Warranty costs incurred during the year (670 ) (701 ) Balance at the end of the year $ 1,977 $ 1,336 Current 1,254 495 Long-term 723 841 Total $ 1,977 $ 1,336 |
Schedule of Finance Expenses | The following table provides the details of the Company’s finance expenses: December 31, 2019 2018 Interest expense $ 7,166 $ 4,889 Gain on settlement of debt (297 ) — Accretion on long-term debt 680 472 Total finance expenses $ 7,549 $ 5,361 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Net of Accumulated Amortization | Intangible assets net of accumulated amortization were as follows: At December 31, 2019 Gross Amount Accumulated Amortization Net Amount Customer relationships $ 1,400 $ (149 ) $ 1,251 Brand 2,500 (276 ) 2,224 Technology 16,900 (469 ) 16,431 Supplier agreement 3,000 (568 ) 2,432 Total intangible assets $ 23,800 $ (1,462 ) $ 22,338 At December 31, 2018 Gross Amount Accumulated Amortization Net Amount Customer relationships $ 1,400 $ (56 ) $ 1,344 Brand 1,300 (125 ) 1,175 Supplier agreement 3,000 (267 ) 2,733 Total intangible assets $ 5,700 $ (448 ) $ 5,252 |
Schedule of Estimated Amortization Expense | Estimated amortization expense for the next five fiscal years and all years thereafter are as follows: Years ending December 31, 2020 $ 3,473 2021 3,473 2022 3,473 2023 3,473 2024 3,473 Thereafter 4,973 Total $ 22,338 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Aggregate Future Minimum Lease Payments under Operating Leases | Aggregate future minimum lease payments and purchase commitments with manufacturers as of December 31, 2019 are as follows: Years ending December 31, Office Lease Purchase Commitments Total 2020 $ 2,071 $ 5,976 $ 8,047 2021 1,788 — 1,788 2022 937 — 937 2023 515 — 515 Thereafter 1,410 — 1,410 Total $ 6,721 $ 5,976 $ 12,697 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule Principal Payments on Outstanding Borrowings | The scheduled principal payments on the outstanding borrowings as of December 31, 2019 are as follows: As of December 31, 2019 2020 $ - 2021 - 2022 62,700 Total 62,700 Less: debt discounts and issuance costs (1,471 ) Less: current portion - Non-current portion $ 61,229 |
Common Stock Reserved For Iss_2
Common Stock Reserved For Issuance (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Equity [Abstract] | |
Schedule of Common Stock Reserved for Issuance | The Company is required to reserve and keep available out of its authorized but unissued shares of Common Stock a number of shares sufficient to affect the conversion of all outstanding shares of convertible preferred stock, plus options granted and available for grant under the incentive plans. December 31, 2019 Outstanding common stock warrants 3,990,067 Outstanding stock options 3,278,439 Shares reserved for future option grants 742,828 Total common stock reserved for issuance 8,011,334 |
Stock Option Plan (Tables)
Stock Option Plan (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Summary of Recognized Stock-based Compensation Expense for Employees and Non-employees | The Company recognized stock-based compensation for its employees and non-employees in the accompanying consolidated statements of operations as follows: Year Ended December 31, 2019 2018 Cost of sales $ 3 $ 2 Selling and marketing 77 416 General and administrative 840 785 Research and development 1,238 54 Total stock-based compensation $ 2,158 $ 1,257 |
Assumptions used in Fair Value of Option Estimated at Date of Grant using Black-Scholes Option Pricing Formula | The fair value of each option is estimated at the date of grant using the Black-Scholes option pricing formula with the following assumptions : Year Ended December 31, 2019 2018 Expected term (in years) 4.00-5.00 3.00-4.00 Risk-free interest rate 1.4-2.53% 2.10-2.80% Expected volatility 49.00% 50.00% Expected dividend rate 0% 0% |
Summary of Stock Option Activity | The following table summarizes stock option activity under the Company’s stock option plan: Number of Shares Weighted- Average Exercise Price per Share, $ Weighted- Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding – January 1, 2019 3,273,750 3.71 4.58 $ 23,283 Options granted 173,842 7.80 Options exercised (175,736 ) 2.02 Options forfeited/cancelled (196,951 ) 10.94 Options assumed through business combination 203,534 29.97 Outstanding - December 31, 2019 3,278,439 5.29 5.08 $ 4,885 Exercisable – December 31, 2019 2,727,764 4.44 4.37 $ 4,885 Expected to vest – after December 31, 2019 550,675 9.50 8.61 $ - |
Summary of Information about Share Options Outstanding and Exercisable | The following tables summarize information about share options outstanding and exercisable at December 31, 2019: Options Outstanding Options Exercisable Exercise Price Range Number Weighted average remaining contractual term (years) Weighted average Exercise Price Options exercisable Weighted average remaining contractual term (years) Weighted average Exercise Price $0.15 - $3.60 1,890,312 3.23 $ 2.12 1,890,312 3.23 $ 2.12 $5.25 - $12.00 1,219,339 7.73 6.77 717,111 7.33 6.21 $12.45 - $26.10 89,542 6.14 22.38 63,804 5.61 24.13 $26.70 - $33.00 55,335 2.60 27.05 40,507 2.87 27.18 $36.00 - $94.65 23,911 6.97 66.38 16,030 6.54 63.51 3,278,439 5.08 $ 5.29 2,727,764 4.37 $ 4.44 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Geographical Breakdown of Loss Before Provision for Income Taxes | The geographical breakdown of loss before provision for income taxes is as follows: Year Ended December 31, 2019 2018 United States $ (23,194 ) $ (6,260 ) Other jurisdictions (17,244 ) (5,734 ) Loss before income taxes $ (40,438 ) $ (11,994 ) |
Schedule of Components of Provision for Income Taxes | The components of the provision for income taxes are as follows: Year Ended December 31, 2019 2018 Current tax provision: Federal $ — $ 1,291 Foreign 2,989 562 State — (74 ) Total current tax provision 2,989 1,779 Deferred tax provision (benefit): Federal — 851 Foreign (1,132 ) (626 ) State — 211 Total deferred tax provision (benefit) $ (1,132 ) $ 436 Total provision for income taxes $ 1,857 $ 2,215 |
Reconciliation between Income Taxes Computed at Federal Statutory Income Tax Rate and Provision for Income Taxes | The reconciliation between income taxes computed at the federal statutory income tax rate and the provision for income taxes is as follows Year Ended December 31, 2019 2018 Loss before income taxes $ (40,438 ) $ (11,994 ) Theoretical tax benefit at the statutory rate (23.9% in 2019, 23.6% in 2018) (9,665 ) (2,827 ) Differences in jurisdictional tax rates (337 ) 211 Recognition of losses (1,923 ) 467 Valuation allowance 12,343 2,433 Non-deductible expenses 2,217 1,931 Other (778 ) — Total income tax benefit 1,857 2,215 Net loss $ (42,295 ) $ (14,209 ) |
Schedule of Components of Deferred Tax Assets and Deferred Tax Liabilities | The components of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2019 2018 Deferred tax assets: Accrued vacation $ — $ 22 Property and equipment 81 4 Accrued severance pay — 88 Deferred revenue 101 — Allowance for doubtful accounts 440 — Accrued warranty — 183 Loss carryforwards 56,154 6,739 Valuation allowance (56,154 ) (6,739 ) Total deferred tax assets $ 622 $ 297 Deferred tax liabilities: Deferred revenue $ 1,017 $ 1,774 Acquisition related intangible assets — 119 Total deferred tax liabilities $ 1,017 $ 1,893 |
Schedule of Reconciliation of Uncertain Tax Position | The activity related to gross amount of unrecognized tax benefits is as follows: Year Ended December 31, 2019 2018 Balance as of the beginning of the year $ 1,467 $ 1,362 Increases related to tax positions in prior period — 8 Increases related to tax positions taken during the current period — 97 Balance at the end of the year $ 1,467 $ 1,467 |
Segment and Geographic Inform_2
Segment and Geographic Information (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of Revenue by Geographic Area | Revenue by geographic location, which is based on the product shipped to location, is summarized as follows: Year Ended December 31, 2019 2018 United States $ 47,723 $ 46,311 International 62,683 56,303 Total revenue $ 110,406 $ 102,614 |
Schedule of Revenue by Type | The following table presents revenue by type: Year Ended December 31, 2019 2018 Lease revenue $ 65,170 $ 71,540 System revenue 31,730 23,454 Product revenue 6,030 4,412 Service revenue 7,476 3,208 Total revenue $ 110,406 $ 102,614 |
Nature of Operations - Addition
Nature of Operations - Additional Information (Details) | Nov. 07, 2019shares$ / shares | Nov. 03, 2019USD ($)$ / sharesshares | Sep. 30, 2019USD ($)Installment | Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($)$ / shares |
Nature Of Operations [Line Items] | |||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | |||
Gross proceeds from securities sold | $ 6,915,000 | ||||
Costs incurred | $ 1,471,000 | ||||
Accumulated deficit | $ 75,686,000 | $ 35,067,000 | |||
Unsecured Subordinated Promissory Note | Restoration Robotics, Inc. | |||||
Nature Of Operations [Line Items] | |||||
Loan amount given | $ 4,500,000 | ||||
Number of installments of loan amount given | Installment | 3 | ||||
Debt instrument, interest rate, stated percentage | 8.00% | ||||
Borrowings mature date | Nov. 30, 2019 | ||||
Gain (loss) at closing of merger | $ 0 | ||||
Venus Concept Ltd. | Private Placement | Concurrent Financing | |||||
Nature Of Operations [Line Items] | |||||
Common stock, par value | $ / shares | $ 0.0001 | ||||
Number of shares issuable | shares | 7,483,980 | ||||
Warrants to purchase shares of common stock | shares | 3,741,990 | ||||
Exercise price of warrants | $ / shares | $ 6 | ||||
Gross proceeds from securities sold | $ 28,065,000 | ||||
Costs incurred | $ 1,564,000 | ||||
Merger Agreement | Venus Concept Ltd. | |||||
Nature Of Operations [Line Items] | |||||
Right to number of shares to be received in exchange of each outstanding ordinary and preferred share | shares | 8.6506 | ||||
Common stock, par value | $ / shares | $ 0.0001 | ||||
Reverse stock split | 15-for-1 reverse stock split | ||||
Reverse stock split conversion ratio | 15 |
Nature of Operations - Summary
Nature of Operations - Summary of Restatement Adjustments on Previously Reported Consolidated Financial Statements (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2018 |
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Common Stock | $ 24 | $ 5 | $ 5 |
Additional paid in capital | $ 149,840 | 67,495 | 60,048 |
As Previously Reported | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Common Stock | 57,101 | 49,978 | |
Additional paid in capital | 10,399 | 10,075 | |
Adjustment | |||
Error Corrections And Prior Period Adjustments Restatement [Line Items] | |||
Common Stock | (57,096) | (49,973) | |
Additional paid in capital | $ 57,096 | $ 49,973 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Details) | 12 Months Ended | |
Dec. 31, 2019USD ($)Customer | Dec. 31, 2018USD ($)Customer | |
Summary Of Significant Accounting Policies [Line Items] | ||
Non-controlling interest, description | Company does not own 100% of its subsidiaries, it accounts for the partial ownership interest through non-controlling interest. | |
Restricted cash | $ 83,000 | $ 19,000 |
Impairment of long-lived assets | $ 0 | 0 |
Subscription contracts, installment period | 36 months | |
Advertising costs | $ 2,004,000 | $ 1,225,000 |
Effective tax benefit realized upon ultimate settlement | 50.00% | |
Acquisition measurement adjustments period, description | within one year from closing | |
Minimum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Discounted based implicit interest rate in subscription lease | 8.00% | 8.00% |
Estimated useful lives of intangible assets | 6 years | |
Warranty period on systems against defects | 1 year | |
Minimum | Property and Equipment | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Depreciation and amortization, estimated useful lives of assets | 3 years | |
Maximum | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Discounted based implicit interest rate in subscription lease | 9.00% | 9.00% |
Estimated useful lives of intangible assets | 15 years | |
Warranty period on systems against defects | 3 years | |
Maximum | Property and Equipment | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Depreciation and amortization, estimated useful lives of assets | 10 years | |
Customer Concentration Risk | Revenue | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Number of major customers | Customer | 0 | 0 |
Concentration Risk, Percentage | 10.00% | 10.00% |
Customer Concentration Risk | Accounts Receivable | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Number of major customers | Customer | 0 | 0 |
Concentration Risk, Percentage | 10.00% | 10.00% |
Allowance for doubtful accounts | $ 10,494,000 | $ 4,408,000 |
Collateral for Rent and Credit Cards | Other Assets | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Restricted cash | $ 83,000 | $ 19,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||
Balance at beginning of year | $ 4,408 | $ 2,417 |
Write-offs | (3,905) | (8,937) |
Provision | 9,991 | 10,928 |
Balance at end of year | $ 10,494 | $ 4,408 |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Basic and Diluted Net Loss and Weighted Average Number of Shares Used in Computing Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Numerator: | ||
Net loss | $ (42,295) | $ (14,209) |
Net loss allocated to stockholders of the Company | $ (40,619) | $ (14,959) |
Weighted-average number of shares used in per share calculation: | ||
Weighted-average shares of common stock outstanding used in computing net loss per share, basic and diluted | 8,517 | 4,733 |
Net loss per share: | ||
Basic and diluted | $ (4.77) | $ (3.16) |
Net Loss Per Share - Outstandin
Net Loss Per Share - Outstanding Shares of Common Stock Equivalents Excluded from Calculation of Diluted Net Loss per Share Attributable to Common Stockholders (Details) - shares | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potential dilutive shares | 6,717,831 | 2,535,190 |
Options to Purchase Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potential dilutive shares | 2,727,764 | 2,355,258 |
Warrants for Common Stock | ||
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items] | ||
Total potential dilutive shares | 3,990,067 | 179,932 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) $ in Thousands | Nov. 07, 2019USD ($) | Jul. 04, 2019USD ($) | Feb. 15, 2018USD ($)Installment | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Total revenues | $ 110,406 | $ 102,614 | |||
Net Income | (40,619) | $ (14,959) | |||
Venus Concept Ltd. | |||||
Business Acquisition [Line Items] | |||||
Total consideration for acquisition | $ 20,388 | ||||
Venus Concept Ltd. | General and Administrative Expenses | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related expenses | 12,200 | ||||
Venus Concept Ltd. | Common Stock | |||||
Business Acquisition [Line Items] | |||||
The fair value of equity interests | 15,709 | ||||
Venus Concept Ltd. | Restoration Robotics, Inc. | |||||
Business Acquisition [Line Items] | |||||
Fair value of promissory notes issued | $ 4,600 | ||||
Venus Concept Israel Ltd. | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related expenses | $ 19 | ||||
Percentage of ownership interest acquired | 49.00% | ||||
Total consideration for acquisition | $ 123 | ||||
Venus Concept Japan Co., Ltd. | |||||
Business Acquisition [Line Items] | |||||
Percentage of ownership interest acquired | 49.00% | ||||
Total consideration for acquisition | $ 21 | ||||
Venus Concept UK Limited | |||||
Business Acquisition [Line Items] | |||||
Percentage of ownership interest acquired | 40.00% | ||||
Total consideration for acquisition | $ 452 | ||||
NeoGraft Solutions, Inc | |||||
Business Acquisition [Line Items] | |||||
Acquisition-related expenses | 67 | ||||
Total consideration for acquisition | $ 8,679 | ||||
Total revenues | 7,763 | ||||
Net Income | $ 707 | ||||
Amount of consideration held back | $ 500 | ||||
Number of installments | Installment | 2 | ||||
Annual installment payable amount | $ 250 | ||||
Amount of installments payable due | $ 250 |
Business Combinations - Schedul
Business Combinations - Schedule of Purchase Price Allocated to Fair Value of Assets and Liabilities Acquired (Details) - USD ($) $ / shares in Units, $ in Thousands | Nov. 07, 2019 | Feb. 15, 2018 | Dec. 31, 2018 | Dec. 31, 2019 |
Net assets acquired | ||||
Goodwill | $ 2,603 | $ 27,450 | ||
Cash on closing | 7,502 | |||
Net assets acquired | ||||
Goodwill | $ 2,603 | $ 27,450 | ||
Venus Concept Ltd. | ||||
Business Acquisition [Line Items] | ||||
Number of shares of the combined company to be owned by Venus Concept Inc. shareholders | 2,802,466 | |||
Multiplied by the price per share of Venus Concept Inc. common stock | $ 5.6055 | |||
Pre-existing relationships with Venus Concept Ltd. | $ 4,558 | |||
Total purchase consideration | 20,388 | |||
Net assets acquired | ||||
Cash and cash equivalents and restricted cash | 7,409 | |||
Other current assets | 9,308 | |||
Property and equipment | 1,268 | |||
Goodwill | 24,847 | |||
Other non-current assets | 100 | |||
Current liabilities | (12,909) | |||
Long-term debt, including current portion | (27,505) | |||
Other non-current liabilities | (230) | |||
Fair value of net assets acquired | 20,388 | |||
Net assets acquired | ||||
Property and equipment | 1,268 | |||
Goodwill | 24,847 | |||
Venus Concept Ltd. | Common Stock | ||||
Business Acquisition [Line Items] | ||||
The fair value of equity interests | 15,709 | |||
Venus Concept Ltd. | Fully and Partially Vested Stock Options and Warrants | ||||
Business Acquisition [Line Items] | ||||
The fair value of equity interests | 121 | |||
Venus Concept Ltd. | Technology | ||||
Net assets acquired | ||||
Intangibles assets | 16,900 | |||
Net assets acquired | ||||
Intangibles assets | 16,900 | |||
Venus Concept Ltd. | Brand | ||||
Net assets acquired | ||||
Intangibles assets | 1,200 | |||
Net assets acquired | ||||
Intangibles assets | $ 1,200 | |||
NeoGraft Solutions, Inc | ||||
Business Acquisition [Line Items] | ||||
Total purchase consideration | $ 8,679 | |||
Net assets acquired | ||||
Property and equipment | 7 | |||
Goodwill | 2,603 | |||
Cash on closing | 7,502 | |||
Installment payments | 500 | |||
Contingent earn-out payments | 677 | |||
Net assets acquired | ||||
Inventory | 1,315 | |||
Accounts receivable | 44 | |||
Property and equipment | 7 | |||
Accounts payable | (990) | |||
Fair value of net assets acquired | 6,076 | |||
Goodwill | 2,603 | |||
NeoGraft Solutions, Inc | Brand | ||||
Net assets acquired | ||||
Intangibles assets | 1,300 | |||
Net assets acquired | ||||
Intangibles assets | 1,300 | |||
NeoGraft Solutions, Inc | Customer Relationships | ||||
Net assets acquired | ||||
Intangibles assets | 1,400 | |||
Net assets acquired | ||||
Intangibles assets | 1,400 | |||
NeoGraft Solutions, Inc | Supplier Agreement | ||||
Net assets acquired | ||||
Intangibles assets | 3,000 | |||
Net assets acquired | ||||
Intangibles assets | $ 3,000 |
Business Combinations - Sched_2
Business Combinations - Schedule of Revenue, Net Loss and Net Loss Per Share (Details) - Restoration Robotics, Inc. $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Total net revenues | $ 2,775 |
Net loss | $ (4,668) |
Net loss per share, basic and diluted | $ / shares | $ (0.55) |
Business Combinations - Sched_3
Business Combinations - Schedule of Unaudited Pro Forma Financial Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Business Acquisition Pro Forma Information [Abstract] | ||
Total net revenues | $ 123,263 | $ 124,570 |
Net loss | $ (52,976) | $ (45,226) |
Business Combinations - Sched_4
Business Combinations - Schedule of Weighted Average Life of Intangibles Acquired (Details) | 12 Months Ended |
Dec. 31, 2019 | |
Customer Relationships | |
Business Acquisition [Line Items] | |
Weighted average life remaining on acquired intangibles | 14 years |
Brand | |
Business Acquisition [Line Items] | |
Weighted average life remaining on acquired intangibles | 9 years |
Technology | |
Business Acquisition [Line Items] | |
Weighted average life remaining on acquired intangibles | 6 years |
Supplier Agreement | |
Business Acquisition [Line Items] | |
Weighted average life remaining on acquired intangibles | 9 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Level 2 and Level 3 Financial Assets and Liabilities - (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | $ 146 | $ 100 |
Total liabilities | 62,006 | 57,351 |
Long-term Debt | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 61,351 | 56,401 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 146 | 100 |
Significant Unobservable Inputs (Level 3) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 62,006 | 57,351 |
Significant Unobservable Inputs (Level 3) | Long-term Debt | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 61,351 | 56,401 |
Guaranteed Investment Certificates | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 63 | 81 |
Guaranteed Investment Certificates | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 63 | 81 |
Restricted Cash | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 83 | 19 |
Restricted Cash | Significant Other Observable Inputs (Level 2) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total assets | 83 | 19 |
Contingent Earn-out Consideration | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | 655 | 950 |
Contingent Earn-out Consideration | Significant Unobservable Inputs (Level 3) | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total liabilities | $ 655 | $ 950 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule Aggregate Fair Values of Earn-out Liability - (Details) - Level 3 - Contingent Earn-out Consideration - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items] | ||
Beginning balance | $ 950 | $ 1,177 |
Payments | (828) | (227) |
Change in value | 533 | |
Ending balance | $ 655 | $ 950 |
Accounts Receivable - Additiona
Accounts Receivable - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Accounts Notes and Loans Receivable [Line Items] | |||
Sales-type leases term of lease | 36 months | ||
Allowance for doubtful accounts | $ 10,494 | $ 4,408 | $ 2,417 |
Provision for bad debt | 9,991 | 10,928 | |
Customer Filed for Bankruptcy | |||
Accounts Notes and Loans Receivable [Line Items] | |||
Provision for bad debt | 8,300 | ||
Trade Receivables and Long-term Receivables | |||
Accounts Notes and Loans Receivable [Line Items] | |||
Financing receivables, consisting of sales-type leases | $ 72,602 | $ 74,554 |
Accounts Receivable - Summary o
Accounts Receivable - Summary of Accounts Receivables (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Accounts Notes and Loans Receivable [Line Items] | |||
Gross accounts receivable | $ 105,127 | $ 78,962 | |
Unearned income | (5,623) | (5,601) | |
Allowance for doubtful accounts | (10,494) | (4,408) | $ (2,417) |
Net accounts receivable | 89,010 | 68,953 | |
Current trade receivables | 58,977 | 42,663 | |
Current unearned interest income | (3,942) | (3,849) | |
Long-term receivables | 35,656 | 38,201 | |
Long-term unearned interest income | (1,681) | (1,752) | |
Trade Accounts Receivable | |||
Accounts Notes and Loans Receivable [Line Items] | |||
Current trade receivables | 58,977 | 35,314 | |
Long-term receivables | $ 35,656 | $ 39,240 |
Accounts Receivable - Schedule
Accounts Receivable - Schedule of Contractual Commitments, Net of Allowance for Doubtful Accounts (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Accounts Notes and Loans Receivable [Line Items] | |
Total financing receivables | $ 72,602 |
2020 | 37,197 |
2021 | 25,701 |
2022 | 9,527 |
2023 | 177 |
Current financing receivables, net of allowance of $2,960 | |
Accounts Notes and Loans Receivable [Line Items] | |
Total financing receivables | 37,197 |
2020 | 37,197 |
Long-term financing receivables, net of allowance of $2,818 | |
Accounts Notes and Loans Receivable [Line Items] | |
Total financing receivables | 35,405 |
2021 | 25,701 |
2022 | 9,527 |
2023 | $ 177 |
Accounts Receivable - Schedul_2
Accounts Receivable - Schedule of Contractual Commitments, Net of Allowance for Doubtful Accounts (Parenthetical) (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Receivables [Abstract] | |
Allowance for current financing receivables | $ 2,960 |
Allowance for long-term financing receivables | $ 2,818 |
Select Balance Sheet and Stat_3
Select Balance Sheet and Statement of Operations Information - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 877 | $ 92 |
Work-in-progress | 2,067 | 1,323 |
Finished goods | 15,900 | 18,846 |
Total inventory | $ 18,844 | $ 20,261 |
Select Balance Sheet and Stat_4
Select Balance Sheet and Statement of Operations Information - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Select Balance Sheet And Statement Of Operations Information [Abstract] | ||
Cost of goods sold | $ 26,869 | $ 19,929 |
Provision for inventory obsolescence | 1,439 | 470 |
Depreciation expense | $ 1,026 | $ 892 |
Select Balance Sheet and Stat_5
Select Balance Sheet and Statement of Operations Information - Schedule of Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Property Plant And Equipment [Line Items] | ||
Lab equipment tooling and molds | $ 7,872 | $ 3,379 |
Office furniture and equipment | 1,710 | 974 |
Leasehold improvements | 1,950 | 948 |
Computers and software | 1,811 | 783 |
Vehicles | 16 | 70 |
Total property and equipment | 13,359 | 6,154 |
Less: Accumulated depreciation | (8,711) | (2,773) |
Total property and equipment, net | $ 4,648 | $ 3,381 |
Lab Equipment Tooling and Molds | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P4Y | |
Lab Equipment Tooling and Molds | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P10Y | |
Office Furniture and Equipment | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P6Y | |
Office Furniture and Equipment | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P10Y | |
Leasehold Improvements | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | up to 10 | |
Computers and Software | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P3Y | |
Vehicles | Minimum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P5Y | |
Vehicles | Maximum | ||
Property Plant And Equipment [Line Items] | ||
Property and equipment, Useful lives | P7Y |
Select Balance Sheet and Stat_6
Select Balance Sheet and Statement of Operations Information - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 | |
Other Assets [Abstract] | |||
Government remittances | [1] | $ 1,704 | $ 987 |
Sundry assets and miscellaneous | 1,397 | 436 | |
Total other current assets | $ 3,101 | $ 1,423 | |
[1] | Government remittances are receivables from the local tax authorities for refund of sales taxes and income taxes. |
Select Balance Sheet and Stat_7
Select Balance Sheet and Statement of Operations Information - Schedule of Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Payables And Accruals [Abstract] | ||
Payroll and related expense | $ 3,117 | $ 728 |
Accrued expenses | 10,645 | 4,303 |
Commission accrual | 4,215 | 3,866 |
Sales and consumption taxes | 3,143 | 1,983 |
Total accrued expenses and other current liabilities | $ 21,120 | $ 10,880 |
Select Balance Sheet and Stat_8
Select Balance Sheet and Statement of Operations Information - Schedule of Change in Warranty Accrual (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Product Warranty Accrual Balance Sheet Classification [Abstract] | ||
Warranty accrual, Balance as of the beginning of the year | $ 1,336 | $ 1,039 |
Warranties assumed through business combination | 273 | |
Warranties issued during the year | 1,038 | 998 |
Warranty costs incurred during the year | (670) | (701) |
Warranty accrual, Balance at the end of the year | 1,977 | 1,336 |
Current | 1,254 | 495 |
Long-term | $ 723 | $ 841 |
Select Balance Sheet and Stat_9
Select Balance Sheet and Statement of Operations Information - Schedule of Finance Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Interest And Debt Expense [Abstract] | ||
Interest expense | $ 7,166 | $ 4,889 |
Gain on settlement of debt | (297) | |
Accretion on long-term debt | 680 | 472 |
Total finance expenses | $ 7,549 | $ 5,361 |
Intangible Assets - Schedule of
Intangible Assets - Schedule of Intangible Assets Net of Accumulated Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | $ 23,800 | $ 5,700 |
Accumulated Amortization | (1,462) | (448) |
Net Amount | 22,338 | 5,252 |
Customer Relationships | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 1,400 | 1,400 |
Accumulated Amortization | (149) | (56) |
Net Amount | 1,251 | 1,344 |
Brand | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 2,500 | 1,300 |
Accumulated Amortization | (276) | (125) |
Net Amount | 2,224 | 1,175 |
Technology | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 16,900 | |
Accumulated Amortization | (469) | |
Net Amount | 16,431 | |
Supplier Agreement | ||
Finite Lived Intangible Assets [Line Items] | ||
Gross Amount | 3,000 | 3,000 |
Accumulated Amortization | (568) | (267) |
Net Amount | $ 2,432 | $ 2,733 |
Intangible Assets - Schedule _2
Intangible Assets - Schedule of Estimated Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Finite Lived Intangible Assets Future Amortization Expense [Abstract] | ||
2020 | $ 3,473 | |
2021 | 3,473 | |
2022 | 3,473 | |
2023 | 3,473 | |
2024 | 3,473 | |
Thereafter | 4,973 | |
Net Amount | $ 22,338 | $ 5,252 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Aggregate Future Minimum Lease Payments and Purchase Commitments with Manufacturers (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020, Office Lease | $ 2,071 |
2021, Office Lease | 1,788 |
2022, Office Lease | 937 |
2023, Office Lease | 515 |
Thereafter, Office Lease | 1,410 |
Total, Office Lease | 6,721 |
2020, Purchase Commitments | 5,976 |
Total, Purchase Commitments | 5,976 |
2020 | 8,047 |
2021 | 1,788 |
2022 | 937 |
2023 | 515 |
Thereafter | 1,410 |
Total | $ 12,697 |
Commitments and Contingencies_2
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 12 Months Ended | 13 Months Ended | |
Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 11, 2019Complaint | |
Commitment And Contingencies [Line Items] | |||
Rent expense | $ 2,199 | $ 1,344 | |
Purchase obligation | $ 5,976 | ||
Equipment sales and services percentage | 5.00% | ||
Earn-out payments | $ 655 | $ 950 | |
Number of complaints filed | Complaint | 4 | ||
Contract Manufacturers | |||
Commitment And Contingencies [Line Items] | |||
Purchase obligation | 5,748 | ||
Open Purchase Order | |||
Commitment And Contingencies [Line Items] | |||
Purchase obligation | $ 1,516 | ||
Open purchase cancellation period | 90 days | ||
Percentage of open purchase order | 15.00% |
Convertible Promissory Notes -
Convertible Promissory Notes - Additional Information (Details) $ / shares in Units, $ in Thousands, shares in Millions | Nov. 07, 2019USD ($)$ / sharesshares | Aug. 20, 2019USD ($)ConvertiblePromissoryNote | Feb. 28, 2019USD ($)$ / shares | Mar. 30, 2020shares | Nov. 06, 2019USD ($) | Dec. 31, 2019$ / shares | Aug. 31, 2019USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2018$ / shares |
Debt Instrument [Line Items] | |||||||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||||
Unsecured Convertible Promissory Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, borrowed amount | $ | $ 21,250 | $ 7,800 | |||||||
Unsecured Convertible Promissory Notes | Note Purchase Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, borrowed amount | $ | $ 36,958 | $ 2,000 | $ 5,000 | ||||||
Conversion price of convertible promissory notes | $ 6.996 | $ 0.825 | |||||||
Date of amendment of note purchase agreement | Aug. 28, 2020 | Aug. 20, 2019 | |||||||
Number of convertible promissory notes issued | ConvertiblePromissoryNote | 1 | ||||||||
Convertible notes converted into common stock | shares | 5.3 | ||||||||
Unsecured Convertible Promissory Notes | Note Purchase Agreement | Subsequent Event | |||||||||
Debt Instrument [Line Items] | |||||||||
Convertible notes converted into common stock | shares | 1.2 | ||||||||
8% 2019 Unsecured Convertible Promissory Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, interest rate, stated percentage | 8.00% | ||||||||
Interest expense | $ | $ 599 | ||||||||
8% 2019 Unsecured Convertible Promissory Notes | Merger Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Common stock, par value | $ 0.0001 | ||||||||
Conversion price of convertible promissory notes | $ 6.996 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Details) | Jul. 26, 2019USD ($) | Jul. 25, 2019USD ($) | Aug. 14, 2018 | Aug. 30, 2019USD ($) | May 31, 2018USD ($) | Dec. 31, 2019USD ($)$ / sharesshares | Dec. 31, 2018USD ($)shares |
Debt Instrument [Line Items] | |||||||
Debt instrument, borrowed amount | $ 62,700,000 | ||||||
Common stock, shares outstanding | shares | 28,686,116 | 4,772,956 | |||||
Repayments of long-term debt | $ 0 | $ 0 | |||||
Solar Loan and Security Agreement | Solar Two Thousand Eighteen Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Debt conversion, warrants issued | shares | 10,781 | ||||||
Exercise price of warrants | $ / shares | $ 55.65 | ||||||
Debt instrument, term | 10 years | ||||||
Warrants outstanding | shares | 10,781 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | |||||||
Debt Instrument [Line Items] | |||||||
Exercise price of warrants | $ / shares | $ 6 | ||||||
Warrants outstanding | shares | 50,000 | ||||||
Fair value of warrants issued | $ 137,000 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Debt conversion, warrants issued | shares | 50,000 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Measurement Input, Share Price | |||||||
Debt Instrument [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | $ / shares | 5.61 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Measurement Input, Exercise Price | |||||||
Debt Instrument [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | $ / shares | 6 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Measurement Input, Risk Free Interest Rate | |||||||
Debt Instrument [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0.0174 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Measurement Input, Price Volatility | |||||||
Debt Instrument [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0.580 | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Measurement Input, Expected Term | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, term | 5 years | ||||||
Solar Loan and Security Agreement | Solar 2019 Warrants | Measurement Input, Expected Dividend Rate | |||||||
Debt Instrument [Line Items] | |||||||
Warrants and Rights Outstanding, Measurement Input | 0 | ||||||
Madryn Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, term | 10 years | ||||||
Debt instrument, borrowed amount | $ 70,000,000 | ||||||
Debt conversion, warrants issued | shares | 150,000 | ||||||
Exercise price of warrants | $ / shares | $ 5.0604 | ||||||
Debt instrument, maturity date | Sep. 30, 2022 | ||||||
Common stock, shares outstanding | shares | 179,932 | ||||||
Debt instrument, interest rate | 9.00% | ||||||
Interest rate, paid in cash | 9.00% | ||||||
Interest rate, paid in kind | 4.00% | ||||||
Debt instrument, interest rate terms | Effective August 14, 2018, interest on the Madryn loan is 9%, payable quarterly. Previously, interest was payable quarterly, at the Company’s option, as follows: cash interest 9% during the interest only period, which was 3 years or 12 principal payments after closing, plus an additional 4% rate, paid in kind (“PIK”). | ||||||
Liquidity covenant | $ 200 | $ 2,000 | |||||
Equity increased from lowered liquidity covenant | $ 21,000 | ||||||
Proceeds from concurrent financing | $ 21,000 | ||||||
Madryn Credit Agreement | Debt Instrument, Redemption, Period One | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount of borrowings being prepaid | 8.00% | ||||||
Madryn Credit Agreement | Debt Instrument, Redemption, Period Two | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount of borrowings being prepaid | 6.50% | ||||||
Madryn Credit Agreement | Debt Instrument, Redemption, Period Three | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount of borrowings being prepaid | 5.00% | ||||||
Madryn Credit Agreement | Debt Instrument, Redemption, Period Four | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount of borrowings being prepaid | 4.00% | ||||||
Madryn Credit Agreement | Debt Instrument, Redemption, Period Five | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount of borrowings being prepaid | 3.00% | ||||||
Madryn Credit Agreement | Debt Instrument Redemption Period Six | |||||||
Debt Instrument [Line Items] | |||||||
Percentage of principal amount of borrowings being prepaid | 2.00% | ||||||
Madryn Credit Agreement | Series B Preferred Shares | |||||||
Debt Instrument [Line Items] | |||||||
Debt conversion, warrants issued | shares | 150,000 | ||||||
Exercise price of warrants | $ / shares | $ 5.0604 | ||||||
Madryn Credit Agreement | Series C Preferred Shares | |||||||
Debt Instrument [Line Items] | |||||||
Debt conversion, warrants issued | shares | 12,000 | ||||||
Exercise price of warrants | $ / shares | $ 5.0604 | ||||||
Solar Loan and Security Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, term | 4 years | ||||||
Debt instrument, borrowed amount | $ 20,000,000 | ||||||
Solar Loan and Security Agreement | LIBOR | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, basis spread on variable rate | 7.95% | ||||||
Tranche A-1 and A-2 and B | Madryn Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, borrowed amount | $ 60,000,000 | ||||||
Tranche C | Madryn Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, undrawn amount | $ 10,000,000 | ||||||
Tranche A-1 and A-2 | Madryn Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, borrowed amount | $ 50,000,000 |
Long-Term Debt - Schedule Princ
Long-Term Debt - Schedule Principal Payments on Outstanding Borrowings (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Debt Disclosure [Abstract] | ||
2022 | $ 62,700 | |
Total | 62,700 | |
Less: debt discounts and issuance costs | (1,471) | |
Non-current portion | $ 61,229 | $ 50,892 |
Credit Facility - Additional In
Credit Facility - Additional Information (Details) - Revolving Credit Facility - City National Bank of Florida - USD ($) | Dec. 31, 2019 | May 01, 2019 | Apr. 30, 2019 | Dec. 31, 2018 |
Line Of Credit Facility [Line Items] | ||||
Revolving credit facility,maximum outstanding amount | $ 10,000,000 | $ 10,000,000 | $ 7,500,000 | $ 7,500,000 |
Revolving credit facility outstanding | $ 7,789,000 | $ 5,655,000 | ||
Debt weighted average interest rate | 5.40% | 5.70% | ||
LIBOR | ||||
Line Of Credit Facility [Line Items] | ||||
Debt instrument, interest rate, stated percentage | 3.25% |
Common Stock Reserved for Iss_3
Common Stock Reserved for Issuance - Schedule of Common Stock Reserved for Issuance (Details) - shares | Dec. 31, 2019 | Dec. 31, 2018 |
Class Of Stock [Line Items] | ||
Outstanding stock options | 3,278,439 | 3,273,750 |
Shares reserved for future option grants | 742,828 | |
Total common stock reserved for issuance | 8,011,334 | |
Common Stock | ||
Class Of Stock [Line Items] | ||
Outstanding common stock warrants | 3,990,067 |
Stock Option Plan - Additional
Stock Option Plan - Additional Information (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Oct. 04, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock reserved for issuance | 8,011,334 | ||
Expected dividend | $ 0 | ||
Total intrinsic value of options exercised | $ 1,532,000 | $ 574,000 | |
Weighted-average grant date fair value of options granted | $ 5.50 | $ 5.85 | |
2010 Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Stock option, vesting period | 7 years | ||
Stock option, vesting period extension | 10 years | ||
Common stock reserved for issuance | 44,450 | 188,217 | |
2019 Plan | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Common stock reserved for issuance | 698,378 | 450,000 |
Stock Option Plan - Summary of
Stock Option Plan - Summary of Recognized Stock-based Compensation Expense for Employees and Non-employees (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | $ 2,158 | $ 1,257 |
Employees and Non-employees | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | 2,158 | 1,257 |
Cost of Sales | Employees and Non-employees | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | 3 | 2 |
Selling and Marketing | Employees and Non-employees | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | 77 | 416 |
General and Administrative | Employees and Non-employees | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | 840 | 785 |
Research and Development | Employees and Non-employees | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock-based compensation | $ 1,238 | $ 54 |
Stock Option Plan - Assumptions
Stock Option Plan - Assumptions used in Fair Value of Option Estimated at Date of Grant using Black-Scholes Option Pricing Formula (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected volatility | 49.00% | 50.00% |
Expected dividend rate | 0.00% | 0.00% |
Minimum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 4 years | 3 years |
Risk-free interest rate, minimum | 1.40% | 2.10% |
Maximum | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Expected term (in years) | 5 years | 4 years |
Risk-free interest rate, minimum | 2.53% | 2.80% |
Stock Option Plan - Summary o_2
Stock Option Plan - Summary of Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award Options Outstanding Roll Forward | ||
Number of Shares, Outstanding, Beginning Balance | 3,273,750 | |
Number of Shares, Options granted | 173,842 | |
Number of Shares, Options exercised | (175,736) | |
Number of Shares, Options forfeited/cancelled | (196,951) | |
Number of Shares, Options assumed through business combination | 203,534 | |
Number of Shares, Outstanding, Ending Balance | 3,278,439 | 3,273,750 |
Number of Shares, Exercisable | 2,727,764 | |
Number of Shares, Expected to vest | 550,675 | |
Weighted-Average Exercise Price Per Share, Outstanding, Beginning Balance | $ 3.71 | |
Weighted-Average Exercise Price Per Share, Options granted | 7.80 | |
Weighted-Average Exercise Price Per Share, Options exercised | 2.02 | |
Weighted-Average Exercise Price Per Share, Options forfeited/cancelled | 10.94 | |
Weighted-Average Exercise Price Per Share, Options assumed through business combination | 29.97 | |
Weighted-Average Exercise Price Per Share, Outstanding, Ending Balance | 5.29 | $ 3.71 |
Weighted-Average Exercise Price Per Share, Exercisable | 4.44 | |
Weighted-Average Exercise Price Per Share, Expected to vest | $ 9.50 | |
Weighted-Average Remaining Contractual Term, Outstanding | 5 years 29 days | 4 years 6 months 29 days |
Weighted-Average Remaining Contractual Term, Exercisable | 4 years 4 months 13 days | |
Weighted-Average Remaining Contractual Term, Expected to vest | 8 years 7 months 9 days | |
Aggregate Intrinsic Value, Outstanding | $ 4,885 | $ 23,283 |
Aggregate Intrinsic Value, Exercisable | $ 4,885 |
Stock Option Plan - Summary o_3
Stock Option Plan - Summary of Information about Share Options Outstanding and Exercisable (Details) | 12 Months Ended |
Dec. 31, 2019$ / sharesshares | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Options Outstanding, Number | shares | 3,278,439 |
Options Outstanding, Weighted average remaining contractual term (years) | 5 years 29 days |
Options Outstanding, Weighted average Exercise Price | $ 5.29 |
Options Exercisable | shares | 2,727,764 |
Options Exercisable, Weighted average remaining contractual term (years) | 4 years 4 months 13 days |
Options Exercisable, Weighted average Exercise Price | $ 4.44 |
$0.15 - $3.60 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Price Range (Lower limit) | 0.15 |
Exercise Price Range (Upper limit) | $ 3.60 |
Options Outstanding, Number | shares | 1,890,312 |
Options Outstanding, Weighted average remaining contractual term (years) | 3 years 2 months 23 days |
Options Outstanding, Weighted average Exercise Price | $ 2.12 |
Options Exercisable | shares | 1,890,312 |
Options Exercisable, Weighted average remaining contractual term (years) | 3 years 2 months 23 days |
Options Exercisable, Weighted average Exercise Price | $ 2.12 |
$5.25 - $12.00 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Price Range (Lower limit) | 5.25 |
Exercise Price Range (Upper limit) | $ 12 |
Options Outstanding, Number | shares | 1,219,339 |
Options Outstanding, Weighted average remaining contractual term (years) | 7 years 8 months 23 days |
Options Outstanding, Weighted average Exercise Price | $ 6.77 |
Options Exercisable | shares | 717,111 |
Options Exercisable, Weighted average remaining contractual term (years) | 7 years 3 months 29 days |
Options Exercisable, Weighted average Exercise Price | $ 6.21 |
$12.45 - $26.10 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Price Range (Lower limit) | 12.45 |
Exercise Price Range (Upper limit) | $ 26.10 |
Options Outstanding, Number | shares | 89,542 |
Options Outstanding, Weighted average remaining contractual term (years) | 6 years 1 month 20 days |
Options Outstanding, Weighted average Exercise Price | $ 22.38 |
Options Exercisable | shares | 63,804 |
Options Exercisable, Weighted average remaining contractual term (years) | 5 years 7 months 9 days |
Options Exercisable, Weighted average Exercise Price | $ 24.13 |
$26.70 - $33.00 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Price Range (Lower limit) | 26.70 |
Exercise Price Range (Upper limit) | $ 33 |
Options Outstanding, Number | shares | 55,335 |
Options Outstanding, Weighted average remaining contractual term (years) | 2 years 7 months 6 days |
Options Outstanding, Weighted average Exercise Price | $ 27.05 |
Options Exercisable | shares | 40,507 |
Options Exercisable, Weighted average remaining contractual term (years) | 2 years 10 months 13 days |
Options Exercisable, Weighted average Exercise Price | $ 27.18 |
$36.00 - $94.65 | |
Share Based Compensation Shares Authorized Under Stock Option Plans Exercise Price Range [Line Items] | |
Exercise Price Range (Lower limit) | 36 |
Exercise Price Range (Upper limit) | $ 94.65 |
Options Outstanding, Number | shares | 23,911 |
Options Outstanding, Weighted average remaining contractual term (years) | 6 years 11 months 19 days |
Options Outstanding, Weighted average Exercise Price | $ 66.38 |
Options Exercisable | shares | 16,030 |
Options Exercisable, Weighted average remaining contractual term (years) | 6 years 6 months 14 days |
Options Exercisable, Weighted average Exercise Price | $ 63.51 |
Income Taxes - Schedule of Geog
Income Taxes - Schedule of Geographical Breakdown of Loss Before Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
United States | $ (23,194) | $ (6,260) |
Other jurisdictions | (17,244) | (5,734) |
Loss before income taxes | $ (40,438) | $ (11,994) |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Current tax provision: | ||
Federal | $ 1,291 | |
Foreign | $ 2,989 | 562 |
State | (74) | |
Total current tax provision | 2,989 | 1,779 |
Deferred tax provision (benefit): | ||
Federal | 851 | |
Foreign | (1,132) | (626) |
State | 211 | |
Total deferred tax provision (benefit) | (1,132) | 436 |
Total provision for income taxes | $ 1,857 | $ 2,215 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Income Taxes [Line Items] | |||
Deferred tax assets, valuation allowance, change in amount | $ 54,049 | $ 2,433 | |
Federal statutory rate | 21.00% | 21.00% | 35.00% |
Deferred tax assets, federal operating loss carry forwards | $ 228,396 | $ 27,631 | |
Deferred tax assets, state operating loss carry forwards | $ 228,396 | ||
Operating loss carry forwards, expiry year start | 2022 | ||
Operating loss carry forwards, expiry year end | 2039 | ||
Operating loss carry forwards, expiry year end | 2025 | ||
Uncertain tax position | greater than 50% | ||
Future tax benefits | $ 622 | $ 297 | |
Open to examination by Unites states and various states jurisdictions | 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 | ||
Federal | |||
Income Taxes [Line Items] | |||
Federal research and development tax credit carryforwards | $ 2,288 | ||
State | |||
Income Taxes [Line Items] | |||
Federal research and development tax credit carryforwards | $ 2,602 |
Income Taxes - Reconciliation b
Income Taxes - Reconciliation between Income Taxes Computed at Federal Statutory Income Tax Rate and Provision for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract] | ||
Loss before income taxes | $ (40,438) | $ (11,994) |
Theoretical tax benefit at the statutory rate (23.9% in 2019, 23.6% in 2018) | (9,665) | (2,827) |
Differences in jurisdictional tax rates | (337) | 211 |
Recognition of losses | (1,923) | 467 |
Valuation allowance | 12,343 | 2,433 |
Non-deductible expenses | 2,217 | 1,931 |
Other | (778) | |
Total provision for income taxes | 1,857 | 2,215 |
Net loss | $ (42,295) | $ (14,209) |
Income Taxes - Reconciliation_2
Income Taxes - Reconciliation between Income Taxes Computed at Federal Statutory Income Tax Rate and Provision for Income Taxes (Parenthetical) (Details) | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract] | ||
Theoretical tax benefit, statutory rate | 23.90% | 23.60% |
Income Taxes - Schedule of Co_2
Income Taxes - Schedule of Components of Deferred Tax Assets and Deferred Tax Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets: | ||
Accrued vacation | $ 22 | |
Property and equipment | $ 81 | 4 |
Accrued severance pay | 88 | |
Deferred revenue | 101 | |
Allowance for doubtful accounts | 440 | |
Accrued warranty | 183 | |
Loss carryforwards | 56,154 | 6,739 |
Valuation allowance | (56,154) | (6,739) |
Total deferred tax assets | 622 | 297 |
Deferred tax liabilities: | ||
Deferred revenue | 1,017 | 1,774 |
Acquisition related intangible assets | 119 | |
Total deferred tax liabilities | $ 1,017 | $ 1,893 |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Uncertain Tax Position (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Balance as of the beginning of the year | $ 1,467 | $ 1,362 |
Increases related to tax positions in prior period | 0 | 8 |
Increases related to tax positions taken during the current period | 0 | 97 |
Balance at the end of the year | $ 1,467 | $ 1,467 |
Accrued Severance Pay and Sev_2
Accrued Severance Pay and Severance Pay Funds - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Accrued Severance Pay And Severance Pay Funds [Abstract] | ||
Unrealized gains on deposited funds | $ 36 | $ 12 |
Segment and Geographic Inform_3
Segment and Geographic Information - Additional Information (Details) | 12 Months Ended |
Dec. 31, 2019Segment | |
Segment Reporting Information [Line Items] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Lease Revenue | |
Segment Reporting Information [Line Items] | |
System sales with typical lease terms | 36 months |
System Revenue | |
Segment Reporting Information [Line Items] | |
Systems sales with payment terms | 12 months |
Segment and Geographic Inform_4
Segment and Geographic Information - Schedule of Revenue by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total revenue | $ 110,406 | $ 102,614 |
United States | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total revenue | 47,723 | 46,311 |
International | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Total revenue | $ 62,683 | $ 56,303 |
Segment and Geographic Inform_5
Segment and Geographic Information - Schedule of Revenue by Type (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Entity Wide Information Revenue From External Customer [Line Items] | ||
Total revenue | $ 110,406 | $ 102,614 |
Lease Revenue | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Total revenue | 65,170 | 71,540 |
System Revenue | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Total revenue | 31,730 | 23,454 |
Product Revenue | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Total revenue | 6,030 | 4,412 |
Service Revenue | ||
Entity Wide Information Revenue From External Customer [Line Items] | ||
Total revenue | $ 7,476 | $ 3,208 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) Rp in Billions | Jul. 01, 2016 | Dec. 31, 2019USD ($)$ / System | Dec. 31, 2018USD ($) | Dec. 31, 2019IDR (Rp)$ / System | Dec. 31, 2018IDR (Rp) |
Intellectual Property Transfer Agreement | |||||
Related Party Transaction [Line Items] | |||||
Aggregate amount of income transferred for license | $ 3,000,000 | ||||
Royalties | $ 806,000 | $ 382,000 | |||
Trade payables | 101,000 | ||||
Intellectual Property Transfer Agreement | Venus Viva System and the Related Consumables | |||||
Related Party Transaction [Line Items] | |||||
Percentage of income transferred for license | 7.00% | ||||
Intellectual Property Transfer Agreement | Venus Versa System | |||||
Related Party Transaction [Line Items] | |||||
Amount transferred per system for license | $ / System | 1.50 | 1.50 | |||
Ipsum | |||||
Related Party Transaction [Line Items] | |||||
Marketing and sales support fees charged | $ 35,000 | 44,000 | |||
Amounts outstanding | 0 | 0 | |||
Inphronics Limited | |||||
Related Party Transaction [Line Items] | |||||
Shares transferred from Inphronic | 100.00% | ||||
Outstanding amount of the loan | $ 498,000 | 477,000 | Rp 6.9 | Rp 6.9 | |
Senior Manager | TBC | |||||
Related Party Transaction [Line Items] | |||||
Percentage of ownership by senior manager in TBC | 30.00% | 30.00% | |||
TBC | |||||
Related Party Transaction [Line Items] | |||||
Products purchased | $ 378,000 | $ 330,000 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) $ / shares in Units, $ in Thousands, $ in Thousands | Mar. 19, 2020USD ($) | Mar. 18, 2020$ / sharesshares | Dec. 31, 2019USD ($)$ / sharesshares | Mar. 05, 2020USD ($) | Mar. 05, 2020SGD ($) | Dec. 31, 2018$ / sharesshares |
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 28,686,116 | 4,772,956 | ||||
Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||
Proceeds from private placement | $ | $ 26,501 | |||||
Securities Purchase Agreement | Investors | ||||||
Subsequent Event [Line Items] | ||||||
Warrants exercisable period | beginning 181 days after their issue date | |||||
Subsequent Event | Securities Purchase Agreement | Investors | ||||||
Subsequent Event [Line Items] | ||||||
Common stock, shares issued | 2,300,000 | |||||
Common stock, par value | $ / shares | $ 0.0001 | |||||
Warrants expiry period | 5 years | |||||
Proceeds from private placement | $ | $ 22,250 | |||||
Subsequent Event | Securities Purchase Agreement | Investors | Private Placement | ||||||
Subsequent Event [Line Items] | ||||||
Warrants to purchase shares of common stock | 6,675,000 | |||||
Exercise price of warrants | $ / shares | $ 3.50 | |||||
Subsequent Event | Securities Purchase Agreement | Investors | Series A Convertible Preferred Stock | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock, shares issued | 660,000 | |||||
Preferred stock, par value | $ / shares | $ 0.0001 | |||||
Subsequent Event | Securities Purchase Agreement | Investors | Series A Convertible Preferred Stock | Common Stock | ||||||
Subsequent Event [Line Items] | ||||||
Preferred stock convertible into common stock | 6,600,000 | |||||
Subsequent Event | Venus Concept Singapore Pte. Ltd | ||||||
Subsequent Event [Line Items] | ||||||
Dividends payable | $ 289 | $ 400 |