SIENTRA, INC., 10-Q filed on 11/16/2015
Quarterly Report
Document and Entity Information
9 Months Ended
Sep. 30, 2015
Nov. 9, 2015
Document and Entity Information
 
 
Entity Registrant Name
Sientra, Inc. 
 
Entity Central Index Key
0001551693 
 
Document Type
10-Q 
 
Document Period End Date
Sep. 30, 2015 
 
Amendment Flag
false 
 
Current Fiscal Year End Date
--12-31 
 
Entity Current Reporting Status
Yes 
 
Entity Filer Category
Non-accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
17,993,416 
Document Fiscal Year Focus
2015 
 
Document Fiscal Period Focus
Q3 
 
Condensed Balance Sheets (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Current assets:
 
 
Cash and cash equivalents
$ 148,939 
$ 96,729 
Accounts receivable, net of allowances of $12,228 and $10,330 at September 30, 2015 and December 31, 2014, respectively
3,647 
5,198 
Inventories, net
20,670 
20,174 
Prepaid expenses and other current assets
1,596 
1,782 
Total current assets
174,852 
123,883 
Property and equipment, net
1,205 
555 
Goodwill
14,278 
14,278 
Other intangible assets, net
68 
114 
Other assets
225 
248 
Total assets
190,628 
139,078 
Current liabilities:
 
 
Current portion of long-term debt
25,138 
3,757 
Accounts payable
2,905 
2,589 
Accrued and other current liabilities
7,043 
5,772 
Customer deposits
7,567 
8,614 
Total current liabilities
42,653 
20,732 
Long-term debt, net of current portion
 
21,671 
Warranty reserve and other long-term liabilities
1,483 
1,036 
Total liabilities
44,136 
43,439 
Commitments and contingencies (Note 10)
   
   
Stockholders' equity:
 
 
Preferred Stock, $0.01 par value - Authorized 10,000,000 shares; none issued or outstanding
   
   
Common stock, $0.01 par value - Authorized 200,000,000; issued 18,064,654 and 14,985,704 and outstanding 17,991,927 and 14,912,977 shares at September 30, 2015 and December 31, 2014, respectively
180 
150 
Additional paid-in capital
293,598 
229,795 
Treasury stock, at cost (72,727 shares at September 30, 2015 and December 31, 2014)
(260)
(260)
Accumulated deficit
(147,026)
(134,046)
Total stockholders' equity
146,492 
95,639 
Total liabilities and stockholders' equity
$ 190,628 
$ 139,078 
Condensed Balance Sheets (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Condensed Balance Sheets
 
 
Accounts receivable, allowances (in dollars)
$ 12,228 
$ 10,330 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, shares issued
18,064,654 
14,985,704 
Common stock, shares outstanding
17,991,927 
14,912,977 
Treasury stock, shares
72,727 
72,727 
Condensed Statements of Operations (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Condensed Statements of Operations
 
 
 
 
Net sales
$ 9,929 
$ 10,670 
$ 36,569 
$ 32,617 
Cost of goods sold
2,933 
2,832 
10,107 
8,287 
Gross profit
6,996 
7,838 
26,462 
24,330 
Operating expenses:
 
 
 
 
Sales and marketing
6,282 
4,711 
20,087 
16,574 
Research and development
2,143 
1,246 
4,896 
3,551 
General and administrative
4,140 
2,634 
11,804 
7,542 
Total operating expenses
12,565 
8,591 
36,787 
27,667 
Loss from operations
(5,569)
(753)
(10,325)
(3,337)
Other (expense) income, net:
 
 
 
 
Interest income
12 
 
19 
 
Interest expense
(1,608)
(665)
(2,947)
(1,507)
Other income (expense), net:
561 
(34)
273 
2,230 
Total other (expense) income, net
(1,035)
(699)
(2,655)
723 
Loss before income taxes
(6,604)
(1,452)
(12,980)
(2,614)
Net loss
$ (6,604)
$ (1,452)
$ (12,980)
$ (2,614)
Basic and diluted net loss per share attributable to common stockholders (in dollars per share)
$ (0.43)
$ (6.94)
$ (0.86)
$ (12.53)
Weighted average outstanding common shares used for net loss per share attributable to common stockholders:
 
 
 
 
Basic and diluted (in shares)
15,207,870 
209,344 
15,022,022 
208,648 
Condensed Statements of Cash Flows (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Cash flows from operating activities:
 
 
Net loss
$ (12,980)
$ (2,614)
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
 
 
Depreciation and amortization
232 
196 
Provision for sales return reserve
1,947 
1,973 
Provision for (recovery of) doubtful accounts
40 
(64)
Provision for warranties
445 
363 
Provision for inventory
355 
 
Change in fair value of warrants
(274)
135 
Noncash interest expense
1,387 
350 
Stock-based compensation expense
1,759 
368 
Changes in assets and liabilities:
 
 
Accounts receivable
(436)
(115)
Prepaid expenses, other current assets and other assets
20 
(1,035)
Inventories
(851)
2,285 
Accounts payable
295 
(2,815)
Accrued and other liabilities
1,082 
169 
Customer deposits
(1,048)
2,350 
Net cash (used in) provided by operating activities
(8,027)
1,546 
Cash flows from investing activities:
 
 
Purchase of property and equipment
(844)
(320)
Net cash used in investing activities
(844)
(320)
Cash flows from financing activities:
 
 
Proceeds from exercise of stock options
113 
Proceeds from issuance of common stock , net underwriters discount
62,040 
 
Proceeds from issuance of common stock under employee stock purchase plan
564 
 
Deferred equity issuance costs, IPO
(72)
(993)
Deferred equity issuance costs, follow-on offering
(77)
 
Proceeds from issuance of long-term debt
 
10,000 
Repayment of long-term debt
(1,487)
 
Deferred financing costs
 
(148)
Net cash provided by financing activities
61,081 
8,868 
Net increase in cash and cash equivalents
52,210 
10,094 
Cash and cash equivalents at:
 
 
Beginning of period
96,729 
9,722 
End of period
148,939 
19,816 
Cash paid during the year for:
 
 
Interest
1,570 
1,052 
Supplemental disclosure of noncash investing and financing activities:
 
 
Accrued equity issuance costs
566 
818 
Property and equipment in accounts payable
$ 36 
 
Formation and Business of the Company
Formation and Business of the Company

 

1.Formation and Business of the Company

 

a.Formation

 

Sientra, Inc., or the Company, was incorporated in the State of Delaware on August 29, 2003 under the name Juliet Medical, Inc. and subsequently changed its name to Sientra, Inc. in April 2007. The Company acquired substantially all the assets of Silimed, Inc., on April 4, 2007. The purpose of the acquisition was to acquire the rights to the silicone breast implant clinical trials. Following this acquisition, the Company focused on completing the clinical trials to gain Food and Drug Administration, or FDA, approval to offer its silicone gel breast implants in the United States.

 

In March 2012, Sientra announced it had received approval from the FDA for its portfolio of silicone gel breast implants, and in the second quarter of 2012 the Company began commercial efforts to sell its products in the United States. The Company, based in Santa Barbara, California, is a medical aesthetics company that focuses on serving board-certified plastic surgeons and offers a portfolio of silicone shaped and round breast implants, tissue expanders, and body contouring products.

 

b.Reverse Stock Split

 

On October 10, 2014, our board of directors and stockholders approved an amendment to the Company’s fourth amended and restated certificate of incorporation, which was filed on October 17, 2014, which effected a 2.75-to-1 reverse stock split of the Company’s issued and outstanding shares of common stock. The par value of the common stock was not adjusted as a result of the reverse stock split. All issued and outstanding shares of common stock, stock options and warrants and the related per share amounts contained in the Company’s condensed financial statements have been retroactively adjusted to reflect this reverse stock split for all periods presented. Also, as a result of the reverse stock split of the common stock, the conversion ratios for all of the Company’s convertible preferred stock have been adjusted such that the preferred stock became convertible into shares of common stock at a conversion rate of 2.75-to-1 instead of 1-to-1.

 

c.Initial Public Offering

 

On November 3, 2014, the Company completed an initial public offering, or IPO, whereby it sold a total of 5,750,000 shares of common stock at $15.00 per share inclusive of 750,000 shares sold to underwriters for the exercise of their option to purchase additional shares. The Company received net proceeds from the IPO of approximately $77,035, after deducting underwriting discounts and commissions and offering expenses of approximately $9,215. These expenses were recorded against the proceeds received from the IPO.

 

The interest-only period for the tranche D term loan (see Note 8) was extended from August 1, 2015 to August 1, 2016 as a result of having raised at least $50,000 in gross proceeds in the IPO and the completion of the IPO before June 30, 2015.

 

The outstanding shares of convertible preferred stock were converted on a 2.75-to-1 basis into shares of common stock concurrent with the closing of the IPO. All of the outstanding shares of Series A, Series B and Series C preferred stock converted into 8,942,925 shares of common stock. Following the closing of the IPO, there were no shares of preferred stock outstanding.

 

d.   Follow-On Offering

 

On September 23, 2015, the Company closed a follow-on public offering, whereby it sold 3,000,000 shares of its common stock, at a price to the public of $22.00 per share. The Company received net proceeds from the follow-on offering of approximately $61,397, after deducting underwriting discounts and commissions of $3,960 and offering expenses of approximately $643.

 

e.   Regulatory inquiries regarding products manufactured by Silimed

 

There have been recent regulatory inquiries related to medical devices manufactured by Silimed Industria de Implantes Ltda. (formerly, Silimed-Silicone e Instrumental Medico-Cirugio e Hospitalar Ltda.), or Silimed, the Company’s contract manufacturer.

 

On September 23, 2015, the Medicines and Healthcare Products Regulatory Agency, or MHRA, an executive agency of the United Kingdom, or U.K., issued a press release announcing the suspension of sales and implanting in the U.K. of all medical devices manufactured by Silimed following the suspension of the CE certificate of these products issued by TUV SUD, Silimed’s notified body under European Union, or EU, regulation. The suspension of Silimed’s CE certificate by TUV SUD followed TUV SUD’s inspection at Silimed’s manufacturing facilities in Brazil, and was a result of good manufacturing practices, or GMP, non-conformities relating to particles discovered on breast implants. Breast implants have stringent standards for manufacturing and robust quality systems, but there is no specific or defined standard for particles on breast implants. MHRA noted that no risks to patient health have been identified in connection with implanting Silimed products, and, accordingly, there is no need to adopt any procedure or action for those patients who have received them.

 

On October 2, 2015, the Brazilian regulatory agency ANVISA and the Department of the Secretary of State of the State of Rio de Janeiro announced that while they continue to review the technical compliance related to GMP of Silimed’s manufacturing facility, and due to the announced suspension of the CE certificate, they temporarily suspended the manufacturing and shipment of all medical devices made by Silimed, including products manufactured for Sientra. ANVISA reiterated that no risks to patient health have been identified in connection with implanting Silimed products, and, accordingly, there is no need to adopt any procedure or action for those patients who have received them. Furthermore, ANVISA also indicated that, based on their contact to date with foreign regulatory authorities, there have been no reports of adverse events related to the use of Silimed products.

 

On October 9, 2015, the Company voluntarily placed a hold on the sale of all Sientra devices manufactured by Silimed and recommended that plastic surgeons discontinue implanting the devices until further notice.  The Company has been in ongoing discussions with the FDA regarding Brazilian regulatory inquiries into Silimed products, and is conducting its own review of the matter with the assistance of independent experts in quality management systems, GMP and data-based risk assessment.  The FDA has also reiterated that no reports of adverse events and no risks to patient health have been identified in connection with implanting Silimed-manufactured products.

 

Summary of Significant Accounting Policies
Summary of Significant Accounting Policies

 

2.Summary of Significant Accounting Policies

 

a.Basis of Presentation

 

The accompanying unaudited condensed financial statements in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC.  Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting.  The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 18, 2015, or the Annual Report. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period.

 

b.Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. Silimed is the Company’s sole source manufacturer of silicone gel breast implants, tissue expanders and other products. The continuation of the Company as a going concern is dependent upon many factors including the satisfactory resolution of the regulatory inquiries of Silimed’s medical devices, Silimed’s ability to resume the manufacturing of the Company’s medical devices, and the resumption of the sale of the Company’s products. Since inception, the Company has incurred net losses. At September 30, 2015, the Company had cash and cash equivalents of $148,939. The Company’s ability to continue to meet its obligations and to achieve its business objectives is dependent upon, amongst other things, generating sufficient revenues. The Company believes that it has the ability to continue as a going concern for at least 12 months. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

c.Use of Estimates

 

The preparation of the condensed financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

d.Significant Accounting Policies

 

There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2015, as compared to the significant accounting policies described in the “Notes to Financial Statements” in the Annual Report.

 

e.Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board, or FASB, issued accounting standard update, or ASU, 2014-09, Revenue from Contracts with Customers.  The standard was issued to provide a single framework that replaces existing industry and transaction specific US GAAP with a five step analysis of transactions to determine when and how revenue is recognized. The accounting standard update will replace most existing revenue recognition guidance in US GAAP when it becomes effective.  In July 2015, the FASB voted to approve the deferral of the effective date of ASU 2014-09 by one year.  Therefore, ASU 2014-09 will become effective for the Company beginning in fiscal year 2018. Early adoption would be permitted for the Company beginning in fiscal year 2017. The standard permits the use of either the retrospective or cumulative transition method. The Company is currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

 

In April 2015, the FASB issued accounting standard update 2015-03, Interest — Imputation of Interest.  The standard was issued to simplify the presentation of debt issuance costs and require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.  This accounting standard update will be effective for the Company beginning in fiscal year 2016.  The Company anticipates there will be no material impact on its financial statement upon adoption of this guidance.

 

In April 2015, the FASB issued accounting standard update 2015-05, Intangibles — Goodwill and Other — Internal-Use Software.  The standard was issued to provide guidance to customers about whether a cloud computing arrangement includes a software license.  If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses.  If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract.  This accounting standard update will be effective for the Company beginning in fiscal year 2016.  The Company anticipates there will be no material impact on its financial statement upon adoption of this guidance.

 

In July 2015, the FASB issued accounting standard update 2015-11, Inventory — Simplifying the Measurement of Inventory.  The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The accounting standard update will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. This accounting standard update will be effective for the Company beginning in fiscal year 2017. The Company anticipates there will be no material impact on its financial statement upon adoption of this guidance.

 

Fair Value of Financial Instruments
Fair Value of Financial Instruments

 

3.Fair Value of Financial Instruments

 

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, and customer deposits are reasonable estimates of their fair value because of the short maturity of these items. The fair value of the common stock warrant liability is discussed in Note 4. The fair value of our long-term debt is based on the amount of future cash flows associated with the instrument discounted using our current market rate. At September 30, 2015, the carrying value of the long-term debt is presented as a current liability of $25,138 representing all principal, interest, other amounts and obligations owed under the term loans (see Note 8).

 

Fair Value Measurements
Fair Value Measurements

 

4.Fair Value Measurements

 

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

 

·

Level 1 — Quoted prices in active markets for identical assets or liabilities.

 

·

Level 2 — Observable inputs (other than Level 1 quoted prices) such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data.

 

·

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

 

The Company’s common stock warrant liabilities are carried at fair value determined according to the fair value hierarchy described above. The Company has utilized an option pricing valuation model to determine the fair value of its outstanding common stock warrant liabilities. The inputs to the model include fair value of the common stock related to the warrant, exercise price of the warrant, expected term, expected volatility, risk-free interest rate and dividend yield. Prior to the IPO, the Company determined the fair value per share of the underlying common stock by taking into consideration its most recent sale of its convertible preferred stock as well as additional factors that the Company deems relevant.  Subsequent to the IPO, the warrants are valued using the fair value of common stock as of the measurement date. The Company historically has been a private company and lacks company-specific historical and implied volatility information of its stock. Therefore, it estimates its expected stock volatility based on the historical volatility of publicly traded peer companies for a term equal to the remaining contractual term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the warrants. The Company has estimated a 0% dividend yield based on the expected dividend yield and the fact that the Company has never paid or declared dividends. As several significant inputs are not observable, the overall fair value measurement of the warrants is classified as Level 3.

 

The following tables present information about the Company’s liabilities that are measured at fair value on a recurring basis as of September 30, 2015 and December 31, 2014 and indicate the level of the fair value hierarchy utilized to determine such fair value:

 

 

 

Fair Value Measurements as of

 

 

 

September 30, 2015 Using:

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

Liability for common stock warrants

 

$

 

 

146 

 

146 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements as of

 

 

 

December 31, 2014 Using:

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

Liability for common stock warrants

 

$

 

 

420 

 

420 

 

 

 

 

 

 

 

 

 

 

 

 

 

The liability for common stock warrants is included in “accrued and other current liabilities” in the balance sheet. The following table provides a rollforward of the aggregate fair values of the Company’s common stock warrants for which fair value is determined by Level 3 inputs:

 

Balance, December 31, 2014

 

$

420

 

Decrease in fair value through September 30, 2015

 

(274

)

Balance, September 30, 2015

 

$

146

 

 

The company recognized changes in the fair value of these warrants in “other (expense) income, net” in the statement of operations.

 

Product Warranties
Product Warranties

 

5.Product Warranties

 

The Company offers a limited warranty and a lifetime product replacement program for the Company’s silicone gel breast implants. Under the limited warranty, the Company will reimburse patients for certain out-of-pocket costs related to revision surgeries performed within ten years from the date of implantation in a covered event. Under the lifetime product replacement program, the Company provides no-charge replacement breast implants if a patient experiences a covered rupture. The programs are available to all patients implanted with the Company’s silicone breast implants after April 1, 2012 and are subject to the related program’s terms, conditions, claim procedures, limitations and exclusions. Timely completion of a device tracking and warranty enrollment form by the patient’s Plastic Surgeon is required to activate the programs and for the patient to be able to receive benefits under either program.

 

The following table provides a rollforward of the accrued warranties:

 

 

 

September 30,

 

 

 

2015

 

2014

 

Beginning balance

 

$

961

 

$

515

 

Payments made during the period

 

(15

)

 

Changes in accrual related to warranties issued during the period

 

438

 

366

 

Changes in accrual related to pre-existing warranties

 

7

 

(3

)

 

 

 

 

 

 

Ending balance

 

$

1,391

 

$

878

 

 

 

 

 

 

 

 

 

 

Net Loss Per Share
Net Loss Per Share

 

6.Net Loss Per Share

 

Basic loss per share attributable to common stockholders is computed by dividing net loss by the weighted average number of common shares outstanding during each period. Diluted loss per common share is computed by dividing net loss available to common stockholders by the weighted average number of common shares and dilutive potential common share equivalents then outstanding, to the extent they are dilutive. Potential common shares consist of shares issuable upon the exercise of stock options and warrants (using the treasury stock method), and the weighted average conversion of the convertible preferred stock into shares of common stock (using the if-converted method). Dilutive loss per share is the same as basic loss per share for all periods presented because the effects of potentially dilutive items were anti-dilutive.

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Net loss

 

$

(6,604

)

(1,452

)

(12,980

)

(2,614

)

Weighted average common shares outstanding, basic and diluted

 

15,207,870

 

209,344

 

15,022,022

 

208,648

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders

 

$

(0.43

)

(6.94

)

(0.86

)

(12.53

)

 

 

 

 

 

 

 

 

 

 

 

 

The Company excluded the following potentially dilutive securities, outstanding as of September 30, 2015 and 2014, from the computation of diluted net loss per share attributable to common stockholders for the three and nine months ended September 30, 2015 and 2014 because they had an anti-dilutive impact due to the net loss attributable to common stockholders incurred for the periods.

 

 

 

September 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Stock options to purchase common stock

 

1,354,989 

 

1,631,922 

 

Warrants for the purchase of common stock

 

47,710 

 

47,710 

 

Convertible preferred stock (as converted to common stock)

 

 

8,942,925 

 

 

 

 

 

 

 

 

 

1,402,699 

 

10,622,557 

 

 

 

 

 

 

 

 

Balance Sheet Components
Balance Sheet Components

 

7.Balance Sheet Components

 

a.Allowance for Sales Returns and Doubtful Accounts

 

The Company has established an allowance for sales returns of $11,965 and $10,018 as of September 30, 2015 and December 31, 2014, respectively, recorded net against accounts receivable in the balance sheet. The Company recorded an incremental increase in the allowance for sales returns during the quarter ended September 30, 2015 of approximately $2,993 as a result of the matters disclosed in Note 1e.

 

The Company has established an allowance for doubtful accounts of $263 and $312 as of September 30, 2015 and December 31, 2014, respectively, recorded net against accounts receivable in the balance sheet.

 

b.Property and Equipment

 

Property and equipment, net consist of the following:

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Leasehold improvements

 

$

82

 

$

69

 

Laboratory equipment and toolings

 

119

 

 

Computer equipment

 

276

 

138

 

Software

 

639

 

166

 

Office equipment

 

137

 

167

 

Furniture and fixtures

 

724

 

636

 

 

 

 

 

 

 

 

 

1,977

 

1,176

 

Less accumulated depreciation

 

(772

)

(621

)

 

 

 

 

 

 

 

 

$

1,205

 

$

555

 

 

 

 

 

 

 

 

 

 

Depreciation expense for the three months ended September 30, 2015 and 2014 was $64 and $47, respectively. Depreciation expense for the nine months ended September 30, 2015 and 2014 was $186 and $126, respectively.

 

c.Goodwill and Other Intangible Assets, net

 

The goodwill on the condensed balance sheets was $14,278 for all periods presented.

 

Goodwill represents the excess of the purchase price over the fair value of net assets of purchased businesses. Goodwill is not amortized, but instead subject to impairment tests on at least an annual basis and whenever circumstances suggest that goodwill may be impaired.  The Company’s annual test for impairment is performed as of October 1 of each fiscal year. The Company makes a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount before applying the two-step goodwill impairment test. If the Company concludes that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, it is not required to perform the two-step impairment test for that reporting unit.

 

Under the first step of the test, the Company is required to compare the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired and the second step of the test is not performed. If the results of the first step of the impairment test indicate that the fair value of a reporting unit does not exceed its carrying amount, then the second step of the test is required. The second step of the test compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill. The impairment loss is measured by the excess of the carrying amount of the reporting unit goodwill over the implied fair value of that goodwill.

 

On September 24, 2015, the Company experienced a significant decline in its common stock price, which was sustained through September 30, 2015. The significant decline in the Company’s common stock price for a sustained period, along with the impact from recent regulatory inquiries related to medical devices manufactured by Silimed, the Company’s contract manufacturer, were identified as potential indicators of impairment of goodwill and other intangibles. As a result, the Company was required to assess whether or not an impairment of its goodwill had occurred. The Company assessed the impact of the recent downward volatility in the Company’s common stock price and concluded that the sustained decline constituted a triggering event requiring an interim goodwill impairment test. The Company conducted the first step of the goodwill impairment test described above for its single reporting unit as of September 30, 2015. The fair value of the reporting unit exceeded its carrying value as of September 30, 2015, and therefore goodwill was determined to not be impaired as of September 30, 2015.

 

Subsequent to September 30, 2015, the fair value of the Company’s common stock continues to fluctuate and regularly trades below the book value per share.  As a result of the events described in Note 11, adverse changes in expected operating results, an extended period of the common stock trading significantly below book value per share, and unfavorable changes in circumstances related to Silimed may result in the identification of impairment indicators and require an additional interim goodwill impairment test during the fourth quarter of 2015, which may result in an impairment of goodwill.

 

The components of the Company’s intangible assets are as follows:

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Acquired FDA non-gel product approval

 

$

1,713

 

$

1,713

 

Less accumulated amortization

 

(1,645

)

(1,599

)

 

 

 

 

 

 

 

 

$

68

 

$

114

 

 

 

 

 

 

 

 

 

 

Amortization expense for the three months ended September 30, 2015 and 2014 was $15 and $23, respectively. Amortization expense for the nine months ended September 30, 2015 and 2014 was $46 and $70, respectively.

 

d.Accrued and Other Current Liabilities

 

Accrued and other current liabilities consist of the following:

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Accrued clinical trial and research and development expenses

 

$

101 

 

$

109 

 

Audit, consulting and legal fees

 

1,424 

 

72 

 

Payroll and related expenses

 

2,503 

 

2,497 

 

Accrued commission

 

1,777 

 

1,969 

 

Warrant liability

 

146 

 

420 

 

Other

 

1,092 

 

705 

 

 

 

 

 

 

 

 

 

$

7,043 

 

$

5,772 

 

 

 

 

 

 

 

 

 

 

Long-term Debt
Long-term Debt

 

8.Long-term Debt

 

On January 17, 2013, the Company entered into a Loan and Security Agreement, or the Original Term Loan Agreement, with Oxford Finance, LLC, or Oxford, providing for a $15,000 term loan facility consisting of original term loans of (i) a $7,500 tranche A term loan, (ii) a $2,500 tranche B term loan and (iii) a $5,000 tranche C term loan, maturing on February 1, 2017.  The term loan facility is collateralized by a first-priority security interest in substantially all of the Company’s assets.  Borrowings under the term loan facility bear interest at a rate equal to 8.4% per annum and the Original Term Loan Agreement provides for interest-only payments through June 30, 2015.  The term loans include an additional interest lump sum payment, or Final Payment, of $975 due on February 1, 2017.

 

On June 30, 2014, the Company entered into the Amended and Restated Loan and Security Agreement, or the Amended Term Loan Agreement, with Oxford, under which the interest-only period for the original term loans was extended to August 1, 2015 and borrowed an additional $10,000 in a fourth tranche (tranche D) loan maturing on January 1, 2019. The term loans are collateralized by a first-priority security interest in substantially all of the Company’s assets. The term loans bear interest at a rate equal to 8.4% per annum. The interest-only period for the tranche A, B and C term loans ended on August 1, 2015 and the interest-only period for the tranche D term loan would have ended on the same date, but was extended another year as the Company raised at least $50,000 in gross proceeds as part of an initial public offering before June 30, 2015 (see Note 1). The tranche D term loan includes a Final Payment of $650 due on January 1, 2019.

 

The Amended Term Loan Agreement contains various negative and affirmative covenants, including certain restrictive covenants that limit the Company’s ability to transfer or dispose of certain assets, engage in new lines of business, change the composition of Company management, merge with or acquire other companies, incur additional debt, create new liens and encumbrances, pay dividends or subordinated debt and enter into material transactions with affiliates, among others. The Amended Term Loan Agreement also contains financial reporting requirements.

 

The aggregate maturities of long-term debt as of September 30, 2015 are: $2,270 in the remaining three months of 2015, $11,094 in 2016, $5,558 in 2017, $4,223 in 2018 and $368 in 2019.

 

In connection with the Original Term Loan Agreement and the Amended Term Loan Agreement, the Company issued to Oxford (i) seven-year warrants in January 2013 to purchase shares of the Company’s common stock with a value equal to 3.0% of the tranche A, B and C term loans amounts and (ii) seven-year warrants in June 2014 to purchase shares of the Company’s common stock with a value equal to 2.5% of the tranche D term loan amount.  The warrants have an exercise price per share of $14.671.

 

On October 27, 2015, Oxford issued a notice to the Company indicating that, in connection with the recent events involving Silimed and the Company, certain events of default occurred and continue to exist under the Amended Term Loan Agreement. On October 28, 2015, Sientra repaid all principal, interest, other amounts and obligations owed to Oxford under the term loans for a total of $24,539, following which the Company has no outstanding debt obligations. As a result of the Company’s default of the term loans, the Company has presented the long-term obligation as a current liability as of September 30, 2015, including the recognition of interest expense in the amount of $808 during the three months ended September 30, 2015, for the Final Payments.

 

Stockholders' Equity
Stockholders' Equity

 

9.Stockholders’ Equity

 

a.Authorized Stock

 

The Company’s Amended and Restated Certificate of Incorporation authorizes the Company to issue 210,000,000 shares of common and preferred stock, consisting of 200,000,000 shares of common stock with $0.01 par value and 10,000,000 shares of preferred stock with $0.01 par value. As of September 30, 2015 and December 31, 2014, the Company had no preferred stock issued or outstanding.

 

b.Stock Option Plan

 

In April 2007, the Company adopted the 2007 Equity Incentive Plan, or the 2007 Plan. The 2007 Plan provides for the granting of stock options to employees, directors and consultants of the Company. Options granted under the 2007 Plan may either be incentive stock options or nonstatutory stock options. Incentive stock options, or ISOs, may be granted only to Company employees.

 

Nonstatutory stock options, or NSOs, may be granted to all eligible recipients. A total of 1,690,448 shares of the Company’s common stock were reserved for issuance for the 2007 Plan.

 

Our board of directors adopted our 2014 Equity Incentive Plan, or 2014 Plan, in July 2014, and our stockholders approved the 2014 Plan in October 2014. The 2014 Plan became effective upon completion of the IPO, at which time the Company ceased granting awards under the 2007 Plan. Under the 2014 Plan, the Company may issue ISO, NSOs, stock appreciation rights, restricted stock awards, restricted stock unit awards and other forms of stock awards, or collectively, stock awards, all of which may be granted to employees, including officers, non-employee directors and consultants of us and our affiliates. ISOs may be granted only to employees.  A total of 1,027,500 shares of common stock were initially reserved for issuance under the 2014 Plan, subject to certain annual increases.  On January 1, 2015, the 2014 Plan reserved an additional 298,259 shares of common stock for issuance.

 

Options under the 2007 Plan and the 2014 Plan may be granted for periods of up to ten years as determined by our board of directors, provided, however, that (i) the exercise price of an ISO shall not be less than 100% of the estimated fair value of the shares on the date of grant, and (ii) the exercise price of an ISO granted to a more than 10% shareholder shall not be less than 110% of the estimated fair value of the shares on the date of grant. An NSO has no such exercise price limitations. The options generally vest with 25% of the grant vesting on the first anniversary and the balance vesting monthly on a straight-lined basis over the requisite service period of three additional years for the award.  Additionally, options have been granted to certain key executives which vest upon achievement of performance conditions based on net sales targets over the performance period. The vesting provisions of individual options may vary but provide for vesting of at least 25% per year.

 

The following summarizes all option activity under the 2007 and 2014 Plan:

 

 

 

Option Shares

 

Weighted
average
exercise price

 

Weighted average
remaining
contractual
term(years)

 

Balances at December 31, 2014

 

1,654,906

 

$

4.25

 

5.48

 

Granted

 

631,285

 

16.47

 

 

 

Exercised

 

(34,700

)

3.53

 

 

 

Forfeited

 

(24,514

)

12.24

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2015

 

2,226,977

 

$

7.64

 

6.00

 

 

 

 

 

 

 

 

 

 

 

For stock-based awards the Company recognizes compensation expense based on the grant date fair value using the Black-Scholes option valuation model.  Stock-based compensation expense was $556 and $169 for the three months ended September 30, 2015 and 2014, respectively. Stock-based compensation expense was $1,445 and $368 for the nine months ended September 30, 2015 and 2014, respectively. As of September 30, 2015, there was $4,425 of unrecognized compensation costs related to stock options. The expense is recorded within the operating expense captions in the statement of operations based on the employees receiving the awards.  These costs are expected to be recognized over weighted average period of 2.79 years.

 

c.Employee Stock Purchase Plan

 

The Company’s board of directors adopted the 2014 Employee Stock Purchase Plan, or ESPP, in July 2014, and our stockholders approved the ESPP in October 2014. The ESPP allows eligible employees to purchase shares of the Company’s common stock at a discount through payroll deductions of up to 15% of their eligible compensation, subject to any plan limitations. The ESPP provides offering periods not to exceed 27 months, and each offering period will include purchase periods, which will be the approximately six-month period commencing with one exercise date and ending with the next exercise date, except that the first offering period commenced on the first trading day following the effective date of the Company’s registration statement.  Employees are able to purchase shares at 85% of the lower of the fair market value of the Company’s common stock on the first trading day of the offering period or on the exercise date.  A total of 255,500 shares of common stock were initially reserved for issuance under the ESPP, subject to certain annual increases.  On January 1, 2015, the ESPP reserved an additional 149,129 shares of common stock for issuance.

 

The Company estimated the fair value of employee stock purchase rights using the Black-Scholes model. Stock-based compensation expense related to the ESPP was $121 for the three months ended September 30, 2015, and $314 for the nine months ended September 30, 2015.

 

Commitments and Contingencies
Commitments and Contingencies

 

10.Commitments and Contingencies

 

a.Operating Leases

 

The Company’s lease for its general office facility in Santa Barbara, California expires in February 2020. The Company also leases additional industrial space for warehouse, research and development and additional general office use.  Rent expense was $129 and $152 for the three months ended September 30, 2015 and 2014, respectively, and $393 and $332 for the nine months ended September 30, 2015 and 2014, respectively. The Company recognizes rent expense on a straight-line basis over the lease term.

 

b.Contingencies

 

The Company is subject to claims and assessment from time to time in the ordinary course of business. The Company accrues a liability for such matters when it is probable that future expenditures will be made and such expenditures can be reasonably estimated. There were no contingent liabilities requiring accrual at September 30, 2015.

 

In 2012, the Company filed a claim with the Hartford Insurance Company, or Hartford, for reimbursement of legal costs incurred in connection with litigation with a competitor that was resolved in 2013.  The Company held a D&O insurance policy with Hartford, and the Company and Hartford settled the matter in May of 2014.  Upon the conclusion of the matter in 2014, the Company received settlement payments from Hartford and recovery of costs associated with the litigation of $0 and $2,358 for the three and nine months ended September 30, 2014, respectively.

 

On September 25, 2015, a lawsuit styled as a class action of Sientra’s stockholders was filed in the United States District Court for the Central District of California. The lawsuit names Sientra and certain of its officers as defendants and alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, in connection with allegedly false and misleading statements concerning Sientra’s business, operations, and prospects.  The plaintiff seeks damages and an award of reasonable costs and expenses, including attorneys’ fees.  This lawsuit is in its initial stages, and no substantive proceedings have occurred to date.

 

On October 28, 2015 and November 5, 2015, two lawsuits styled as class actions of Sientra’s stockholders were filed in the Superior Court of California for the County of San Mateo. The lawsuits name Sientra, certain of its officers and directors, and the underwriters associated with Sientra’s follow-on public offering that closed on September 23, 2015 as defendants. The lawsuits allege violations of Sections 11, 12(a)(2), and 15 of the Securities Act of 1933, as amended, or the Securities Act, in connection with allegedly false and misleading statements in Sientra’s offering documents associated with the follow-on offering concerning Sientra’s business, operations, and prospects. The plaintiffs seek damages and an award of reasonable costs and expenses, including attorneys’ fees. The lawsuits are in their initial stages, and no substantive proceedings have occurred to date.

 

Subsequent Events
Subsequent Events

 

11.Subsequent Events

 

a.Silimed

 

On September 23, 2015, MHRA, an executive agency of the U.K., issued a press release announcing the suspension of sales and implanting in U.K of all medical devices manufactured by Silimed following the suspension of the CE certificate of these products issued by TUV SUD, Silimed’s notified body under EU regulation. The suspension of Silimed’s CE certificate by TUV SUD followed TUV SUD’s inspection at Silimed’s manufacturing facilities in Brazil, and was a result of GMP non-conformities relating to particles discovered on breast implants. Breast implants have stringent standards for manufacturing and robust quality systems, but there is no specific or defined standard for particles on breast implants. MHRA noted that no risks to patient health have been identified in connection with implanting Silimed products, and, accordingly, there is no need to adopt any procedure or action for those patients who have received them.

 

On October 2, 2015, the Brazilian regulatory agency ANVISA and the Department of the Secretary of State of the State of Rio de Janeiro announced that while they continue to review the technical compliance related GMP of Silimed’s manufacturing facility, and due to the announced suspension of the CE certificate, they temporarily suspended the manufacturing and shipment of all medical devices made by Silimed, including products manufactured for Sientra. ANVISA reiterated that no risks to patient health have been identified in connection with implanting Silimed products, and, accordingly, there is no need to adopt any procedure or action for those patients who have received them. Furthermore, ANVISA also indicated that, based on their contact to date with foreign regulatory authorities, there have been no reports of adverse events related to the use of Silimed products.

 

b.Voluntary Suspension of Sales

 

On October 9, 2015, the Company voluntarily placed a hold on the sale of all Sientra devices manufactured by Silimed and recommended that plastic surgeons discontinue implanting the devices until further notice.  The Company has been in ongoing discussions with the FDA regarding Brazilian regulatory inquiries into Silimed products, and is conducting its own review of the matter with the assistance of independent experts in quality management systems, GMP and data-based risk assessment.  The FDA has also reiterated that no reports of adverse events and no risks to patient health have been identified in connection with implanting Silimed-manufactured products.

 

c.Fire at Silimed Manufacturing Facility

 

On October 22, 2015, there was a fire at one of Silimed’s two manufacturing buildings in Rio de Janeiro, Brazil. The fire occurred in the building where Sientra’s breast implants are primarily manufactured, or building F2. Silimed has indicated to the Company that a smaller production facility in Silimed’s second building, or building F1, which was not impacted by the fire, has the potential to be modified for breast implant manufacturing. In order to commence the manufacturing of breast implants, certain areas in building F1 would need to be reconfigured and receive certification and approval by appropriate regulatory bodies.

 

d.Debt

 

On October 27, 2015, Oxford issued a notice to Sientra indicating that, in connection with the recent events involving Silimed and the Company, certain events of default have occurred and continue to exist under the Amended Term Loan Agreement. On October 28, 2015, Sientra repaid all principal, interest, other amounts and obligations owed to Oxford under the term loans for a total of $24,539, following which the Company has no outstanding debt obligations.

 

e.Separation Agreement with Hani Zeini

 

On November 12, 2015, Hani Zeini stepped down from his role as President and Chief Executive Officer of the Company. Mr. Zeini continues to serve as a non-independent member of the board of directors. The Company entered into a Separation Agreement, or the Separation Agreement, with Hani Zeini on November 12, 2015. Pursuant to the Separation Agreement, Mr. Zeini is entitled to receive: (i) a lump sum payment of eight hundred seventy-one thousand dollars, which is equivalent to the sum of twelve (12) months of his base salary as in effect on the separation date plus the annual bonus earned by Mr. Zeini in connection with the completion of the fiscal year prior to the separation date, and (ii) up to twelve (12) months of company-paid health insurance premiums to continue his coverage. The benefits provided for in the Separation Agreement are consistent with the benefits that Mr. Zeini would have been entitled to receive under his Employment Agreement, dated October 15, 2014, had Mr. Zeini been terminated without cause, except that the unvested portion of all Company equity awards granted to Mr. Zeini will not accelerate as such equity awards shall continue to vest for so long as Mr. Zeini continues to provide services to the Company.

 

f.Consulting Agreement with Hani Zeini

 

The Company entered into a Consulting Agreement, or the Consulting Agreement, with Mr. Zeini on November 12, 2015. The term of the Consulting Agreement is effective as of November 12, 2015 through December 31, 2016.  Pursuant to the Consulting Agreement, Mr. Zeini shall provide consulting services to the Company in the area of his experience and expertise for up to thirty (30) hours per month and Mr. Zeini will be compensated in the amount of forty-three thousand four hundred sixteen per month.

 

g.Employment Agreement with Jeffrey Nugent

 

On November 12, 2015, the Company announced that Jeffrey Nugent was appointed as the Company’s Chairman and Chief Executive Officer, effective immediately. Mr. Nugent replaced Nicholas Simon as Chairman of the board of directors, but Mr. Simon will remain on the board as Lead Independent Director. The Company entered into an Employment Agreement, or the Employment Agreement, with Mr. Nugent on November 12, 2015. Pursuant to his Employment Agreement: (i) Mr. Nugent’s base salary will be six hundred thousand dollars per year, (ii) Mr. Nugent shall be provided a signing bonus of one hundred thousand dollars, (iii) Mr. Nugent shall be eligible to earn an annual discretionary performance-based bonus of up to 75% of his base salary, and (iv) for the partial 2015 calendar year, Mr. Nugent shall also be eligible for a discretionary performance-based bonus of up to fifty thousand dollars. Additionally, pursuant to the employment agreement, subject to the approval of the board of directors: (i) concurrent with the effective date of the Employment Agreement, Mr. Nugent shall be granted: (A) a nonqualified stock option to purchase 621,931 shares of the Company’s common stock at a per share exercise price equal to the fair market value of the Company’s common stock on the grant date, and (B) a restricted stock unit award covering 17,993 shares of the Company’s common stock, and (ii) on January 1, 2016, Mr. Nugent shall be granted an additional nonqualified stock option to purchase 241,753 shares of the Company’s common stock at a per share exercise price equal to the fair market value of the Company’s common stock on the day of grant. The stock options shall vest in equal monthly installments over a forty-eight (48) month period commencing on the first month anniversary of the effective date of the Employment Agreement and the restricted stock units shall vest in equal three (3) month installments over a forty-eight (48) month period commencing on the three month anniversary of the effective date of the Employment Agreement. Mr. Nugent is also entitled to participate in all employee benefit programs for which he is eligible, and the Company has also agreed to reimburse Mr. Nugent for any necessary and reasonable, out-of-pocket relocation expenses incurred by Mr. Nugent in connection with his relocation to a residence located near the Company.

 

h.Separation Agreement with Joel Smith

 

On November 12, 2015, Joel Smith stepped down from his role as General Counsel, Secretary and Chief Compliance Officer of the Company. Subject to Mr. Smith entering into a separation agreement and release of claims in a form reasonably satisfactory to the company, Mr. Smith will receive severance benefits consistent with the benefits that Mr. Smith would have been entitled to receive under his Employment Agreement, dated February 1, 2015, had Mr. Smith been terminated without cause.

Summary of Significant Accounting Policies (Policies)

 

a.Basis of Presentation

 

The accompanying unaudited condensed financial statements in this Quarterly Report on Form 10-Q have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP, and the rules and regulations of the U.S. Securities and Exchange Commission, or SEC.  Accordingly, they do not include certain footnotes and financial presentations normally required under accounting principles generally accepted in the United States of America for complete financial reporting.  The interim financial information is unaudited, but reflects all normal adjustments and accruals which are, in the opinion of management, considered necessary to provide a fair presentation for the interim periods presented. The accompanying condensed financial statements should be read in conjunction with the Company’s audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014 filed with the SEC on March 18, 2015, or the Annual Report. The results for the three and nine months ended September 30, 2015 are not necessarily indicative of results to be expected for the year ending December 31, 2015, any other interim periods, or any future year or period.

 

 

b.Going Concern

 

The accompanying financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. Silimed is the Company’s sole source manufacturer of silicone gel breast implants, tissue expanders and other products. The continuation of the Company as a going concern is dependent upon many factors including the satisfactory resolution of the regulatory inquiries of Silimed’s medical devices, Silimed’s ability to resume the manufacturing of the Company’s medical devices, and the resumption of the sale of the Company’s products. Since inception, the Company has incurred net losses. At September 30, 2015, the Company had cash and cash equivalents of $148,939. The Company’s ability to continue to meet its obligations and to achieve its business objectives is dependent upon, amongst other things, generating sufficient revenues. The Company believes that it has the ability to continue as a going concern for at least 12 months. These financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

 

 

c.Use of Estimates

 

The preparation of the condensed financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

 

 

d.Significant Accounting Policies

 

There have been no significant changes to the accounting policies during the three and nine months ended September 30, 2015, as compared to the significant accounting policies described in the “Notes to Financial Statements” in the Annual Report.

 

 

e.Recent Accounting Pronouncements

 

In May 2014, the Financial Accounting Standards Board, or FASB, issued accounting standard update, or ASU, 2014-09, Revenue from Contracts with Customers.  The standard was issued to provide a single framework that replaces existing industry and transaction specific US GAAP with a five step analysis of transactions to determine when and how revenue is recognized. The accounting standard update will replace most existing revenue recognition guidance in US GAAP when it becomes effective.  In July 2015, the FASB voted to approve the deferral of the effective date of ASU 2014-09 by one year.  Therefore, ASU 2014-09 will become effective for the Company beginning in fiscal year 2018. Early adoption would be permitted for the Company beginning in fiscal year 2017. The standard permits the use of either the retrospective or cumulative transition method. The Company is currently evaluating the accounting, transition and disclosure requirements of the standard and cannot currently estimate the financial statement impact of adoption.

 

In April 2015, the FASB issued accounting standard update 2015-03, Interest — Imputation of Interest.  The standard was issued to simplify the presentation of debt issuance costs and require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts.  This accounting standard update will be effective for the Company beginning in fiscal year 2016.  The Company anticipates there will be no material impact on its financial statement upon adoption of this guidance.

 

In April 2015, the FASB issued accounting standard update 2015-05, Intangibles — Goodwill and Other — Internal-Use Software.  The standard was issued to provide guidance to customers about whether a cloud computing arrangement includes a software license.  If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses.  If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract.  This accounting standard update will be effective for the Company beginning in fiscal year 2016.  The Company anticipates there will be no material impact on its financial statement upon adoption of this guidance.

 

In July 2015, the FASB issued accounting standard update 2015-11, Inventory — Simplifying the Measurement of Inventory.  The standard simplifies the subsequent measurement of inventory by requiring inventory to be measured at the lower of cost and net realizable value, thereby simplifying the current guidance under which an entity must measure inventory at the lower of cost or market. The accounting standard update will not apply to inventories that are measured by using either the last-in, first-out method or the retail inventory method. This accounting standard update will be effective for the Company beginning in fiscal year 2017. The Company anticipates there will be no material impact on its financial statement upon adoption of this guidance.

 

Fair Value Measurements (Tables)

 

 

 

Fair Value Measurements as of

 

 

 

September 30, 2015 Using:

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

Liability for common stock warrants

 

$

 

 

146 

 

146 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements as of

 

 

 

December 31, 2014 Using:

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

Liabilities:

 

 

 

 

 

 

 

 

 

Liability for common stock warrants

 

$

 

 

420 

 

420 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2014

 

$

420

 

Decrease in fair value through September 30, 2015

 

(274

)

Balance, September 30, 2015

 

$

146

 

 

Product Warranties (Tables)
Schedule of rollforward of the accrued warranties

 

 

 

September 30,

 

 

 

2015

 

2014

 

Beginning balance

 

$

961

 

$

515

 

Payments made during the period

 

(15

)

 

Changes in accrual related to warranties issued during the period

 

438

 

366

 

Changes in accrual related to pre-existing warranties

 

7

 

(3

)

 

 

 

 

 

 

Ending balance

 

$

1,391

 

$

878

 

 

 

 

 

 

 

 

 

 

Net Loss Per Share (Tables)

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

 

2015

 

2014

 

2015

 

2014

 

Net loss

 

$

(6,604

)

(1,452

)

(12,980

)

(2,614

)

Weighted average common shares outstanding, basic and diluted

 

15,207,870

 

209,344

 

15,022,022

 

208,648

 

 

 

 

 

 

 

 

 

 

 

Net loss per share attributable to common stockholders

 

$

(0.43

)

(6.94

)

(0.86

)

(12.53

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Stock options to purchase common stock

 

1,354,989 

 

1,631,922 

 

Warrants for the purchase of common stock

 

47,710 

 

47,710 

 

Convertible preferred stock (as converted to common stock)

 

 

8,942,925 

 

 

 

 

 

 

 

 

 

1,402,699 

 

10,622,557 

 

 

 

 

 

 

 

 

Balance Sheet Components (Tables)

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Leasehold improvements

 

$

82

 

$

69

 

Laboratory equipment and toolings

 

119

 

 

Computer equipment

 

276

 

138

 

Software

 

639

 

166

 

Office equipment

 

137

 

167

 

Furniture and fixtures

 

724

 

636

 

 

 

 

 

 

 

 

 

1,977

 

1,176

 

Less accumulated depreciation

 

(772

)

(621

)

 

 

 

 

 

 

 

 

$

1,205

 

$

555

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Acquired FDA non-gel product approval

 

$

1,713

 

$

1,713

 

Less accumulated amortization

 

(1,645

)

(1,599

)

 

 

 

 

 

 

 

 

$

68

 

$

114

 

 

 

 

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

 

 

2015

 

2014

 

 

 

 

 

 

 

Accrued clinical trial and research and development expenses

 

$

101 

 

$

109 

 

Audit, consulting and legal fees

 

1,424 

 

72 

 

Payroll and related expenses

 

2,503 

 

2,497 

 

Accrued commission

 

1,777 

 

1,969 

 

Warrant liability

 

146 

 

420 

 

Other

 

1,092 

 

705 

 

 

 

 

 

 

 

 

 

$

7,043 

 

$

5,772 

 

 

 

 

 

 

 

 

 

 

Stockholders' Equity (Tables)
Summary of option activity

 

 

 

Option Shares

 

Weighted
average
exercise price

 

Weighted average
remaining
contractual
term(years)

 

Balances at December 31, 2014

 

1,654,906

 

$

4.25

 

5.48

 

Granted

 

631,285

 

16.47

 

 

 

Exercised

 

(34,700

)

3.53

 

 

 

Forfeited

 

(24,514

)

12.24

 

 

 

 

 

 

 

 

 

 

 

Balances at September 30, 2015

 

2,226,977

 

$

7.64

 

6.00

 

 

 

 

 

 

 

 

 

 

 

Formation and Business of the Company (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 0 Months Ended 0 Months Ended
Nov. 3, 2014
Jun. 30, 2014
Tranche D term loan
Nov. 3, 2014
Tranche D term loan
IPO
Nov. 3, 2014
Common stock
Oct. 10, 2014
Common stock
Nov. 3, 2014
Common stock
IPO
Nov. 3, 2014
Common stock
IPO
Sep. 23, 2015
Common stock
Follow-On Offering
Sep. 23, 2015
Common stock
Follow-On Offering
Nov. 3, 2014
Common stock
Over allotment option exercised by underwriters
Nov. 3, 2014
Convertible preferred stock
Oct. 10, 2014
Preferred Stock
Oct. 9, 2014
Preferred Stock
Shares issued
 
 
 
 
 
5,750,000 
 
3,000,000 
 
750,000 
 
 
 
Public offering price (in dollars per share)
 
 
 
 
 
 
$ 15.00 
 
$ 22.00 
 
 
 
 
Net proceeds after deducting underwriting discounts and commissions and offering expenses
 
 
 
 
 
$ 77,035 
 
$ 61,397 
 
 
 
 
 
Payment of underwriting discounts and commissions and offering expenses
 
 
 
 
 
9,215 
 
3,960 
 
 
 
 
 
Threshold amount of gross proceeds in IPO to determine extended interest period of debt instruments
 
50,000 
50,000 
 
 
 
 
 
 
 
 
 
 
Offering expenses
 
 
 
 
 
 
 
$ 643 
 
 
 
 
 
Convertible preferred stock, shares outstanding
 
 
 
 
 
 
 
 
 
 
 
 
Conversion rate
 
 
 
 
0.364 
 
 
 
 
 
2.75 
2.75 
1.00 
Shares issued on conversion of Series A, Series B and Series C preferred stock
 
 
 
8,942,925 
 
 
 
 
 
 
 
 
 
Summary of Significant Accounting Policies (Details) (USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2014
Dec. 31, 2013
Summary of Significant Accounting Policies
 
 
 
 
Cash and cash equivalents
$ 148,939 
$ 96,729 
$ 19,816 
$ 9,722 
Fair Value of Financial Instruments (Details) (Term loan agreement, USD $)
In Thousands, unless otherwise specified
Sep. 30, 2015
Term loan agreement
 
Long-term Debt
 
Carrying value of the long-term debt
$ 25,138 
Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2015
Recurring
Warrants
Dec. 31, 2014
Recurring
Warrants
Sep. 30, 2015
Recurring
Level 3
Warrants
Dec. 31, 2014
Recurring
Level 3
Warrants
Fair Value Measurements
 
 
 
 
 
Estimated dividend yield
0.00% 
 
 
 
 
Liability for common stock warrants
 
$ 146 
$ 420 
$ 146 
$ 420 
Fair Value Measurements (Details 2) (Warrants, USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Sep. 30, 2015
Other (expense) income net
Fair values of the Company's common stock warrants determined by Level 3 inputs.
 
 
 
Balance at beginning of the period
$ 146 
$ 420 
 
Decrease in fair value
 
 
(274)
Balance at the end of the period
$ 146 
$ 420 
 
Product Warranties (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Product Warranties
 
 
Period to claim reimbursement under limited warranty program
10 years 
 
Beginning balance
$ 961 
$ 515 
Payments made during the period
(15)
 
Changes in accrual related to warranties issued during the period
438 
366 
Changes in accrual related to pre-existing warranties
(3)
Ending balance
$ 1,391 
$ 878 
Net Loss Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Net loss per share
 
 
 
 
Net loss
$ (6,604)
$ (1,452)
$ (12,980)
$ (2,614)
Weighted average common shares outstanding, basic and diluted
15,207,870 
209,344 
15,022,022 
208,648 
Net loss per share attributable to common stockholders
$ (0.43)
$ (6.94)
$ (0.86)
$ (12.53)
Potentially dilutive securities
 
 
 
 
Potentially dilutive securities
 
 
1,402,699 
10,622,557 
Stock options to purchase common stock
 
 
 
 
Potentially dilutive securities
 
 
 
 
Potentially dilutive securities
 
 
1,354,989 
1,631,922 
Warrants
 
 
 
 
Potentially dilutive securities
 
 
 
 
Potentially dilutive securities
 
 
47,710 
47,710 
Convertible preferred stock
 
 
 
 
Potentially dilutive securities
 
 
 
 
Potentially dilutive securities
 
 
 
8,942,925 
Balance Sheet Components (Details) (USD $)
In Thousands, unless otherwise specified
9 Months Ended
Sep. 30, 2015
Dec. 31, 2014
Balance Sheet Components
 
 
Allowance for sales returns
$ 11,965 
$ 10,018 
Increase in allowance for sales returns
2,993 
 
Allowance for doubtful accounts
$ 263 
$ 312 
Balance Sheet Components (Details 2) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
$ 1,977 
 
$ 1,977 
 
$ 1,176 
Less accumulated depreciation
(772)
 
(772)
 
(621)
Property and equipment, net
1,205 
 
1,205 
 
555 
Depreciation expense
64 
47 
186 
126 
 
Leasehold improvements
 
 
 
 
 
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
82 
 
82 
 
69 
Laboratory equipment and toolings
 
 
 
 
 
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
119 
 
119 
 
 
Computer equipment
 
 
 
 
 
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
276 
 
276 
 
138 
Software
 
 
 
 
 
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
639 
 
639 
 
166 
Office equipment
 
 
 
 
 
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
137 
 
137 
 
167 
Furniture and fixtures
 
 
 
 
 
Property and equipment, net
 
 
 
 
 
Property and equipment, gross
$ 724 
 
$ 724 
 
$ 636 
Balance Sheet Components (Details 3) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Dec. 31, 2014
Goodwill and intangible assets
 
 
 
 
 
Goodwill
$ 14,278 
 
$ 14,278 
 
$ 14,278 
Other intangible assets
 
 
 
 
 
Intangible assets, net
68 
 
68 
 
114 
Amortization expense
15 
23 
46 
70 
 
Accrued and other current liabilities
 
 
 
 
 
Accrued clinical trial and research and development expenses
101 
 
101 
 
109 
Audit, consulting and legal fees
1,424 
 
1,424 
 
72 
Payroll and related expenses
2,503 
 
2,503 
 
2,497 
Accrued commission
1,777 
 
1,777 
 
1,969 
Warrant liability
146 
 
146 
 
420 
Other
1,092 
 
1,092 
 
705 
Total
7,043 
 
7,043 
 
5,772 
Acquired FDA non-gel product approval
 
 
 
 
 
Other intangible assets
 
 
 
 
 
Intangible assets, gross
1,713 
 
1,713 
 
1,713 
Less accumulated amortization
(1,645)
 
(1,645)
 
(1,599)
Intangible assets, net
$ 68 
 
$ 68 
 
$ 114 
Long-term Debt (Details) (USD $)
In Thousands, except Per Share data, unless otherwise specified
3 Months Ended 0 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended 1 Months Ended
Sep. 30, 2015
Sep. 30, 2015
Term loan agreement
Jan. 17, 2013
Term loan agreement
Oct. 28, 2015
Term loan agreement
Subsequent events
Oct. 28, 2015
Term loan agreement
Subsequent events
Jun. 30, 2014
Term loan agreement
Warrants
Jan. 31, 2013
Term loan agreement
Warrants
Jan. 17, 2013
Tranche A term loan
Jan. 31, 2013
Tranche A term loan
Warrants
Jan. 17, 2013
Tranche B term loan
Jan. 31, 2013
Tranche B term loan
Warrants
Jan. 17, 2013
Tranche C term loan
Jan. 31, 2013
Tranche C term loan
Warrants
Jun. 30, 2014
Tranche D term loan
Jun. 30, 2014
Tranche D term loan
Warrants
Long-term Debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Face amount
 
 
$ 15,000 
 
 
 
 
$ 7,500 
 
$ 2,500 
 
$ 5,000 
 
$ 10,000 
 
Interest rate (as a percent)
 
 
8.40% 
 
 
 
 
 
 
 
 
 
 
8.40% 
 
Final payment
 
 
975 
 
 
 
 
 
 
 
 
 
 
650 
 
Threshold amount of gross proceeds in IPO to determine extended interest period of debt instruments
 
 
 
 
 
 
 
 
 
 
 
 
 
50,000 
 
Aggregate maturities of long-term debt
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Remaining 3 months of 2015
2,270 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2016
11,094 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2017
5,558 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018
4,223 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
368 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Warrants
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Term of warrants
 
 
 
 
 
7 years 
7 years 
 
 
 
 
 
 
 
 
Value of common stock that can be purchased as a percentage of term loan
 
 
 
 
 
 
 
 
3.00% 
 
3.00% 
 
3.00% 
 
2.50% 
Share price (in dollars per share)
 
 
 
 
 
$ 14.671 
$ 14.671 
 
 
 
 
 
 
 
 
Settlement of term loan
 
 
 
24,539 
 
 
 
 
 
 
 
 
 
 
 
Outstanding debt obligations
 
25,138 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense for final payment
 
$ 808 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stockholders' Equity (Details) (USD $)
Sep. 30, 2015
Dec. 31, 2014
Stock other disclosures
 
 
Shares authorized
210,000,000 
210,000,000 
Common stock, shares authorized
200,000,000 
200,000,000 
Common stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, par value (in dollars per share)
$ 0.01 
$ 0.01 
Preferred stock, shares issued
Preferred stock, shares outstanding
Stockholders' Equity (Details 2) (USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 1 Months Ended 0 Months Ended 3 Months Ended 9 Months Ended 12 Months Ended 9 Months Ended
Apr. 30, 2007
2007 Plan
Jan. 1, 2015
2014 Plan
Nov. 3, 2014
2014 Plan
Apr. 30, 2007
Maximum
2007 Plan
Nov. 3, 2014
Maximum
2014 Plan
Sep. 30, 2015
Stock options
Sep. 30, 2014
Stock options
Sep. 30, 2015
Stock options
Sep. 30, 2014
Stock options
Dec. 31, 2014
Stock options
Sep. 30, 2015
Stock options
Minimum
Sep. 30, 2015
Stock options
First anniversary
Sep. 30, 2015
Incentive stock options
Minimum
Sep. 30, 2015
Incentive stock options
Minimum
Shareholder owning more than 10% voting power
Stockholders' Equity
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock reserved for issuance (in shares)
1,690,448 
 
1,027,500 
 
 
 
 
 
 
 
 
 
 
 
Additional common stock reserved for issuance (in shares)
 
298,259 
 
 
 
 
 
 
 
 
 
 
 
 
Grant period of stock awards
 
 
 
10 years 
10 years 
 
 
 
 
 
 
 
 
 
Purchase price of awards expressed as a percentage of fair value of shares on the date of grant
 
 
 
 
 
 
 
 
 
 
 
 
100.00% 
110.00% 
Percentage of voting power owned by shareholder
 
 
 
 
 
 
 
 
 
 
 
 
 
10.00% 
Number of additional years of requisite service period
 
 
 
 
 
 
 
3 years 
 
 
 
 
 
 
Vesting percentage
 
 
 
 
 
 
 
 
 
 
25.00% 
25.00% 
 
 
Number of options
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at the beginning of period (in shares)
 
 
 
 
 
 
 
1,654,906 
 
 
 
 
 
 
Options granted (in shares)
 
 
 
 
 
 
 
631,285 
 
 
 
 
 
 
Options exercised (in shares)
 
 
 
 
 
 
 
(34,700)
 
 
 
 
 
 
Options forfeited (in shares)
 
 
 
 
 
 
 
(24,514)
 
 
 
 
 
 
Balance at the end of the period (in shares)
 
 
 
 
 
2,226,977 
 
2,226,977 
 
1,654,906 
 
 
 
 
Weighted average exercise price
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at the beginning of period (in dollars per share)
 
 
 
 
 
 
 
$ 4.25 
 
 
 
 
 
 
Options granted (in dollars per share)
 
 
 
 
 
 
 
$ 16.47 
 
 
 
 
 
 
Options exercised (in dollars per share)
 
 
 
 
 
 
 
$ 3.53 
 
 
 
 
 
 
Options forfeited (in dollars per share)
 
 
 
 
 
 
 
$ 12.24 
 
 
 
 
 
 
Balance at the end of period (in dollars per share)
 
 
 
 
 
$ 7.64 
 
$ 7.64 
 
$ 4.25 
 
 
 
 
Weighted average remaining contractual term
 
 
 
 
 
 
 
6 years 
 
5 years 5 months 23 days 
 
 
 
 
Additional information
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Stock-based compensation expense
 
 
 
 
 
$ 556 
$ 169 
$ 1,445 
$ 368 
 
 
 
 
 
Unrecognized compensation costs (in dollars)
 
 
 
 
 
$ 4,425 
 
$ 4,425 
 
 
 
 
 
 
Weighted average period over which unrecognized compensation costs are expected to be recognized
 
 
 
 
 
 
 
2 years 9 months 15 days 
 
 
 
 
 
 
Stockholders' Equity (Details 3) (2014 Employee Stock Purchase Plan, USD $)
In Thousands, except Share data, unless otherwise specified
0 Months Ended 1 Months Ended 3 Months Ended 9 Months Ended
Jan. 1, 2015
Oct. 31, 2014
Sep. 30, 2015
Sep. 30, 2015
Stockholders' Equity
 
 
 
 
Purchase period of offering
 
6 months 
 
 
Rate of purchase price of stock on fair value (as a percent)
 
85.00% 
 
 
Number of shares available for future issuance
 
255,500 
 
 
Additional common stock reserved for issuance (in shares)
149,129 
 
 
 
Stock-based compensation expense
 
 
$ 121 
$ 314 
Maximum
 
 
 
 
Stockholders' Equity
 
 
 
 
Discount rate on the value of shares through payroll deductions (as a percent)
 
15.00% 
 
 
Expiration period of each offering
 
27 months 
 
 
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 9 Months Ended 3 Months Ended 9 Months Ended 0 Months Ended
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2015
Sep. 30, 2014
Sep. 30, 2014
Mentor litigation
Sep. 30, 2014
Mentor litigation
Nov. 5, 2015
Sientra
lawsuit
Oct. 28, 2015
Sientra
lawsuit
Operating Leases
 
 
 
 
 
 
 
 
Rent expense
$ 129 
$ 152 
$ 393 
$ 332 
 
 
 
 
Contingencies
 
 
 
 
 
 
 
 
Contingent liabilities
 
 
 
 
 
 
Number of lawsuits filed
 
 
 
 
 
 
Settlement payments received
 
 
 
 
$ 0 
$ 2,358 
 
 
Subsequent Events (Details) (USD $)
0 Months Ended